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FAQ: Federal Student Aid Implications

Q.  Please describe the institutional flexibility under the campus-based student aid
A. The CARES Act waives institutional financial matching requirements for the Supplemental Educational Opportunity Grant (SEOG) program. It also allows the transfer of unexpended funds within institutional accounts from Federal Work-Study (FWS) to SEOG in order to facilitate the flow of emergency grants to students.

The CARES Act allows for the broad use of SEOG as a student emergency grant program by waiving the existing student need requirements, and increases the maximum allowable grant from $4,000 to the maximum Pell Grant of $6,195. Student emergency grants disbursed via the SEOG structure also will not be treated as financial aid for purposes of student need analysis.

Institutions may continue to disburse FWS funds to students even if the student is unable to work. However, the student must have already been working in the FWS program and institutions cannot award FWS money to students who were not otherwise eligible for FWS. The institutional matching requirement is not waived for FWS unless otherwise waived by the Secretary of Education.
Q.  Who qualifies for the suspension of student loan payments under the CARES Act?
A. Borrowers with Federal Direct Loans (i.e. subsidized Stafford Loans, unsubsidized Stafford Loans, PLUS Loans, Graduate PLUS Loans, Parent PLUS Loans) and borrowers with FFEL Loans that are held by the U.S. Department of Education will have those loans paused through September 30, 2020.

No interest will accrue on any loans during the six month pause in payments.

For the purposes of the federal loan forgiveness programs, any missed monthly payment during the pause will be counted as if the borrower made a qualifying payment.

The Education Department has not yet notified us of how this year’s college graduates or current students will be treated.
Q.  Who does not qualify for the suspension of student loan payments under the
     CARES Act?
A. Payments on private educational loans will not be paused by the federal government and borrowers holding private loans will be required to be continue their normal loan repayment schedule.

Higher education institutions which hold Perkins Loans are authorized by the Education Department to provide the same zero interest and cessation of payments benefits as provided to borrowers under the Direct Loan Program to the loans they hold on a voluntary basis through September 30, 2020. A similar voluntary offer is extended to FFEL Program lenders. Institutions are also authorized to offer forbearance for a period not to exceed three months, to a Federal Perkins Loan borrower who is in repayment and who is unable to make payments due to a COVID-19 related interruption.
Q.  If institutions waive various expenses for students as a result of the pandemic, do the
     institutions have to recalculate these students’ cost of attendance?
A. If, as a result of the COVID-19 outbreak, an institution provides a refund or waiver of expenses for all or part of a student’s tuition, fees, room and board charges, or other institutional charges, or if an institution becomes aware that a student has moved off campus for the remainder of the term, the Education Department will not require a re-evaluation of the student’s cost of attendance. Therefore, the institution is not required to make changes to a student’s Title IV awards on the basis of such changes.

 Print the FAQs:  CARES Act Frequently Asked Questions