Introduction
This volume provides guidance on how to request, disburse, manage, and report on the use of federal student aid funds.
Here we provide a summary of changes and clarifications. However, the introduction does not provide complete guidance on these changes. For that, refer to the text in the chapters cited, the Code of Federal Regulations (CFR), and the Higher Education Act (HEA).
We appreciate any comments that you have on this volume as well as all the volumes of the FSA Handbook. We revise the text based on questions and feedback from the financial aid community, so please write us at fsaschoolspubs@ed.gov about how to improve the Handbook so that it is always clear and informative.
COVID-19 Guidance and Waivers
The Department of Education recognizes that the ongoing COVID-19 pandemic has created many unique challenges for postsecondary institutions. The Department has provided a variety of special guidance and regulatory flexibilities due to the President’s declaration of the COVID-19 national emergency on March 13, 2020. In addition, Congress has passed legislation offering relief from certain statutory requirements related to the Title IV, HEA programs.
For COVID-19 related guidance, including waivers and exemptions to Title IV rules, please see the following webpages:
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The Department of Education’s COVID-19 Information and Resources for Schools and School Personnel: https://www.ed.gov/coronavirus/program-information
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Office of Postsecondary Education COVID-19 Title IV FAQ: https://www2.ed.gov/about/offices/list/ope/covid19faq.html
We outlined in our April 3, 2020 electronic announcement (EA) that institutions must comply with the cash management regulations (34 CFR Part 668, Subpart K) unless unable to do so due to COVID-19 disruptions. Where an institution is unable to comply, it should document the reason(s) for instances where it is unable to comply and retain the documentation in its records. These include, but are not limited to, the following regulatory requirements:
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Borrower Requests for Loan Cancellation (34 CFR 668.165(a)(4)(ii))
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Excess Cash (34 CFR 668.166)
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Notices/Authorizations (34 CFR 668.165(a)(3) and 34 CFR 668.165(b)(4)(iii))
In addition, under our December 11, 2020 Federal Register notice, the Secretary waived the requirement that an electronic funds transfer (EFT) be a direct deposit transaction allowing institutions and third-party servicers to use any type of EFT under the Treasury Department regulations in 31 CFR 208.2, including person-to-person payment methods such as Zelle and PayPal. Any alternative payment methods used must be disclosed in the institution’s annual compliance audit. The Secretary also temporarily modified the cash management requirements to allow institutions under Heightened Cash Management 1 (HCM1) the ability to submit a request for funds without first paying the credit balances due to the students for whom those funds were requested. Institutions must pay the credit balances no later than three calendar days after receiving the funds.
As outlined in the 12/11/2020 notice, these waivers expire at the end of the payment period that begins after the date on which the Federally-declared national emergency related to COVID–19 is rescinded.
Updates for 2023–2024
In Chapter 1, we provided general information related to the upcoming G5 to G6 upgrade.
In Chapter 2, we removed the COA information under the heading “Using Title IV funds to pay overtime charges is prohibited” to Volume 3, Chapter 2.
In Chapter 3, we removed various items and placed them in the appropriate program specific volumes. Please see below for details:
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Under the heading “Pell Grant overpayments – COD, NSLDS, and G5,” we moved the information on transfer monitoring of students in NSLDS (transfer student monitoring process) to Volume 1
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Under the heading “Pell Grant overpayments – COD, NSLDS, and G5,” we moved “Prohibition on receiving funds for enrollment at more than one school and Potential Overawards (POP)” moved to Volume 7
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Under the heading the heading “Pell Grant overpayments – COD, NSLDS, and G5,” we moved the information on calculating remaining Pell Grant eligibility to Volume 7
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Direct Loan enrollment status changes in NSLDS moved to Volume 2
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“Campus-Based Programs,” “Federal-Work Study Program,” and “FSEOG Overpayments” moved to Volume 6
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“Pell Grants” and “Iraq and Afghanistan Service Grants” moved to Volume 7
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The information on recalculating Pell eligibility when a student’s enrollment status changes before beginning attendance in all classes moved to Volume 7
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All of the information under the heading “Concurrent Enrollment and Pell Potential Overaward” moved to Volume 7
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The information on Pell or Iraq and Afghanistan Service Grant eligibility and disbursement adjustments moved to Volume 7
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“Direct Loans,” “Replacing Subsidized and Unsubsidized loans,” and “Disbursing Direct Loan funds when a student begins attendance on a less than half-time basis” moved to Volume 8
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The majority of information under the heading “Overpayments created by inadvertent overborrowing and repayments” moved to Volume 8
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“Teacher Education Assistance for College and Higher Education Grants” moved to Volume 9
In Chapter 6, the examples and analyses of SAS Cash Summary, SAS Cash Detail, and SAS Loan Detail were removed. As stated in Volume 4, Chapter 6, please see the COD Technical Reference for examples and analyses of each of these reports.
In Chapter 6, we updated references to DL Tools. EDExpress is integrating all functionality from DL Tools into the EDExpress software.