Publication Date: May 15, 2009
Subject: Campus-Based Waivers and Reallocation Based on a Major 2008 Natural Disaster
Summary: This letter describes new statutory waivers of some campus-based program requirements and a revised process for the reallocation of unspent campus-based funds for institutions located in certain areas affected by a major 2008 natural disaster.
Section 10702 of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 (P.L. 110-329) provides the Secretary with specific waiver and reallocation authority for the Federal Supplemental Educational Opportunity Grant (FSEOG) Program and the Federal Work-Study (FWS) Program. This authority applies only to institutions located in a county (or parish or municipality) that was designated by the Federal Emergency Management Agency (FEMA) for "disaster assistance for individuals and households" as a result of a major 2008 natural disaster (e.g., hurricane, flood) declared by the President. This letter will refer to such institutions as "qualifying institutions." Detailed information on determining if an institution is a qualifying institution appears below under the heading "Identifying Qualifying Institutions."
What follows is specific information on the waiver and reallocation provisions of P.L. 110-329 and information on how a qualifying institution can apply for a waiver and/or reallocated funds.
Waiver of the FSEOG and/or FWS Institutional Matching Requirement
Under the FSEOG and FWS programs, an institution must normally provide an institutional-share. However, under the Secretary's new authority, a qualifying institution may request and receive a waiver of the FSEOG and/or FWS institutional-share requirements for the 2009-2010 Award Year. This new waiver provision is in addition to the existing waivers available to institutions designated as "Title III/V eligible" under the regulations at 34 CFR 675.26(d) and 34 CFR 676.21(b).
Reallocation of Unused Funds and Waiver of the Underuse of Funds Penalty
Reallocation of Unused Funds - Normally unused campus-based funds from one award year are reallocated to institutions for use in the next award year under a set of statutorily required procedures. However, under P.L. 110-329, any FSEOG and FWS funds released by institutions from the 2008-2009 Award Year will be reallocated for the 2009-2010 Award Year to only qualifying institutions.
Underuse of Funds Penalty - When an institution returns more than 10 percent of its FSEOG or FWS allocation for an award year, the institution's allocation for that program for the second succeeding award year is normally reduced by the dollar amount of the funds returned. However, under the Secretary's new authority, a qualifying institution that receives reallocated funds under the reallocation process discussed above for the 2009-2010 Award Year will automatically receive a waiver of the "underuse of funds penalty." Thus, there would be no reduction in that institution's allocation for the 2011-2012 Award Year.
It is important to note that an institution not receiving reallocated funds under the reallocation process discussed above may still request a waiver of the "underuse of funds penalty" for returning more than 10 percent of its 2009-2010 FSEOG or FWS allocation by using the normal Fiscal Operations Report and Application to Participate (FISAP) waiver procedures and satisfying the conditions in the regulations at 34 CFR 673.4(d)(3).
Identifying Qualifying Institutions
During the 2008 calendar year, the President declared 75 major disasters under the Robert T. Stafford Disaster Relief and Emergency Act (42 U.S.C. 5170). However, only 35 of those 75 major disasters resulted in counties being designated for "Individual Assistance" by FEMA. These designations were in the Commonwealth of Puerto Rico and the following 20 states: Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Mississippi, Missouri, Nebraska, Nevada, Oklahoma, Tennessee, Texas, West Virginia, and Wisconsin.
Institutions located in, or that have an additional location located in, one of the listed 20 states or the Commonwealth of Puerto Rico should review the attachment to this letter to find the counties that were designated as eligible for "Individual Assistance" by FEMA and determine whether the institution is located in a listed county. If the institution qualifies by being located in one of the listed counties that was designated by FEMA for "Individual Assistance," it is considered a qualifying institution. A qualifying institution may request a waiver of the institutional-share requirement for the 2009-2010 Award Year and request reallocated funds as described above for the 2009-2010 Award Year by notifying the Department that it is a qualifying institution under P.L. 110-329.
Notification to the Department
Notification to the Department that an institution is requesting either a waiver of the institutional-share requirement for the FSEOG and/or FWS programs or for reallocated FSEOG and/or FWS funds must be provided through a letter on institutional letterhead signed by the Financial Aid Administrator. The letter must clearly indicate the name and OPEID number of the institution, the state and county where the institution (or one of its additional locations) is located, and the FEMA assigned number for the major disaster as it appears on the attachment to this letter.
The letter must specifically indicate if the institution is requesting a waiver of the institutional-share requirement for the FSEOG Program, the FWS Program, or both, for the 2009-2010 Award Year. In addition, if the institution wants to be considered for reallocated FSEOG and/or FWS funds for the 2009-2010 Award Year, it must request a specific amount of additional funds that it will spend in each program during that Award Year. Any such reallocated funds would be in addition to the institution's regular allocations for the 2009-2010 Award Year as determined by the statutory formulas. As indicated earlier, any qualifying institution that receives reallocated funds for the 2009-2010 Award Year will automatically receive a waiver of the "underuse of funds penalty" for the 2011-2012 Award Year, if needed.
The signed letter with the information covered on the previous page must be provided as a PDF attachment to an e-mail that is submitted to the Department no later than June 15, 2009, at the following e-mail address: CBFOB@ed.gov.
For additional information about the FSEOG and/or FWS program waivers or reallocation of funds for the 2009-2010 Award Year under P.L. 110-329, please contact the Campus-Based Call Center at (877) 801-7168. Customer service representatives are available Monday through Friday from 8:00 A.M. until 8:00 P.M. (ET). You may also e-mail CBFOB@ed.gov.
Daniel T. Madzelan
Delegated the Authority to Perform
the Functions and Duties of the
Assistant Secretary for
Attachment: Counties Designated by FEMA for Individual Assistance After a 2008 Major Disaster