Eligibility of Students at Institutions of Higher Education for Funds Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, 36494-36504 [2020-12965]
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Federal Register / Vol. 85, No. 117 / Wednesday, June 17, 2020 / Rules and Regulations
C. Collection of Information
This rule will not call for a new
collection of information under the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520).
D. Federalism and Indian Tribal
Governments
A rule has implications for federalism
under Executive Order 13132,
Federalism, if it has a substantial direct
effect on the States, on the relationship
between the National Government and
the States, or on the distribution of
power and responsibilities among the
various levels of government. We have
analyzed this rule under that Order and
have determined that it is consistent
with the fundamental federalism
principles and preemption requirements
described in Executive Order 13132.
Also, this rule does not have tribal
implications under Executive Order
13175, Consultation and Coordination
with Indian Tribal Governments,
because it does not have a substantial
direct effect on one or more Indian
tribes, on the relationship between the
Federal Government and Indian tribes,
or on the distribution of power and
responsibilities between the Federal
Government and Indian tribes.
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E. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995 (2 U.S.C. 1531–1538) requires
Federal agencies to assess the effects of
their discretionary regulatory actions. In
particular, the Act addresses actions
that may result in the expenditure by a
State, local, or tribal government, in the
aggregate, or by the private sector of
$100,000,000 (adjusted for inflation) or
more in any one year. Though this rule
will not result in such an expenditure,
we do discuss the effects of this rule
elsewhere in this preamble.
F. Environment
We have analyzed this rule under
Department of Homeland Security
Directive 023–01, Rev. 1, associated
implementing instructions, and
Environmental Planning COMDTINST
5090.1 (series), which guide the Coast
Guard in complying with the National
Environmental Policy Act of 1969 (42
U.S.C. 4321–4370f), and have
determined that this action is one of a
category of actions that do not
individually or cumulatively have a
significant effect on the human
environment. This rule involves a safety
zone lasting only three hours that will
prohibit entry within certain navigable
waters of San Diego Bay in the vicinity
of the General Dynamics NASSCO
shipyard. It is categorically excluded
from further review under paragraph
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L60(a) of Appendix A, Table 1 of DHS
Instruction Manual 023–01–001–01,
Rev. 1. A Record of Environmental
Consideration supporting this
determination is available in the docket.
For instructions on locating the docket,
see the ADDRESSES section of this
preamble.
G. Protest Activities
The Coast Guard respects the First
Amendment rights of protesters.
Protesters are asked to call or email the
person listed in the FOR FURTHER
INFORMATION CONTACT section to
coordinate protest activities so that your
message can be received without
jeopardizing the safety or security of
people, places or vessels.
List of Subjects in 33 CFR Part 165
Harbors, Marine safety, Navigation
(water), Reporting and recordkeeping
requirements, Security measures,
Waterways.
For the reasons discussed in the
preamble, the Coast Guard amends 33
CFR part 165 as follows:
PART 165—REGULATED NAVIGATION
AREAS AND LIMITED ACCESS AREAS
1. The authority citation for part 165
continues to read as follows:
■
Authority: 46 U.S.C. 70034, 70051; 33 CFR
1.05–1, 6.04–1, 6.04–6, and 160.5;
Department of Homeland Security Delegation
No. 0170.1.
2. Add § 165.T11–024 to read as
follows:
■
§ 165.T11–024 Safety Zone; San Diego
Bay, San Diego, CA.
(a) Location. The following area is a
safety zone. All waters of San Diego
Bay, from surface to bottom,
encompassed by a line connecting the
following points beginning at
32°41′23.4″ N, 117°8′39.6″ W (Point A);
thence running northwesterly to
32°41′14.4″ N, 117°9′3″ W (Point B);
thence running southeasterly to 32°41′3″
N, 117°8′43.8″ W (Point C); thence
running east to 32°41′12″ N, 117°8′20.4″
W (NAD 83) (Point D); thence running
north to the beginning point.
(b) Definitions. As used in this
section, designated representative
means a Coast Guard Patrol
Commander, including a Coast Guard
coxswain, petty officer, or other officer
operating a Coast Guard vessel and a
Federal, State, and local officer
designated by or assisting the Captain of
the Port San Diego (COTP) in the
enforcement of the safety zone.
(c) Regulations. (1) Under the general
safety zone regulations in subpart C of
this part, you may not enter the safety
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zone described in paragraph (a) of this
section unless authorized by the COTP
or the COTP’s designated representative.
(2) To seek permission to enter,
contact the COTP or the COTP’s
representative by VHF Channel 16.
Those in the safety zone must comply
with all lawful orders or directions
given to them by the COTP or the
COTP’s designated representative.
(d) Enforcement period. This section
will be enforced from 6 p.m. through 9
p.m. on July 2, 2020.
Dated: May 29, 2020.
T. J. Barelli,
Captain, U.S. Coast Guard, Captain of the
Port Sector San Diego.
[FR Doc. 2020–12089 Filed 6–16–20; 8:45 am]
BILLING CODE 9110–04–P
DEPARTMENT OF EDUCATION
34 CFR Part 668
[Docket ID ED–2020–OPE–0078]
RIN 1840–ZA04
Eligibility of Students at Institutions of
Higher Education for Funds Under the
Coronavirus Aid, Relief, and Economic
Security (CARES) Act
Office of Postsecondary
Education, Department of Education.
ACTION: Interim final rule.
AGENCY:
The Department of Education
(Department) issues this interim final
rule so that institutions of higher
education may appropriately determine
which individuals attending their
institution are eligible to receive
emergency financial aid grants to
students under the Coronavirus Aid,
Relief, and Economic Security (CARES)
Act (March 27, 2020).
DATES: These regulations are effective
June 17, 2020. We must receive your
comments on or before July 17, 2020.
ADDRESSES: Submit your comments
through the Federal eRulemaking Portal
or via postal mail, commercial delivery,
or hand delivery. We will not accept
comments submitted by fax or by email
or those submitted after the comment
period. To ensure that we do not receive
duplicate copies, please submit your
comments only once. In addition, please
include the Docket ID at the top of your
comments.
If you are submitting comments
electronically, we strongly encourage
you to submit any comments or
attachments in Microsoft Word format.
If you must submit a comment in Adobe
Portable Document Format (PDF), we
strongly encourage you to convert the
SUMMARY:
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PDF to print-to-PDF format or to use
some other commonly used searchable
text format. Please do not submit the
PDF in a scanned format. Using a printto-PDF format allows the Department to
electronically search and copy certain
portions of your submissions.
• Federal eRulemaking Portal: Go to
www.regulations.gov to submit your
comments electronically. Information
on using regulations.gov, including
instructions for accessing agency
documents, submitting comments, and
viewing the docket, is available on the
site under ‘‘Help.’’
• Postal Mail, Commercial Delivery,
or Hand Delivery: The Department
strongly encourages commenters to
submit their comments electronically.
However, if you mail or deliver your
comments about the interim final rule,
address them to Gaby Watts, U.S.
Department of Education, 400 Maryland
Ave. SW, Room 258–02, Washington,
DC 20202.
Privacy Note: The Department’s
policy is to make comments received
from members of the public available for
public viewing on the Federal
eRulemaking Portal at
www.regulations.gov. Therefore,
commenters should include in their
comments only information that they
wish to make publicly available.
FOR FURTHER INFORMATION CONTACT: For
further information contact Gaby Watts,
U.S. Department of Education, 400
Maryland Ave. SW, Room 258–02,
Washington, DC 20202. Telephone:
202–453–7195. Email: Gaby.Watts@
ed.gov.
If you use a telecommunications
device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay
Service (FRS), toll-free, at (800) 877–
8339.
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SUPPLEMENTARY INFORMATION:
Invitation to Comment: Although the
Department has decided to issue this
final rule without first publishing a
proposed rule for public comment, we
are interested in whether you think we
should make any changes to this rule.
We invite your comments. We will
consider these comments in
determining whether to revise the rule.
We invite you to assist us in
complying with the specific
requirements of Executive Orders 12866
and 13563 and their overall requirement
of reducing regulatory burden that
might result from this final rule. Please
let us know of any further ways we
could reduce potential costs or increase
potential benefits while preserving the
effective and efficient administration of
the Department’s programs and
activities.
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During and after the comment period,
you may inspect all public comments
about this interim final rule by
accessing Regulations.gov. Due to the
current COVID–19 pandemic, the
Department’s buildings are currently not
open. However, upon reopening, you
may also inspect the comments in
person at 400 Maryland Ave. SW,
Washington, DC 20202, between 8:30
a.m. and 4:00 p.m., Eastern Time,
Monday through Friday of each week
except Federal holidays. To schedule a
time to inspect comments, please
contact the person listed under FOR
FURTHER INFORMATION CONTACT.
Assistance to Individuals with
Disabilities in Reviewing the
Rulemaking Record: On request, we will
provide an appropriate accommodation
or auxiliary aid to an individual with a
disability who needs assistance to
review the comments or other
documents in the public rulemaking
record for this interim final rule. To
schedule an appointment for this type of
accommodation or auxiliary aid, please
contact the person listed under FOR
FURTHER INFORMATION CONTACT.
Background:
On March 27, 2020, Congress enacted
the CARES Act, Public Law 116–136, to
help Americans cope with the economic
and health crises created by the novel
coronavirus disease (COVID–19)
outbreak. Section 18004 of the CARES
Act establishes the Higher Education
Emergency Relief Fund (HEERF) and
instructs the Secretary to allocate
funding to eligible institutions of higher
education in connection with the
COVID–19 outbreak. Section 18004(c)
specifically allows institutions to use
their HEERF allocation under
§ 18004(a)(1) for ‘‘any costs associated
with significant changes to the delivery
of instruction due to the coronavirus,’’
while adding the restriction that funds
cannot be used for ‘‘payment to
contractors for the provision of preenrollment recruitment activities;
endowments; or capital outlays
associated with facilities related to
athletics, sectarian instruction, or
religious worship.’’ Section 18004(c)
also states that institutions must use at
least 50 percent of their allocations ‘‘to
provide emergency financial aid grants
to students for expenses related to the
disruption of campus operations due to
coronavirus (including eligible expenses
under a student’s cost of attendance,
such as food, housing, course materials,
technology, health care, and child
care),’’ implicitly allowing institutions
to use more than 50 percent of their
funds for this purpose. Thus, the first
sentence of section 18004(c) generally
allows an institution to use its allocated
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HEERF funds under section 18004(a)(1)
to cover certain coronavirus-related
costs, while the second sentence
requires an institution to give at least
half of its allocated HEERF funds as
grants to students. Finally, section
18004(e) requires institutions to submit
reports to the Secretary describing how
the funds were used under the section
and authorizes the Secretary to specify
the time and manner of such reporting.
Although the second sentence of
section 18004(c) states that the
emergency financial aid grants are to be
given to students, the CARES Act does
not define the term ‘‘student’’ or the
phrases ‘‘grants to students’’ or
‘‘emergency financial aid grants to
students.’’ In addition to leaving these
terms undefined, Congress also
included an implicit reference to title IV
terms immediately after the phrase
‘‘emergency financial aid grants to
students,’’ 18004(c) (‘‘including eligible
expenses under a student’s cost of
attendance’’), and explicit references to
that same title IV standard following the
phrase ‘‘grants to students’’ in two of the
preceding subsections, 18004(a)(2) and
(a)(3) (‘‘the student’s cost of attendance
(as defined under section 472 of the
Higher Education Act’’). In determining
who constitutes a ‘‘student’’ for
purposes of ‘‘emergency financial aid
grants to students’’ in section 18004 of
the CARES Act, the Department is
mindful that ‘‘[s]tatutory construction
. . . is a holistic endeavor.’’ United Sav.
Ass’n of Texas v. Timbers of Inwood
Forest Assocs., Ltd., 484 U.S. 365, 371
(1988). In the appropriate
circumstances, the Department’s
construction of the CARES Act must be
informed or even controlled by other
relevant law. (‘‘We assume that
Congress is aware of existing law when
it passes legislation,’’ Hall v. United
States, 566 U.S. 506, 516 (2012) quoting
Miles v. Apex Marine Corp., 498 U.S.
19, 32 (1990).) In context the category of
‘‘student’’ recipients eligible for
‘‘emergency financial aid grants’’ is
therefore at a minimum ambiguous.
This is a critical ambiguity, requiring
the Department to exercise its narrow
interpretative authority under Chevron
U.S.A., Inc. v. Natural Res. Def. Council,
Inc., 467 U.S. 837, 843–44 (1984).
(‘‘ ‘The power of an administrative
agency to administer a congressionally
created . . . program necessarily
requires the formulation of policy and
the making of rules to fill any gap left,
implicitly or explicitly, by Congress.’
quoting Morton v. Ruiz, 415 U.S. 199,
231 (1974). . . . Sometimes the
legislative delegation to an agency on a
particular question is implicit rather
than explicit.’’) Here the Secretary
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exercises her authority under 20 U.S.C.
1221e–3 and 20 U.S.C. 3474. Relying on
statutory language and context to
develop a harmonious construction
faithful to the entire statutory scheme,
see Food and Drug Admin. v. Brown &
Williamson Tobacco Corp., 529 U.S.
120, 132–33 (2000) (‘‘In determining
whether Congress has specifically
addressed the question at issue, a
reviewing court should not confine
itself to examining a particular statutory
provision in isolation. The meaning—or
ambiguity—of certain words or phrases
may only become evident when placed
in context.’’), we have concluded that
Congress intended the category of those
eligible for ‘‘emergency financial aid
grants to students’’ in section 18004 of
the CARES Act to be limited to those
individuals eligible for title IV
assistance.
The Department considered a number
of factors in reaching this conclusion.
For one, an interpretation of the term
‘‘student’’ in ‘‘emergency financial aid
grants to students’’ that was broad
enough to cover anyone engaged in
learning, or anyone enrolled in any way
at an institution, or anyone enrolled
full-time at an institution in a program
leading to a recognized postsecondary
credential, would be significantly
curtailed at the outset by existing law
independent of title IV with regard to
certain immigration statuses. 8 U.S.C.
1611(a) already prohibits certain
individuals from receiving any ‘‘Federal
public benefit’’ and applies
‘‘[n]otwithstanding any other provision
of law.’’ This prohibition clearly applies
to the HEERF funds. Section 1611(c)
defines ‘‘Federal public benefit’’ to
include (A) ‘‘any grant . . . provided by
an agency of the United States or by
appropriated funds of the United
States,’’ as well as (B) ‘‘any . . .
postsecondary education . . . benefit
. . . for which payments or assistance
are provided to an individual . . . by an
agency of the United States or by
appropriated funds of the United
States.’’ 1 To the extent an institution
uses HEERF funds, which qualify as
‘‘appropriated funds of the United
States,’’ to provide ‘‘emergency financial
aid grants to students,’’ the grants would
qualify as a Federal public benefit under
both Section 1611(c)(1)(A) and (B)
because they would be ‘‘grant[s] . . . by
appropriated funds,’’ as well as
‘‘postsecondary education’’ benefits to
individuals. To the extent an institution
1 Because title IV also contains an eligibility
requirement based on immigration status which is
similar in most respects to the requirement in 8
U.S.C. 1611, there is little remaining application for
the prohibition in 8 U.S.C. 1611 once title IV
eligibility requirements have been applied.
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otherwise uses the funds to make
payments to students for purposes of,
for example, ‘‘costs associated with
significant changes to the delivery of
instruction due to the coronavirus,’’
these payments would also qualify as
‘‘postsecondary education’’ benefits to
individuals. The Department has not
identified any specific language in
Section 18004, or elsewhere in the
CARES Act, that suggests Congress
intended to include aliens who are not
‘‘qualified’’ for purposes of Section 1611
among the recipients of HEERF funds,
notwithstanding the preexisting general
prohibition in Section 1611.
On the other extreme, the Department
concludes that a more narrow
interpretation of the term ‘‘student’’ in
the phrase ‘‘emergency financial aid
grants to students’’—for example, to
cover only the group that received
Federal Pell Grants as referenced in
section 18004(a)(1)(A)—would be overly
restrictive and less supportable under
the language of the CARES Act.
Earlier in the CARES Act, in section
3504 entitled ‘‘Use of Supplemental
Educational Opportunity Grants for
Emergency Aid,’’ Congress expressly
authorizes institutions to use money
allocated to them under the Federal
Supplemental Educational Opportunity
Grant (FSEOG) program, 20 U.S.C.
1070b et seq., for ‘‘emergency financial
aid grants to students,’’ which is the
identical phrase Congress used in
section 18004. Although Congress did
not expressly state that these emergency
financial aid grants to students must be
limited to those students who are
eligible for participation in programs
under title IV of the HEA, the context
indicates that Congress intended that
restriction as a general rule. Not only
was the previously planned use of the
funds conditioned upon title IV
eligibility (since the FSEOG program is
part of title IV of the HEA) but also
because the text of the CARES Act
allows institutions to ‘‘waive the
amount of need calculation under
section 471’’ of the HEA, which is a
calculation that applies to title IV aid.
Because ‘‘identical words and phrases
within the same statute should normally
be given the same meaning,’’ Powerex
Corp. v. Reliant Energy Services, Inc.,
551 U.S. 224, 232 (2007), the implicit
title IV eligibility requirement
associated with ‘‘emergency financial
aid grants to students’’ in section 3504
should apply to the distribution of
‘‘emergency financial aid grants to
students’’ in section 18004. Congress
did not previously choose to provide
emergency financial aid grants through
the HEA, and thus these grants, by
definition, do not constitute Federal
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financial student aid under the HEA,
including title IV of the HEA. However,
even though it is true that all title IV aid
is subject to title IV eligibility
requirements, it does not follow that all
non-title IV aid is exempt from title IV
eligibility requirements. Rather, nontitle IV aid can be subject to title IV
eligibility requirements. For example,
scholarships distributed under the Fund
for the Improvement of Postsecondary
Education, a non-title IV program,
require that recipients meet certain title
IV eligibility requirements, as noted
below. 20 U.S.C. 1138(d).
In providing emergency financial aid
grants through section 18004 of the
CARES Act, Congress also used the
framework under title IV of the HEA for
the distribution of these emergency
financial aid grants to students,
implying that the Department and
institutions adhere to the requirements
under title IV, such as using the
definition of ‘‘cost of attendance’’ under
title IV of the HEA and the same
systems for distributing Federal
financial student aid to institutions
under title IV of the HEA.
Indeed, Congress specifically
references title IV of the HEA in various
provisions in section 18004 of the
CARES Act, including the following
provisions:
• Section 18004(a)(1) links a
component of the institutional
allocation for HEERF to enrollment of
Pell Grant recipients, and a student
must be eligible for Federal financial
student aid under section 484 of title IV
of the HEA to receive Pell Grants. 20
U.S.C. 1070a(a) (stating Pell Grants are
only for an ‘‘eligible student (defined in
accordance with [S]ection 484 [of the
HEA])’’); 20 U.S.C. 1091.
• Sections 18004(a)(2) and (3) require
institutions to use funds ‘‘for grants to
students for any component of the
student’s cost of attendance (as defined
under § 472 of [title IV of] the Higher
Education Act), including food,
housing, course materials, technology,
healthcare, and child care.’’ (Emphasis
added.)
• Section 18004(a)(3) specifically
references ‘‘part B of title VII of the
HEA,’’ and section 741(d)(1) of part B of
title VII of the HEA expressly requires
students to be eligible under section
484(a) of the HEA to receive grants or
scholarships. 20 U.S.C. 1138(d).
• Section 18004(b) expressly requires
the Secretary to use the same systems
that are used to distribute funding to
each institution under title IV of the
HEA in order to distribute funds to each
institution under section 18004(a)(1) of
the CARES Act.
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• Section 18004(c) again expressly
refers to ‘‘a student’s cost of
attendance,’’ which is a defined term in
section 472 of the HEA. 20 U.S.C.
1087ll.
The most congruent definition of
‘‘student’’ for purposes of ‘‘emergency
financial aid grants to students’’ in
section 18004 is a person who is or
would be eligible under section 484 of
the HEA for title IV aid. Indeed, it
would be an illogical result for Congress
to require students to be eligible under
section 484 of title IV of the HEA for
grants under section 18004(a)(3) of the
CARES Act, which expressly references
part B of title VII of the HEA, but not
for grants under sections 18004(a)(1)
and (2) of the CARES Act, especially
when Congress in section 18004(d)
directs the Secretary to prioritize funds
under section 18004(a)(3) for
institutions that did not receive
sufficient funding under section
18004(a)(1) and (2). ‘‘Interpretations of
statute which would produce absurd
results are to be avoided.’’ Griffin v.
Ocean Contractors, Inc., 458 U.S. 564,
576 (1982). To interpret section 18004
in a holistic manner, it appears that the
best interpretation of ‘‘student’’ where
section 18004 references ‘‘emergency
financial aid grants to students’’ is to
mean a person who is eligible under
section 484 of the HEA to receive title
IV aid.2
2 To calculate the HEERF allocation under section
18004(a)(1)(B), the Department ‘‘approximated the
factors using the best available data’’ by multiplying
the 2017/2018 full-time enrollment number by the
fall 2018 percentage of undergraduate, graduate,
and professional students not enrolled exclusively
in distance education, as self-reported by
institutions and compiled in the Department’s
Integrated Postsecondary Education Data System
(IPEDS). See Methodology for Calculating
Allocations per Section 18004(a)(1) of the CARES
Act, https://www2.ed.gov/about/offices/list/ope/
heerf90percentformulaallocationexplanation.pdf.
Thus, the approach taken in calculating the ‘‘fulltime equivalent enrollment of students’’ in section
18004(a)(1)(B) differs from the approach taken in
this rule in interpreting and applying ‘‘grants to
students’’ elsewhere in section 18004. The
Department intends to interpret the term ‘‘student’’
in the same way throughout section 18004, but did
not have data available on the number of
individuals enrolled at each institution who are or
could be eligible for title IV aid, so the Department
had to use a different measure based on available
data. As between the available options, the
Department believed that using a broader number
for part of the baseline in establishing each
institution’s share under 18004(a)(1) made sense
because funds used toward the first allowed
purpose in 18004(c) (to cover any costs associated
with significant changes to the delivery of
instruction due to the coronavirus) apply to the
entire institution regardless of the definition of
‘‘student.’’ The Department also deemed it more
important to move expeditiously to calculate the
HEERF allocation despite the acknowledged
‘‘limitations of th[e] data,’’ rather than stopping the
HEERF process in order to gather additional data
solely for purposes of calculating the HEERF
allocation.
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Final Rule:
For purposes of the phrases ‘‘grants to
students’’ and ‘‘emergency financial aid
grants to students’’ in sections
18004(a)(2), (a)(3), and (c) of the CARES
Act, ‘‘student’’ is defined as an
individual who is, or could be, eligible
under section 484 of the HEA, to
participate in programs under title IV of
the HEA. We add this definition to 34
CFR 668.2.
An important policy goal for the
Department is to make emergency
financial aid grants available to students
in the most efficient, effective, and
expedient way possible and consistent
with Congressional intent. At the same
time, the Department has an obligation
to taxpayers to prevent waste, fraud, and
abuse. The potential for waste, fraud,
and abuse is significant when
institutions of higher education are
given the opportunity to quickly make
cash awards to students, particularly
when institutions are rightfully
concerned about declining enrollments
and the loss of ancillary revenue as a
result of COVID–19. In addition, there
have been reports that the unusual
circumstances caused by COVID–19
have given rise to new efforts to defraud
government programs in other
contexts.3
The Department has considered these
issues in reaching its interpretation of
the category of those eligible for
‘‘emergency financial aid grants to
students’’ in section 18004(a)(2), (a)(3),
and (c). The Department has concluded
that the best approach to interpreting
‘‘student’’ in ‘‘emergency financial aid
grants to students’’ is to mean a person
who is eligible under section 484 of the
HEA to receive title IV aid, as suggested
by the references to title IV elsewhere in
section 18004. This approach uses a
clear, existing standard that is familiar
to the Department and to institutions
and will allow both the Department and
institutions to implement the HEERF
provisions in an efficient, effective, and
expedient way. The Department has
placed a high priority on getting
assistance to institutions and
individuals as quickly and efficiently as
possible in light of the national
emergency and the immediate needs
resulting therefrom, and the use of an
existing standard here achieves that
same important goal. The title IV
eligibility standard has already been
specified in great detail by the
Department in its practice and its
communications with institutions with
3 See, e.g., Mike Baker, Feds Suspect Vast Fraud
Network Is Targeting U.S. Unemployment Systems,
New York Times, www.nytimes.com/2020/05/16/
us/coronavirus-unemployment-fraud-secret-servicewashington.html (last visited May 19, 2020).
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regard to title IV programs over the
years. In contrast, using a generic, broad
standard would require the Department
and institutions to wade through a
litany of specific questions about which
groups of potential students do or do
not qualify for ‘‘grants to students.’’ 4
For the majority of students, active
participation in title IV programs will
clearly demonstrate to the institution
and the Department that they are
qualified as a student to receive
emergency financial aid grants. For
example, with regard to the title IV
eligibility requirement related to
citizenship or appropriate immigration
status in the United States, the majority
of students’ statuses can be verified by
the fact of their participation in title IV.5
And this verification also ensures that
the disbursement of grants to those
individuals occurs in compliance with
the independent statutory restriction
found in 8 U.S.C. 1611.
The Department also acknowledges
the efficiency of leveraging existing
processes and procedures to minimize
burden on institutions implementing
this IFR. For example, institutions could
encourage students who currently do
not receive title IV aid to submit the
Free Application for Federal Student
Aid (FAFSA) in order to determine title
IV eligibility.
In addition, this approach to
interpreting ‘‘student’’ within the phrase
‘‘emergency financial aid grants to
students’’ also allows the Department to
prevent potential waste, fraud, and
abuse. For example, without the title IV
eligibility standard, the existence of
HEERF funding could incentivize
individuals who are not qualified and
cannot qualify under the title IV
4 For example, there would need to be
consideration and a determination made regarding
whether to include or exclude individuals based on
whether they are enrolled for credit, enrolled in an
off-campus program, simultaneously finishing a
high school degree, taking remedial courses, taking
only zero-credit thesis courses, enrolled exclusively
in courses not applied towards a recognized
credential, enrolled only in English as a Second
Language programs or Continuing Education Units,
auditing classes only, participating residents or
interns in a medical doctor practice program after
receiving their degree, studying abroad at a foreign
university, enrolled in a branch campus in a foreign
country, or participating in Experimental Sites.
5 For the rest of students, qualification can be
confirmed by the method described in the May 1,
2015 Dear Colleague Letter, entitled ‘‘Citizenship
and Immigration Status Documentation’’ (DCL ID:
GEN–15–08), the Federal Student Aid Handbook
(https://ifap.ed.gov/sites/default/files/attachments/
2019-08/1920FSAHbkVol1Ch2.pdf), or by
employing the electronic document submission
flexibilities provided in the Department’s April 3,
2020, ‘‘UPDATED Guidance for Interruptions of
Study Related to COVID–19’’ (https://ifap.ed.gov/
sites/default/files/attachments/2020-04/040320
UPDATEDGuidanceInterruptStudyRelCOVID19
Attach.pdf).
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standard to enroll as students, and it
could incentivize institutions to take
advantage of this dynamic to further
their bottom lines. If a broad definition
of ‘‘student’’ were employed for
purposes of emergency financial aid
grants to students, unscrupulous
institutions could create cheap classes
and programming that provides little or
no educational value and then use the
HEERF grant funding to incentivize
individuals not qualified under title IV
to enroll as paying students in those
classes and programs, thereby qualifying
for a grant. Alternatively, institutions
could use the HEERF grant funding to
incentivize the re-enrollment of
students cannot maintain Satisfactory
Academic Progress (SAP) due to reasons
beyond the qualifying emergency, solely
for the purpose of increasing revenues
via the tuition such students would pay.
Without restriction, institutions could
also use HEERF funds for students who
are enrolled at the institution but do not
intend to receive a degree or certificate,
thereby diverting funds from students
who are pursuing a degree or certificate
in an eligible program.
Instead, interpreting ‘‘student’’ to
track title IV eligibility for purposes of
emergency financial aid grants to
students will ensure that institutions are
only providing funds to students who
are enrolled in an eligible program at an
institution and are maintaining SAP in
their program, among other
requirements. Each of these
requirements exists because it focuses
the use of Federal resources on valuable
educational activities and excludes
areas that are more open to waste, fraud,
and abuse. This approach will thereby
allow the Department to reduce the
likelihood and amount of waste, fraud,
and abuse in the administration of the
HEERF allocations under the CARES
Act.
Waiver of Notice and Comment
Rulemaking, Negotiated Rulemaking,
and Delayed Effective Date Under the
Administrative Procedure Act
The Department believes its interim
final rulemaking authority must be
narrowly construed and exercised only
when there is a sound basis for doing so.
However, Congress enacted the CARES
Act to help Americans cope with the
urgent economic and health crises
created by the COVID–19 outbreak and
created the HEERF to provide
emergency financial aid grants to
students. In light of the urgent economic
challenges facing many students as a
result of the crisis, the Department has
determined that there is good cause for
interim final rulemaking and that such
action is in the public interest. In the
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absence of this interim final rule, the
terms defined herein will remain
undefined and indefinite, and the
potential for waste, fraud, and abuse
described above will not have been
unaddressed in any legally binding
manner.6
Under the Administrative Procedure
Act (APA) (5 U.S.C. 553), the
Department generally offers interested
parties the opportunity to comment on
proposed rules. However, the APA
provides that an agency is not required
to conduct notice and comment
rulemaking when the agency, for good
cause, finds that notice and public
comment thereon are impracticable,
unnecessary, or contrary to the public
interest (5 U.S.C. 553(b)(B)). In light of
the current national emergency and the
importance of institutions properly
distributing the HEERF allocations via
emergency financial aid grants to
students to help with their expenses
related to the disruption of campus
operations due to COVID–19 as quickly
as possible, the normal rulemaking
process would be impracticable and
contrary to the public interest, so good
cause exists for waiving the notice and
comment requirements of the APA.
Although the Department has issued
guidance to this effect already, that
guidance is not legally binding, the
Department understands that certain
institutions have refrained from
distributing some or all of their HEERF
funds until a final rule is issued
clarifying this point in a legally binding
manner.
The Department is not required to
conduct negotiated rulemaking for this
rule. The requirement in HEA section
492 that requires the Department to
obtain public involvement in the
development of proposed regulations for
title IV of the HEA does not apply to
this final rule, because it implements
the CARES Act, not title IV. Moreover,
even if it did apply, section 492(b)(2) of
the HEA provides that negotiated
rulemaking may be waived for good
cause when doing so would be
‘‘impracticable, unnecessary, or contrary
to the public interest.’’ Section 492(b)(2)
of the HEA also requires the Secretary
to publish the basis for waiving
negotiations in the Federal Register at
the same time as the regulations in
question are first published. Even if
section 492 applied to this rule, good
cause would exist to waive the
negotiated rulemaking requirement,
since, as explained above, notice and
6 Nor will the Department enforce the title IV
eligibility interpretation announced in this rule
against distribution of HEERF funds that occurred
prior to the publication of this rule.
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comment rulemaking is not practicable
or in the public interest in this case.
The master calendar requirement in
section 482 of the HEA likewise does
not apply to this rule, because the rule
does not relate to the delivery of student
aid funds under title IV.
Additionally, the APA generally
requires that regulations be published at
least 30 days before their effective date,
except as otherwise provided by the
agency for good cause found and
published with the rule (5 U.S.C.
553(d)(3)). As described above, good
cause exists for this rule to be effective
upon publication in light of the current
national emergency and the importance
of institutions properly distributing the
HEERF allocations via emergency
financial aid grants to students to help
with their expenses related to the
disruption of campus operations due to
COVID–19. The CRA requires a major
rule may take effect no sooner than 60
calendar days after an agency submits a
CRA report to Congress or the rule is
published in the Federal Register,
whichever is later. 5 U.S.C. 801(a)(3)(A).
However, the CRA creates limited
exceptions to this requirement. See id.
§ 801(c); § 808. An agency may invoke
the ‘‘good cause’’ exception under
section 808(2) in the case of rules for
which the agency has found ‘‘good
cause’’ under the APA,
section 553(b)(B), to issue the rule
without providing the public with an
advance opportunity to comment. As
stated above the Department has found
good cause to issue this rule without
notice and comment rulemaking and
thus we are not including the 60-day
delayed effective date in this rule.
Executive Orders 12866, 13563, and
13771
Regulatory Impact Analysis
Under Executive Order 12866, it must
be determined whether this regulatory
action is ‘‘significant’’ and, therefore,
subject to the requirements of the
Executive order and subject to review by
the Office of Management and Budget
(OMB). Section 3(f) of Executive Order
12866 defines a ‘‘significant regulatory
action’’ as an action likely to result in
a rule that may—
(1) Have an annual effect on the
economy of $100 million or more, or
adversely affect a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
State, local, or Tribal governments or
communities in a material way (also
referred to as an ‘‘economically
significant’’ rule);
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(2) Create serious inconsistency or
otherwise interfere with an action taken
or planned by another agency;
(3) Materially alter the budgetary
impacts of entitlement grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or
(4) Raise novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
stated in the Executive order.
OMB has determined that this
regulatory action is a significant
regulatory action subject to review by
OMB under section 3(f) of Executive
Order 12866.
Under Executive Order 13771, for
each new regulation that the
Department proposes for notice and
comment or otherwise promulgates that
is a significant regulatory action under
Executive Order 12866 and that imposes
total costs greater than zero, it must
identify two deregulatory actions. For
FY 2020, any new incremental costs
associated with a new regulation must
be fully offset by the elimination of
existing costs through deregulatory
actions. This rule’s designation under
Executive Order 13771 will be informed
by public comment.
We have also reviewed these
regulations under Executive Order
13563, which supplements and
explicitly reaffirms the principles,
structures, and definitions governing
regulatory review established in
Executive Order 12866. To the extent
permitted by law, Executive Order
13563 requires that an agency—
(1) Propose or adopt regulations only
upon a reasoned determination that
their benefits justify their costs
(recognizing that some benefits and
costs are difficult to quantify);
(2) Tailor its regulations to impose the
least burden on society, consistent with
obtaining regulatory objectives and
taking into account—among other things
and to the extent practicable—the costs
of cumulative regulations;
(3) In choosing among alternative
regulatory approaches, select those
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety,
and other advantages; distributive
impacts; and equity);
(4) To the extent feasible, specify
performance objectives rather than the
behavior or manner of compliance a
regulated entity must adopt; and
(5) Identify and assess available
alternatives to direct regulation,
including economic incentives—such as
user fees or marketable permits—to
encourage the desired behavior, or
provide information that enables the
public to make choices.
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Executive Order 13563 also requires
an agency ‘‘to use the best available
techniques to quantify anticipated
present and future benefits and costs as
accurately as possible.’’ The Office of
Information and Regulatory Affairs of
OMB has emphasized that these
techniques may include ‘‘identifying
changing future compliance costs that
might result from technological
innovation or anticipated behavioral
changes.’’
We are issuing this interim final rule
only on a reasoned determination that
its benefits would justify its costs. In
choosing among alternative regulatory
approaches, we selected those
approaches that would maximize net
benefits. Based on the analysis that
follows, the Department believes that
these regulations are consistent with the
principles in Executive Order 13563.
We have also determined that this
regulatory action would not unduly
interfere with State, local, and Tribal
governments in the exercise of their
governmental functions.
Elsewhere in this section under
Paperwork Reduction Act of 1995, we
identify and explain burdens
specifically associated with the
information collection requirements.
Need for Regulatory Action
The Department is issuing this
interim final rule to clarify which
students are eligible for emergency
financial aid grants under section 18004
of the CARES Act. This final rule is
meant to balance flexibility and clarify
administration for institutions so the
funds can be provided to eligible
students as efficiently as possible with
eligibility requirements consistent with
congressional intent and designed to
prevent waste, fraud, and abuse. The
emergency financial aid grants are
meant to assist students with expenses
related to the disruption of on-campus
activities, so this final rule is meant to
clarify any questions about eligibility so
the funds can be disbursed in a timely
manner.
As detailed in the preamble of this
IFR, in light of the current national
emergency and the importance of
institutions distributing the HEERF
allocations via emergency financial aid
grants to students to help with their
expenses related to the disruption of
campus operations due to COVID–19,
the normal rulemaking process would
be impracticable and contrary to the
public interest. With the definition of
‘‘student’’ in ‘‘emergency financial aid
grants to students’’ uncertain,
institutions may be reluctant to award
the full allocation for grants to students
in time to assist with the COVID–19
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36499
related expenses the funds are intended
to alleviate.
Costs, Benefits, and Transfers
The emergency financial aid grants
under section 18004 of the CARES Act
are intended to assist eligible students
with expenses related to the disruption
of campus activities. In accordance with
OMB Circular A–4, we are evaluating
the costs and benefits of the IFR
compared to a pre-statutory baseline.
This IFR defines which students are
eligible for the grants but does not
change the amount available or the
allocation formula for providing the
funds to institutions. The amount of
transfers available to eligible students in
2020 is a minimum of $6.25 billion and
up to $12.5 billion, depending on the
amount institutions retain for
institutional expenses. We have not
discounted or annualized this amount
because it is meant to be disbursed to
students as efficiently as possible in the
current year.
As described in this preamble, the
eligibility requirements clarified in this
final rule allow students to know if they
are eligible to receive such funds from
their institution. Limiting eligibility to
title IV-eligible students who were
enrolled and making P SAP in oncampus programs during the time of
coronavirus-related disruptions to
campus operations should allow the
grants to be targeted for the purpose
they were established. By aligning
requirements with title-IV eligibility,7
those individuals who do not meet one
or more of the title IV eligibility
requirements will be unable to receive
HEERF grants.
As institutions will determine how
they will distribute funds to their
7 An exhaustive list of student eligibility
requirements can be found in Section 484 of the
Higher Education Act of 1965, as amended [20
U.S.C. 1091]. They are as follows (1) enroll or be
accepted for enrollment in a program leading to a
recognized credential at an eligible IHE and not
enrolled in elementary or secondary school (2) if
presently enrolled, be maintaining satisfactory
academic progress (3) not owe a refund on a Federal
student grant or be in default on any Federal
student loan (4) submit a Statement of Educational
Purpose (5) are a U.S. citizen, National or eligible
noncitizen (6) not have been convicted of, or plead
nolo contendere or guilty to, a crime involving
fraud in obtaining federal student aid (7) have a
high school diploma or its equivalent (8) have a
valid social security number (9) register with the
Selective Service (if required) (10) not been
convicted of any offense under any Federal or State
law involving the possession or sale of a controlled
substance for conduct that occurred during a period
of enrollment for which the student was receiving
Federal student aid. For more information visit:
https://uscode.house.gov/view.xhtml?req=
(title:20%20section:1091%20edition:prelim) and
here https://ifap.ed.gov/federal-student-aidhandbook/08-05-2019-2019-2020-federal-studentaid-handbook-student-eligibility.
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students, the Department does not know
the exact distribution of who will
receive the grants. Table 1 shows the
estimated pool of potential recipients as
derived from IPEDS data for institutions
that received an allocation. It is not
specific to Spring 2020 enrollment but
does provide an indication of the
number of students who could receive
funds. The primary eligibility
limitations reflected in the table are the
exclusion of non-resident aliens and the
use of the percent of students whose
programs were exclusively through
distance education to estimate eligible
on-campus enrollment.
TABLE 1—ESTIMATED POTENTIAL GRANT RECIPIENTS BY CONTROL OF INSTITUTION
Public
Total Enrollment 8 ....................................................................
Undergraduate ..................................................................
Graduate ...........................................................................
Non-Resident Alien ..................................................................
Percent All-Distance 9 ..............................................................
Estimated Potentially Eligible On-Campus Enrollment ...........
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It will be easier for students who have
successfully completed a FAFSA and
received a valid student aid report
(SAR) or institutional student
information record (ISIR) for the 2019–
20 or 2020–21 award years to receive an
emergency financial aid grant because
they have already demonstrated their
eligibility under title IV. While some
students may choose not to fill out a
FAFSA because they have other sources
of funding for their education, others
may lack the necessary information or
familiarity with the financial aid
process to have information in place
already. A number of studies have
examined the issue of barriers to FAFSA
completion including complexity and
lack of counseling. These barriers are
particularly challenging for low-income,
minority, and first-generation
students.10 Another limitation that will
restrict title IV eligible students’ access
to the emergency financial aid grants is
their program’s participation in title IV
aid. Some programs at title-IV eligible
institutions, primarily shorter training
courses such as first responder training
certificate programs, do not participate.
Students enrolled in such programs will
not be eligible for the emergency
financial aid grants. Students who
8 Analysis of IPEDS 2017–18 12-month
enrollment file, effy2018 available at https://
nces.ed.gov/ipeds/datacenter/DataFiles.aspx?
goToReportId=7.
9 National Center for Education Statistics, Digest
of Education Statistics 2019, Table 311.15. Number
and percentage of students enrolled in degreegranting postsecondary institutions, by distance
education participation, location of student, level of
enrollment, and control and level of institution: Fall
2017 and Fall 2018. Fall 2017 share of students
taking exclusively distance education courses.
Available at https://nces.ed.gov/programs/digest/
d19/tables/dt19_311.15.asp.
10 Owen, Laura and Westlund, Erik (2016)
‘‘Increasing College Opportunity: School
Counselors and FAFSA Completion,’’ Journal of
College Access: Vol. 2: Iss. 1, Article 3. Available
at: https://scholarworks.wmich.edu/jca/vol2/iss1/3.
Literature review discusses barriers and
interventions.
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18,527,813
16,872,158
1,655,655
692,123
11.40
15,802,421
Private
4,778,403
3,208,336
1,570,067
408,696
19.20
3,530,723
choose not to fill out a FAFSA but
otherwise meet the title IV eligibility
criteria may verify their eligibility by
completing an application designed by
the institution in which the student
attests under the penalty of perjury to
meeting the requirements of section 484
of the HEA.
In developing this IFR, the
Department considered waiving some
title IV eligibility requirements related
to drug offenses, fraud related to title IV
funds, or default. Ultimately, it was
determined that eliminating some
eligibility criteria and not others would
not be fair across groups of students and
would not allow institutions to
maximize the use of their existing
eligibility confirmation processes.
It is unclear how institutions will
interpret the language of the CARES Act
as they continue distributing emergency
financial aid grants to students in the
absence of the clarification contained in
this rule. Some institutions may choose
to continue to follow the guidance the
Department has already issued on this
subject, while others may adopt their
own broader definition of ‘‘student.’’ At
a minimum, the Department has already
brought to the attention of institutions
that the restrictions in 8 U.S.C. 1611
apply with regard to the distribution of
grants to non-qualifying aliens as
defined therein, so those individuals
would not qualify for such grants under
any interpretation of ‘‘students.’’ On the
other hand, within the boundaries
established by the terms of the CARES
Act and other applicable statutes,
institutions have discretion in
distributing emergency financial aid
grants to students, so even if an
institution decided to use a broad
definition of ‘‘students’’ in the absence
of this rule, the institution might not
exercise its discretion to award grants to
everyone who meets that broader
definition. It is therefore difficult to
estimate with any degree of certainty
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Fmt 4700
Sfmt 4700
Proprietary
1,053,455
916,722
136,733
25,903
59.90
412,048
Total
24,359,671
20,997,216
3,362,455
1,126,722
19,745,193
how institutions would use their HEERF
allocations differently for distribution of
emergency financial aid grants to
students in the absence of this rule.
Students will benefit from assistance
in paying additional expenses
associated with elements included in
their cost of attendance, such as room
and board, that changed with the
disruption of campus activities. As
confirmed by the Internal Revenue
Service, the relief provided under
section 18004 of the CARES Act will not
be considered gross income, so students
have no Federal tax consequences to
deter them from accepting this
assistance. Students will have to work
with their institutions to access the
funds according to whatever process the
institution establishes to award the
relief. As described in the Paperwork
Reduction Act section of this preamble,
students are expected to take 263,138
hours for a total of $4.71 million at a
wage rate of $17.89 11 to apply for
emergency relief in 2020.
Institutions are also affected by this
final rule. They have some flexibility in
determining how they will distribute
the funds they were allocated for this
emergency relief. They will incur some
costs in setting criteria or establishing
an application process for their
students. We assume the distribution of
the funds can largely rely on existing
processes and information involved in
the disbursement of other title IV aid,
but there will be some burden in
confirming students’ eligibility for the
emergency relief, including for students
who do not have an existing valid SAR
or ISIR for the 2019–20 or 2020–21
award years. This could involve
developing an application that includes
student attestation under the penalty of
11 Students’ hourly rate estimated using Bureau of
Labor Statistics (BLS) for Sales and Related
Workers, All Other, available at: https://
data.bls.gov/cgi-bin/print.pl/oes/current/oes_
nat.htm. Last accessed May 20, 2020.
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perjury to meeting the requirements of
section 484 of the HEA. For students
who knowingly misrepresent the truth
in their attestation, the school may take
disciplinary action against the student
or require repayment of the emergency
grant. As described in the Paperwork
Reduction Act section of this preamble,
burden on institutions is estimated to
increase by 25,680 hours and $1,177,941
at a wage rate of $45.87 for
postsecondary education
administrators 12 in 2020.
To the extent that students use their
emergency financial aid grants for
expenses related to elements of their
cost of attendance provided by
institutions, those institutions will
receive some revenue students may
otherwise have been unable to pay at
this time. Table 2 summarizes the
amounts to be allocated to institutions
by sector. The full breakout of amounts
allocated to individual institutions,
including the maximum that can be
allocated to institutional costs, is
available in the Allocations for section
18004(a)(1) of the CARES Act
document 13 on the Department’s
CARES Act website.14 These allocations
were made according to the formula
described in the Methodology for
Calculating Allocations document 15 on
the Department’s CARES Act website.
The allocation formula emphasizes
institutions’ share of Pell Grant
36501
recipients with 75 percent of the
allocation based on each IHE’s share of
full-time equivalent (FTE) enrollment of
Pell Grant recipients who were not
enrolled exclusively in distance
education prior to the coronavirus
emergency, relative to the share of such
individuals in all institutions. The
remaining 25 percent is based on the
institution’s share of FTE enrollment of
students who were not Pell Grant
recipients and who were not enrolled
exclusively in distance education prior
to the coronavirus emergency. This
formula helps direct relief to
institutions that serve lower income
students as part of their on-campus
operations.
TABLE 2—SUMMARY OF HEERF ALLOCATIONS
Row labels
Private Non-Profit <2 Yrs ................................................................................................................
Private Non-Profit 2–3 Yrs ...............................................................................................................
Private Non-Profit 4 Yrs or More .....................................................................................................
Proprietary <2 Yrs ...........................................................................................................................
Proprietary 2–3 Yrs ..........................................................................................................................
Proprietary 4 Yrs or More ................................................................................................................
Public <2 Yrs ...................................................................................................................................
Public 2–3 Yrs .................................................................................................................................
Public 4 Yrs or More ........................................................................................................................
11,121,217
31,469,853
2,441,436,384
314,169,982
415,718,070
388,802,168
40,318,527
2,655,311,849
6,208,906,453
5,560,619
15,734,951
1,220,718,556
157,085,261
207,859,135
194,401,134
20,159,318
1,327,656,148
3,104,453,411
Grand Total ...............................................................................................................................
12,507,254,503
6,253,628,533
Net Budget Impact
We estimate that the definition of
student eligibility for the emergency
financial aid grants to students will not
have an impact on the Federal budget.
The CARES Act provided a maximum of
$12.5 billion, with a minimum of $6.25
billion required to be spent on
emergency financial aid grants to
students and not spent on institutional
expenses. The final rule does not impact
the Federal budget because it clarifies
which students are eligible to receive
emergency relief provided by the
CARES Act but do not change the
amount available for such grants. As
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Sum of total allocation
Sum of minimum
allocation to be
awarded for
emergency
financial aid
grants to students
12 Based on BLS 2019 median hourly wage rate
for postsecondary education administrators in the
BLS Occupational Outlook Handbook. Available at
www.bls.gov/ooh/management/postsecondary-
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described in the Costs, Benefits, and
Transfers section related to institutions,
allocations have been determined and
$11.1 billion of the funding has been
disbursed to institutions already, with
$50 million held in reserve to account
for data limitations in allocating the
initial amounts to eligible institutions.
We anticipate that $12.5 billion will
ultimately be disbursed in 2020, and
therefore estimate $12.5 billion in
transfers in 2020 relative to a prestatutory baseline.
default/files/omb/assets/omb/circulars/
a004/a-4.pdf), in the following table we
have prepared an accounting statement
showing the classification of the
impacts associated with the provisions
of these final regulations in 2020, using
3% and 7% discount rates. This table
provides our best estimate of the
changes in monetized transfers in 2020
as a result of these final regulations. We
note that transfers below flow from the
Federal Government to eligible students
and are processed through institutions.
Accounting Statement
As required by OMB Circular A–4
(available at www.whitehouse.gov/sites/
education-administrators.htm. Last accessed May
20, 2020.
13 Available at www2.ed.gov/about/offices/list/
ope/allocationstableinstitutionalportion.pdf.
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14 www2.ed.gov/about/offices/list/ope/
caresact.html.
15 Available at www2.ed.gov/about/offices/list/
ope/
heerf90percentformulaallocationexplanation.pdf.
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Federal Register / Vol. 85, No. 117 / Wednesday, June 17, 2020 / Rules and Regulations
TABLE 3—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED IMPACTS IN 2020
[In millions]
Category
Benefits
Assistance may support students continuing in their programs .............................................................................
Not Quantified
Costs
Paperwork burden on institutions to administer funds and on students to apply ...................................................
7%
$5.9
Category ..................................................................................................................................................................
Transfers
Relief for eligible students and institutions to help with additional expenses due to disruption of campus activities ........................................................................................................................................................................
Regulatory Flexibility Act Certification
The Regulatory Flexibility Act does
not apply to this rulemaking because
there is good cause to waive notice and
comment under the Administrative
Procedure Act (5 U.S.C. 553).
The Secretary certifies that this final
rule will not have a significant
economic impact on a substantial
number of small entities. The U.S. Small
Business Administration Size Standards
define ‘‘small entities’’ as for-profit or
nonprofit institutions with total annual
revenue below $7,000,000 or, if they are
institutions controlled by small
governmental jurisdictions (that are
comprised of cities, counties, towns,
townships, villages, school districts, or
special districts), with a population of
less than 50,000.
However, as noted in several of the
Department’s recent regulations, we
believe that an enrollment-based
standard for small entity status is more
applicable to institutions of higher
education. The Department recently
proposed a size classification based on
enrollment using IPEDS data that
established the percentage of
institutions in various sectors
3%
$5.9
7%
$12,500
3%
$12,500
considered to be small entities, as
shown in Table 4. We described this
size classification in the NPRM
published in the Federal Register on
July 31, 2018 for the proposed borrower
defense rule (83 FR 37242, 37302). The
Department discussed the proposed
standard with the Chief Counsel for
Advocacy of the Small Business
Administration, and while no change
has been finalized, the Department
continues to believe this approach better
reflects a common basis for determining
size categories that is linked to the
provision of educational services.
TABLE 4—SMALL ENTITIES UNDER ENROLLMENT BASED DEFINITION
Level
2-year
2-year
2-year
4-year
4-year
4-year
Type
Small
Total
Percent
..............................................................
..............................................................
..............................................................
..............................................................
..............................................................
..............................................................
Public ..............................................................
Private ............................................................
Proprietary ......................................................
Public ..............................................................
Private ............................................................
Proprietary ......................................................
342
219
2,147
64
799
425
1,240
259
2,463
759
1,672
558
28
85
87
8
48
76
Total .........................................................
.........................................................................
3,996
6,951
57
This rule will benefit those
institutions of higher education that are
small entities by allowing them to use
a familiar existing eligibility framework
to determine who should receive
emergency financial aid grants under
HEERF. As described in the Regulatory
Impact Analysis, institutions may
benefit from applying no more than 50
percent of their allocation of HEERF
funds to institutional costs, so some
small entities will benefit from those
revenues. They will also have to
establish a process for determining
which of their students should receive
and disburse the funds accordingly. We
expect that the 2,586 estimated small
entities allocated funds for this purpose
under the CARES Act will spend a total
of 5,172 hours totaling $237,240 at a
wage rate of $45.87 11 for postsecondary
administrators to administer the
distribution of the relief.
Table 5 shows the allocations of funds
to small entities by sector, with any
institution for which there was no small
business indicator available considered
a small entity. As for all institutions, the
allocations of funds to specific small
institutions is available on the
Department’s CARES website.12
khammond on DSKJM1Z7X2PROD with RULES
TABLE 5—SUMMARY OF ALLOCATIONS TO SMALL ENTITIES BY SECTOR
Sum of total
allocation
Sector
Private Non-Profit <2 Yrs ............................................................................................................................
Private Non-Profit 2–3 Yrs ...........................................................................................................................
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8,274,977
20,417,294
17JNR1
Sum of minimum
allocation to be
awarded for emergency financial aid
grants to students
4,137,498
10,208,669
Federal Register / Vol. 85, No. 117 / Wednesday, June 17, 2020 / Rules and Regulations
36503
TABLE 5—SUMMARY OF ALLOCATIONS TO SMALL ENTITIES BY SECTOR—Continued
Sum of total
allocation
Sector
Sum of minimum
allocation to be
awarded for emergency financial aid
grants to students
Private Non-Profit 4 Yrs or More .................................................................................................................
Proprietary <2 Yrs .......................................................................................................................................
Proprietary 2–3 Yrs ......................................................................................................................................
Proprietary 4 Yrs or More ............................................................................................................................
Public <2 Yrs ...............................................................................................................................................
Public 2–3 Yrs .............................................................................................................................................
Public 4 Yrs or More ....................................................................................................................................
266,608,121
239,330,457
177,306,399
84,269,294
29,196,455
28,278,395
56,909,101
133,304,213
119,665,488
88,653,273
42,134,681
14,598,279
14,139,221
28,454,561
Grand Total ...........................................................................................................................................
910,590,493
455,295,883
As institutions control the
distribution of the funds to eligible
students and have flexibility to establish
a process suitable to their
circumstances, no alternatives were
considered specifically for small
entities.
Paperwork Reduction Act of 1995
As part of its continuing effort to
reduce paperwork and respondent
burden, the Department provides the
general public and Federal agencies
with an opportunity to comment on
proposed and continuing collections of
information, in accordance with the
Paperwork Reduction Act of 1995 (PRA)
(44 U.S.C. 3506(c)(2)(A)). This helps
ensure that: The public understands the
Department’s collection instructions,
respondents can provide the requested
data in the desired format, reporting
burden (time and financial resources) is
minimized, collection instruments are
clearly understood, and the Department
can properly assess the impact of
collection requirements on respondents.
In determining eligibility for these
funds, IHEs are being directed to use the
Department’s interpretation of
‘‘student,’’ meaning a person who is
eligible under section 484 of the HEA to
receive title IV aid, as suggested by the
references to title IV in the context of
section 18004.
We believe that most institutions will
expand their current financial aid
appeals process and utilize that
framework to receive requests for
COVID–19 assistance from eligible
students. We estimate that each
institution that received an allocation
would require five hours to set up any
new form for students to complete and
establish review and recordkeeping
procedures to be able to comply with
the separate reporting requirements in
the Certification and Agreement
between the institutions and the
Secretary. The estimated burden for the
1,651 private institutions is 8,255 hours
(1,651 × 5 hours). The estimated burden
for the 1,641 proprietary institutions is
8,205 hours (1,641 × 5 hours). The
estimated burden for the 1,844 public
institutions is 9,220 (1,844 × 5 hours).
The total new burden to all institutions
receiving an allocation of funds is
25,680 hours (5,136 institutions × 5
hours).
Using the unique number of title IV
aid recipients 10,319,154 (both Federal
grant and Federal student loan) for the
Award Year 2019–2020 we estimate that
15 percent, or 1,547,873, of those
recipients will request additional aid
from their institution based on changed
circumstances due to the coronavirus.
We estimate approximately 20 minutes
per students to complete the request for
additional aid for a total new burden of
510,798 hours (.33 hours × 1,547,873).
This is a new information collection
with a total burden assessment of
536,478 hours for 1,553,009 respondents
with a single response. The Department
has requested an emergency clearance to
allow for the immediate collection of
this information. The public will be
provided the ability to comment on the
proposed burden assessment through
the standard information collection
process with notice requesting comment
being published in the Federal Register.
1840–NEW—ELIGIBILITY OF STUDENTS AT INSTITUTIONS OF HIGHER EDUCATION FOR FUNDS UNDER THE CARES ACT
Number of
respondents
khammond on DSKJM1Z7X2PROD with RULES
Affected entity
Number of
responses
Hours per
response
Total
burden
Estimate
costs
student
$17.89
institutions
$45.87
Individual Student ................................................................
Private Institution .................................................................
Proprietary Institution ...........................................................
Public Institution ...................................................................
1,547,873
1,651
1,641
1,844
1,547,873
1,651
1,641
1,844
.33
5
5
5
510,798
8,255
8,205
9,220
$9,138,176
378,657
376,363
422,921
Total ..............................................................................
1,553,009
1,553,009
........................
536,478
10,316,117
Intergovernmental Review: This
program is subject to Executive Order
12372 and the regulations in 34 CFR
part 79. One of the objectives of the
Executive order is to foster an
intergovernmental partnership and a
VerDate Sep<11>2014
17:27 Jun 16, 2020
Jkt 250001
strengthened federalism. The Executive
order relies on processes developed by
State and local governments for
coordination and review of proposed
Federal financial assistance.
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This document provides early
notification of our specific plans and
actions for this program.
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Federalism
Executive Order 13132 requires us to
ensure meaningful and timely input by
State and local elected officials in the
development of regulatory policies that
have federalism implications.
‘‘Federalism implications’’ means
substantial direct effects on the States,
on the relationship between the
National Government and the States, or
on the distribution of power and
responsibilities among the various
levels of government. This interim final
regulation may have federalism
implications. We encourage State and
local elected officials to review and
provide comments on this interim final
regulation.
Accessible Format: Individuals with
disabilities can obtain this document in
an accessible format (e.g., braille, large
print, audiotape, or compact disc) on
request to the person listed under FOR
FURTHER INFORMATION CONTACT.
Electronic Access to This Document:
The official version of this document is
the document published in the Federal
Register. You may access the official
edition of the Federal Register and the
Code of Federal Regulations at
www.govinfo.gov. At this site you can
view this document, as well as all other
documents of this Department
published in the Federal Register, in
text or portable document format PDF.
To use PDF, you must have Adobe
Acrobat Reader, which is available for
free on the site.
You may also access documents of the
Department published in the Federal
Register by using the article search
feature at www.federalregister.gov.
Specifically, through the advanced
search feature at this site, you can limit
your search to documents published by
the Department.
List of Subjects in 34 CFR Part 668
khammond on DSKJM1Z7X2PROD with RULES
Betsy DeVos,
Secretary of Education.
For the reasons discussed in the
preamble, the Secretary amends title 34
of the Code of Federal Regulations as
follows:
17:27 Jun 16, 2020
Jkt 250001
1. The authority citation for part 668
continues to read as follows:
■
Authority: 20 U.S.C. 1001–1003, 1070a,
1070g, 1085, 1087b, 1087d, 1087e, 1088,
1091, 1092, 1094, 1099c, and 1099c–1,
1221e–3, and 3474; Pub. L. 111–256, 124
Stat. 2643; unless otherwise noted.
2. Section 668.2 is amended by adding
the definition ‘‘Student,’’ in alphabetical
order to read as follows:
■
§ 668.2
General definitions.
*
*
*
*
*
Student, for purposes of the phrases
‘‘grants to students’’ and ‘‘emergency
financial aid grants to students’’ in
sections 18004(a)(2), (a)(3), and (c) of
the Coronavirus Aid, Relief, and
Economic Security (CARES) Act, is
defined as an individual who is, or
could be, eligible under section 484 of
the HEA, to participate in programs
under title IV of the HEA.
(Authority: 20 U.S.C. 1221e–3 3474)
*
*
*
*
*
[FR Doc. 2020–12965 Filed 6–15–20; 4:15 pm]
BILLING CODE 4000–01–P
ENVIRONMENTAL PROTECTION
AGENCY
[EPA–R06–OAR–2020–0229; FRL 10009–40–
Region 6]
Air Plan Approval; Texas; Approval of
Substitution for Dallas-Fort Worth Area
Transportation Control Measures
Environmental Protection
Agency (EPA).
ACTION: Final rule; notice of
administrative change.
AGENCY:
The Environmental Protection
Agency (EPA) is making an
administrative change to update the
Code of Federal Regulations (CFR) to
reflect a change made to the Texas State
Implementation Plan (SIP) on February
21, 2020, as a result of EPA’s
concurrence on substitute transportation
control measures (TCMs) for the DallasFort Worth (DFW) 8-hour ozone
nonattainment area portion of the Texas
SIP. EPA has determined that the
substitution of the TCMs is consistent
with the Clean Air Act and EPA’s
national guidance on such substitutions,
and therefore falls within the ‘‘good
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Fmt 4700
cause’’ exemption in the Administrative
Procedure Act (APA) which, upon
finding ‘‘good cause,’’ authorizes an
agency to make an action effective
immediately.
DATES:
This action is effective June 17,
2020.
The EPA has established a
docket for this action under Docket ID
No. EPA–R06–OAR–2020–0229. All
documents in the docket are listed on
the https://www.regulations.gov website.
Although listed in the index, some
information is not publicly available,
e.g., Confidential Business Information
or other information whose disclosure is
restricted by statute. Certain other
material, such as copyrighted material,
is not placed on the internet and will be
publicly available only in hard copy
form. Publicly available docket
materials are available electronically
through https://www.regulations.gov.
ADDRESSES:
Jeff
Riley, 214–665–8542, riley.jeffrey@
epa.gov. Out of an abundance of caution
for members of the public and our staff,
the EPA Region 6 office may be closed
to the public to reduce the risk of
transmitting COVID–19. Please call or
email the contact listed above if you
need alternative access to material
indexed but not provided in the docket.
FOR FURTHER INFORMATION CONTACT:
Under
Clean Air Act (CAA) section 176(c)(8),
States are allowed to substitute TCMs in
approved SIPs for replacement TCMs
which achieve equivalent or greater
emissions reductions without having to
undertake the standard SIP revision
process.1 The DFW area metropolitan
planning organization, the North Central
Texas Council of Governments
(NCTCOG),2 identified for substitution
three TCMs originally approved as
High-Occupancy Vehicle (HOV) lanes
into the DFW SIP as follows:
SUPPLEMENTARY INFORMATION:
40 CFR Part 52
SUMMARY:
Administrative practice and
procedure, Aliens, Colleges and
universities, Consumer protection,
Grant programs—education, Loan
programs—education, Reporting and
recordkeeping requirements, Selective
Service System, Student aid, Vocational
education.
VerDate Sep<11>2014
PART 668—STUDENT ASSISTANCE
GENERAL PROVISIONS
Sfmt 4700
1 The Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users
(SAFETEA–LU) transportation funding and
authorization bill, which was signed into law on
August 10, 2005, revised the CAA’s section 176(c)
transportation conformity provisions to allow states
to substitute or add TCMs into approved SIPs
without the standard SIP revision process. These
revisions facilitate compliance with the
transportation conformity rule’s requirements for
timely implementation of TCMs (40 CFR 93.113) by
expediting the TCM substitution process.
2 As the Metropolitan Planning Organization for
the DFW area, NCTCOG is delegated authority
under 30 Texas Administrative Code § 114.270 to
implement SIP-approved TCMs for the DFW ozone
nonattainment area.
E:\FR\FM\17JNR1.SGM
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]]>Agencies
[Federal Register Volume 85, Number 117 (Wednesday, June 17, 2020)]
[Rules and Regulations]
[Pages 36494-36504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12965]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF EDUCATION
34 CFR Part 668
[Docket ID ED-2020-OPE-0078]
RIN 1840-ZA04
Eligibility of Students at Institutions of Higher Education for
Funds Under the Coronavirus Aid, Relief, and Economic Security (CARES)
Act
AGENCY: Office of Postsecondary Education, Department of Education.
ACTION: Interim final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Education (Department) issues this interim
final rule so that institutions of higher education may appropriately
determine which individuals attending their institution are eligible to
receive emergency financial aid grants to students under the
Coronavirus Aid, Relief, and Economic Security (CARES) Act (March 27,
2020).
DATES: These regulations are effective June 17, 2020. We must receive
your comments on or before July 17, 2020.
ADDRESSES: Submit your comments through the Federal eRulemaking Portal
or via postal mail, commercial delivery, or hand delivery. We will not
accept comments submitted by fax or by email or those submitted after
the comment period. To ensure that we do not receive duplicate copies,
please submit your comments only once. In addition, please include the
Docket ID at the top of your comments.
If you are submitting comments electronically, we strongly
encourage you to submit any comments or attachments in Microsoft Word
format. If you must submit a comment in Adobe Portable Document Format
(PDF), we strongly encourage you to convert the
[[Page 36495]]
PDF to print-to-PDF format or to use some other commonly used
searchable text format. Please do not submit the PDF in a scanned
format. Using a print-to-PDF format allows the Department to
electronically search and copy certain portions of your submissions.
Federal eRulemaking Portal: Go to www.regulations.gov to
submit your comments electronically. Information on using
regulations.gov, including instructions for accessing agency documents,
submitting comments, and viewing the docket, is available on the site
under ``Help.''
Postal Mail, Commercial Delivery, or Hand Delivery: The
Department strongly encourages commenters to submit their comments
electronically. However, if you mail or deliver your comments about the
interim final rule, address them to Gaby Watts, U.S. Department of
Education, 400 Maryland Ave. SW, Room 258-02, Washington, DC 20202.
Privacy Note: The Department's policy is to make comments received
from members of the public available for public viewing on the Federal
eRulemaking Portal at www.regulations.gov. Therefore, commenters should
include in their comments only information that they wish to make
publicly available.
FOR FURTHER INFORMATION CONTACT: For further information contact Gaby
Watts, U.S. Department of Education, 400 Maryland Ave. SW, Room 258-02,
Washington, DC 20202. Telephone: 202-453-7195. Email:
[email protected].
If you use a telecommunications device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay Service (FRS), toll-free, at
(800) 877-8339.
SUPPLEMENTARY INFORMATION:
Invitation to Comment: Although the Department has decided to issue
this final rule without first publishing a proposed rule for public
comment, we are interested in whether you think we should make any
changes to this rule. We invite your comments. We will consider these
comments in determining whether to revise the rule.
We invite you to assist us in complying with the specific
requirements of Executive Orders 12866 and 13563 and their overall
requirement of reducing regulatory burden that might result from this
final rule. Please let us know of any further ways we could reduce
potential costs or increase potential benefits while preserving the
effective and efficient administration of the Department's programs and
activities.
During and after the comment period, you may inspect all public
comments about this interim final rule by accessing Regulations.gov.
Due to the current COVID-19 pandemic, the Department's buildings are
currently not open. However, upon reopening, you may also inspect the
comments in person at 400 Maryland Ave. SW, Washington, DC 20202,
between 8:30 a.m. and 4:00 p.m., Eastern Time, Monday through Friday of
each week except Federal holidays. To schedule a time to inspect
comments, please contact the person listed under FOR FURTHER
INFORMATION CONTACT.
Assistance to Individuals with Disabilities in Reviewing the
Rulemaking Record: On request, we will provide an appropriate
accommodation or auxiliary aid to an individual with a disability who
needs assistance to review the comments or other documents in the
public rulemaking record for this interim final rule. To schedule an
appointment for this type of accommodation or auxiliary aid, please
contact the person listed under FOR FURTHER INFORMATION CONTACT.
Background:
On March 27, 2020, Congress enacted the CARES Act, Public Law 116-
136, to help Americans cope with the economic and health crises created
by the novel coronavirus disease (COVID-19) outbreak. Section 18004 of
the CARES Act establishes the Higher Education Emergency Relief Fund
(HEERF) and instructs the Secretary to allocate funding to eligible
institutions of higher education in connection with the COVID-19
outbreak. Section 18004(c) specifically allows institutions to use
their HEERF allocation under Sec. 18004(a)(1) for ``any costs
associated with significant changes to the delivery of instruction due
to the coronavirus,'' while adding the restriction that funds cannot be
used for ``payment to contractors for the provision of pre-enrollment
recruitment activities; endowments; or capital outlays associated with
facilities related to athletics, sectarian instruction, or religious
worship.'' Section 18004(c) also states that institutions must use at
least 50 percent of their allocations ``to provide emergency financial
aid grants to students for expenses related to the disruption of campus
operations due to coronavirus (including eligible expenses under a
student's cost of attendance, such as food, housing, course materials,
technology, health care, and child care),'' implicitly allowing
institutions to use more than 50 percent of their funds for this
purpose. Thus, the first sentence of section 18004(c) generally allows
an institution to use its allocated HEERF funds under section
18004(a)(1) to cover certain coronavirus-related costs, while the
second sentence requires an institution to give at least half of its
allocated HEERF funds as grants to students. Finally, section 18004(e)
requires institutions to submit reports to the Secretary describing how
the funds were used under the section and authorizes the Secretary to
specify the time and manner of such reporting.
Although the second sentence of section 18004(c) states that the
emergency financial aid grants are to be given to students, the CARES
Act does not define the term ``student'' or the phrases ``grants to
students'' or ``emergency financial aid grants to students.'' In
addition to leaving these terms undefined, Congress also included an
implicit reference to title IV terms immediately after the phrase
``emergency financial aid grants to students,'' 18004(c) (``including
eligible expenses under a student's cost of attendance''), and explicit
references to that same title IV standard following the phrase ``grants
to students'' in two of the preceding subsections, 18004(a)(2) and
(a)(3) (``the student's cost of attendance (as defined under section
472 of the Higher Education Act''). In determining who constitutes a
``student'' for purposes of ``emergency financial aid grants to
students'' in section 18004 of the CARES Act, the Department is mindful
that ``[s]tatutory construction . . . is a holistic endeavor.'' United
Sav. Ass'n of Texas v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S.
365, 371 (1988). In the appropriate circumstances, the Department's
construction of the CARES Act must be informed or even controlled by
other relevant law. (``We assume that Congress is aware of existing law
when it passes legislation,'' Hall v. United States, 566 U.S. 506, 516
(2012) quoting Miles v. Apex Marine Corp., 498 U.S. 19, 32 (1990).) In
context the category of ``student'' recipients eligible for ``emergency
financial aid grants'' is therefore at a minimum ambiguous.
This is a critical ambiguity, requiring the Department to exercise
its narrow interpretative authority under Chevron U.S.A., Inc. v.
Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44 (1984). (`` `The
power of an administrative agency to administer a congressionally
created . . . program necessarily requires the formulation of policy
and the making of rules to fill any gap left, implicitly or explicitly,
by Congress.' quoting Morton v. Ruiz, 415 U.S. 199, 231 (1974). . . .
Sometimes the legislative delegation to an agency on a particular
question is implicit rather than explicit.'') Here the Secretary
[[Page 36496]]
exercises her authority under 20 U.S.C. 1221e-3 and 20 U.S.C. 3474.
Relying on statutory language and context to develop a harmonious
construction faithful to the entire statutory scheme, see Food and Drug
Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132-33 (2000)
(``In determining whether Congress has specifically addressed the
question at issue, a reviewing court should not confine itself to
examining a particular statutory provision in isolation. The meaning--
or ambiguity--of certain words or phrases may only become evident when
placed in context.''), we have concluded that Congress intended the
category of those eligible for ``emergency financial aid grants to
students'' in section 18004 of the CARES Act to be limited to those
individuals eligible for title IV assistance.
The Department considered a number of factors in reaching this
conclusion. For one, an interpretation of the term ``student'' in
``emergency financial aid grants to students'' that was broad enough to
cover anyone engaged in learning, or anyone enrolled in any way at an
institution, or anyone enrolled full-time at an institution in a
program leading to a recognized postsecondary credential, would be
significantly curtailed at the outset by existing law independent of
title IV with regard to certain immigration statuses. 8 U.S.C. 1611(a)
already prohibits certain individuals from receiving any ``Federal
public benefit'' and applies ``[n]otwithstanding any other provision of
law.'' This prohibition clearly applies to the HEERF funds. Section
1611(c) defines ``Federal public benefit'' to include (A) ``any grant .
. . provided by an agency of the United States or by appropriated funds
of the United States,'' as well as (B) ``any . . . postsecondary
education . . . benefit . . . for which payments or assistance are
provided to an individual . . . by an agency of the United States or by
appropriated funds of the United States.'' \1\ To the extent an
institution uses HEERF funds, which qualify as ``appropriated funds of
the United States,'' to provide ``emergency financial aid grants to
students,'' the grants would qualify as a Federal public benefit under
both Section 1611(c)(1)(A) and (B) because they would be ``grant[s] . .
. by appropriated funds,'' as well as ``postsecondary education''
benefits to individuals. To the extent an institution otherwise uses
the funds to make payments to students for purposes of, for example,
``costs associated with significant changes to the delivery of
instruction due to the coronavirus,'' these payments would also qualify
as ``postsecondary education'' benefits to individuals. The Department
has not identified any specific language in Section 18004, or elsewhere
in the CARES Act, that suggests Congress intended to include aliens who
are not ``qualified'' for purposes of Section 1611 among the recipients
of HEERF funds, notwithstanding the preexisting general prohibition in
Section 1611.
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\1\ Because title IV also contains an eligibility requirement
based on immigration status which is similar in most respects to the
requirement in 8 U.S.C. 1611, there is little remaining application
for the prohibition in 8 U.S.C. 1611 once title IV eligibility
requirements have been applied.
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On the other extreme, the Department concludes that a more narrow
interpretation of the term ``student'' in the phrase ``emergency
financial aid grants to students''--for example, to cover only the
group that received Federal Pell Grants as referenced in section
18004(a)(1)(A)--would be overly restrictive and less supportable under
the language of the CARES Act.
Earlier in the CARES Act, in section 3504 entitled ``Use of
Supplemental Educational Opportunity Grants for Emergency Aid,''
Congress expressly authorizes institutions to use money allocated to
them under the Federal Supplemental Educational Opportunity Grant
(FSEOG) program, 20 U.S.C. 1070b et seq., for ``emergency financial aid
grants to students,'' which is the identical phrase Congress used in
section 18004. Although Congress did not expressly state that these
emergency financial aid grants to students must be limited to those
students who are eligible for participation in programs under title IV
of the HEA, the context indicates that Congress intended that
restriction as a general rule. Not only was the previously planned use
of the funds conditioned upon title IV eligibility (since the FSEOG
program is part of title IV of the HEA) but also because the text of
the CARES Act allows institutions to ``waive the amount of need
calculation under section 471'' of the HEA, which is a calculation that
applies to title IV aid.
Because ``identical words and phrases within the same statute
should normally be given the same meaning,'' Powerex Corp. v. Reliant
Energy Services, Inc., 551 U.S. 224, 232 (2007), the implicit title IV
eligibility requirement associated with ``emergency financial aid
grants to students'' in section 3504 should apply to the distribution
of ``emergency financial aid grants to students'' in section 18004.
Congress did not previously choose to provide emergency financial aid
grants through the HEA, and thus these grants, by definition, do not
constitute Federal financial student aid under the HEA, including title
IV of the HEA. However, even though it is true that all title IV aid is
subject to title IV eligibility requirements, it does not follow that
all non-title IV aid is exempt from title IV eligibility requirements.
Rather, non-title IV aid can be subject to title IV eligibility
requirements. For example, scholarships distributed under the Fund for
the Improvement of Postsecondary Education, a non-title IV program,
require that recipients meet certain title IV eligibility requirements,
as noted below. 20 U.S.C. 1138(d).
In providing emergency financial aid grants through section 18004
of the CARES Act, Congress also used the framework under title IV of
the HEA for the distribution of these emergency financial aid grants to
students, implying that the Department and institutions adhere to the
requirements under title IV, such as using the definition of ``cost of
attendance'' under title IV of the HEA and the same systems for
distributing Federal financial student aid to institutions under title
IV of the HEA.
Indeed, Congress specifically references title IV of the HEA in
various provisions in section 18004 of the CARES Act, including the
following provisions:
Section 18004(a)(1) links a component of the institutional
allocation for HEERF to enrollment of Pell Grant recipients, and a
student must be eligible for Federal financial student aid under
section 484 of title IV of the HEA to receive Pell Grants. 20 U.S.C.
1070a(a) (stating Pell Grants are only for an ``eligible student
(defined in accordance with [S]ection 484 [of the HEA])''); 20 U.S.C.
1091.
Sections 18004(a)(2) and (3) require institutions to use
funds ``for grants to students for any component of the student's cost
of attendance (as defined under Sec. 472 of [title IV of] the Higher
Education Act), including food, housing, course materials, technology,
healthcare, and child care.'' (Emphasis added.)
Section 18004(a)(3) specifically references ``part B of
title VII of the HEA,'' and section 741(d)(1) of part B of title VII of
the HEA expressly requires students to be eligible under section 484(a)
of the HEA to receive grants or scholarships. 20 U.S.C. 1138(d).
Section 18004(b) expressly requires the Secretary to use
the same systems that are used to distribute funding to each
institution under title IV of the HEA in order to distribute funds to
each institution under section 18004(a)(1) of the CARES Act.
[[Page 36497]]
Section 18004(c) again expressly refers to ``a student's
cost of attendance,'' which is a defined term in section 472 of the
HEA. 20 U.S.C. 1087ll.
The most congruent definition of ``student'' for purposes of
``emergency financial aid grants to students'' in section 18004 is a
person who is or would be eligible under section 484 of the HEA for
title IV aid. Indeed, it would be an illogical result for Congress to
require students to be eligible under section 484 of title IV of the
HEA for grants under section 18004(a)(3) of the CARES Act, which
expressly references part B of title VII of the HEA, but not for grants
under sections 18004(a)(1) and (2) of the CARES Act, especially when
Congress in section 18004(d) directs the Secretary to prioritize funds
under section 18004(a)(3) for institutions that did not receive
sufficient funding under section 18004(a)(1) and (2). ``Interpretations
of statute which would produce absurd results are to be avoided.''
Griffin v. Ocean Contractors, Inc., 458 U.S. 564, 576 (1982). To
interpret section 18004 in a holistic manner, it appears that the best
interpretation of ``student'' where section 18004 references
``emergency financial aid grants to students'' is to mean a person who
is eligible under section 484 of the HEA to receive title IV aid.\2\
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\2\ To calculate the HEERF allocation under section
18004(a)(1)(B), the Department ``approximated the factors using the
best available data'' by multiplying the 2017/2018 full-time
enrollment number by the fall 2018 percentage of undergraduate,
graduate, and professional students not enrolled exclusively in
distance education, as self-reported by institutions and compiled in
the Department's Integrated Postsecondary Education Data System
(IPEDS). See Methodology for Calculating Allocations per Section
18004(a)(1) of the CARES Act, https://www2.ed.gov/about/offices/list/ope/heerf90percentformulaallocationexplanation.pdf.
Thus, the approach taken in calculating the ``full-time
equivalent enrollment of students'' in section 18004(a)(1)(B)
differs from the approach taken in this rule in interpreting and
applying ``grants to students'' elsewhere in section 18004. The
Department intends to interpret the term ``student'' in the same way
throughout section 18004, but did not have data available on the
number of individuals enrolled at each institution who are or could
be eligible for title IV aid, so the Department had to use a
different measure based on available data. As between the available
options, the Department believed that using a broader number for
part of the baseline in establishing each institution's share under
18004(a)(1) made sense because funds used toward the first allowed
purpose in 18004(c) (to cover any costs associated with significant
changes to the delivery of instruction due to the coronavirus) apply
to the entire institution regardless of the definition of
``student.'' The Department also deemed it more important to move
expeditiously to calculate the HEERF allocation despite the
acknowledged ``limitations of th[e] data,'' rather than stopping the
HEERF process in order to gather additional data solely for purposes
of calculating the HEERF allocation.
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Final Rule:
For purposes of the phrases ``grants to students'' and ``emergency
financial aid grants to students'' in sections 18004(a)(2), (a)(3), and
(c) of the CARES Act, ``student'' is defined as an individual who is,
or could be, eligible under section 484 of the HEA, to participate in
programs under title IV of the HEA. We add this definition to 34 CFR
668.2.
An important policy goal for the Department is to make emergency
financial aid grants available to students in the most efficient,
effective, and expedient way possible and consistent with Congressional
intent. At the same time, the Department has an obligation to taxpayers
to prevent waste, fraud, and abuse. The potential for waste, fraud, and
abuse is significant when institutions of higher education are given
the opportunity to quickly make cash awards to students, particularly
when institutions are rightfully concerned about declining enrollments
and the loss of ancillary revenue as a result of COVID-19. In addition,
there have been reports that the unusual circumstances caused by COVID-
19 have given rise to new efforts to defraud government programs in
other contexts.\3\
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\3\ See, e.g., Mike Baker, Feds Suspect Vast Fraud Network Is
Targeting U.S. Unemployment Systems, New York Times,
www.nytimes.com/2020/05/16/us/coronavirus-unemployment-fraud-secret-service-washington.html (last visited May 19, 2020).
---------------------------------------------------------------------------
The Department has considered these issues in reaching its
interpretation of the category of those eligible for ``emergency
financial aid grants to students'' in section 18004(a)(2), (a)(3), and
(c). The Department has concluded that the best approach to
interpreting ``student'' in ``emergency financial aid grants to
students'' is to mean a person who is eligible under section 484 of the
HEA to receive title IV aid, as suggested by the references to title IV
elsewhere in section 18004. This approach uses a clear, existing
standard that is familiar to the Department and to institutions and
will allow both the Department and institutions to implement the HEERF
provisions in an efficient, effective, and expedient way. The
Department has placed a high priority on getting assistance to
institutions and individuals as quickly and efficiently as possible in
light of the national emergency and the immediate needs resulting
therefrom, and the use of an existing standard here achieves that same
important goal. The title IV eligibility standard has already been
specified in great detail by the Department in its practice and its
communications with institutions with regard to title IV programs over
the years. In contrast, using a generic, broad standard would require
the Department and institutions to wade through a litany of specific
questions about which groups of potential students do or do not qualify
for ``grants to students.'' \4\
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\4\ For example, there would need to be consideration and a
determination made regarding whether to include or exclude
individuals based on whether they are enrolled for credit, enrolled
in an off-campus program, simultaneously finishing a high school
degree, taking remedial courses, taking only zero-credit thesis
courses, enrolled exclusively in courses not applied towards a
recognized credential, enrolled only in English as a Second Language
programs or Continuing Education Units, auditing classes only,
participating residents or interns in a medical doctor practice
program after receiving their degree, studying abroad at a foreign
university, enrolled in a branch campus in a foreign country, or
participating in Experimental Sites.
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For the majority of students, active participation in title IV
programs will clearly demonstrate to the institution and the Department
that they are qualified as a student to receive emergency financial aid
grants. For example, with regard to the title IV eligibility
requirement related to citizenship or appropriate immigration status in
the United States, the majority of students' statuses can be verified
by the fact of their participation in title IV.\5\ And this
verification also ensures that the disbursement of grants to those
individuals occurs in compliance with the independent statutory
restriction found in 8 U.S.C. 1611.
---------------------------------------------------------------------------
\5\ For the rest of students, qualification can be confirmed by
the method described in the May 1, 2015 Dear Colleague Letter,
entitled ``Citizenship and Immigration Status Documentation'' (DCL
ID: GEN-15-08), the Federal Student Aid Handbook (https://ifap.ed.gov/sites/default/files/attachments/2019-08/1920FSAHbkVol1Ch2.pdf), or by employing the electronic document
submission flexibilities provided in the Department's April 3, 2020,
``UPDATED Guidance for Interruptions of Study Related to COVID-19''
(https://ifap.ed.gov/sites/default/files/attachments/2020-04/040320UPDATEDGuidanceInterruptStudyRelCOVID19Attach.pdf).
---------------------------------------------------------------------------
The Department also acknowledges the efficiency of leveraging
existing processes and procedures to minimize burden on institutions
implementing this IFR. For example, institutions could encourage
students who currently do not receive title IV aid to submit the Free
Application for Federal Student Aid (FAFSA) in order to determine title
IV eligibility.
In addition, this approach to interpreting ``student'' within the
phrase ``emergency financial aid grants to students'' also allows the
Department to prevent potential waste, fraud, and abuse. For example,
without the title IV eligibility standard, the existence of HEERF
funding could incentivize individuals who are not qualified and cannot
qualify under the title IV
[[Page 36498]]
standard to enroll as students, and it could incentivize institutions
to take advantage of this dynamic to further their bottom lines. If a
broad definition of ``student'' were employed for purposes of emergency
financial aid grants to students, unscrupulous institutions could
create cheap classes and programming that provides little or no
educational value and then use the HEERF grant funding to incentivize
individuals not qualified under title IV to enroll as paying students
in those classes and programs, thereby qualifying for a grant.
Alternatively, institutions could use the HEERF grant funding to
incentivize the re-enrollment of students cannot maintain Satisfactory
Academic Progress (SAP) due to reasons beyond the qualifying emergency,
solely for the purpose of increasing revenues via the tuition such
students would pay. Without restriction, institutions could also use
HEERF funds for students who are enrolled at the institution but do not
intend to receive a degree or certificate, thereby diverting funds from
students who are pursuing a degree or certificate in an eligible
program.
Instead, interpreting ``student'' to track title IV eligibility for
purposes of emergency financial aid grants to students will ensure that
institutions are only providing funds to students who are enrolled in
an eligible program at an institution and are maintaining SAP in their
program, among other requirements. Each of these requirements exists
because it focuses the use of Federal resources on valuable educational
activities and excludes areas that are more open to waste, fraud, and
abuse. This approach will thereby allow the Department to reduce the
likelihood and amount of waste, fraud, and abuse in the administration
of the HEERF allocations under the CARES Act.
Waiver of Notice and Comment Rulemaking, Negotiated Rulemaking, and
Delayed Effective Date Under the Administrative Procedure Act
The Department believes its interim final rulemaking authority must
be narrowly construed and exercised only when there is a sound basis
for doing so. However, Congress enacted the CARES Act to help Americans
cope with the urgent economic and health crises created by the COVID-19
outbreak and created the HEERF to provide emergency financial aid
grants to students. In light of the urgent economic challenges facing
many students as a result of the crisis, the Department has determined
that there is good cause for interim final rulemaking and that such
action is in the public interest. In the absence of this interim final
rule, the terms defined herein will remain undefined and indefinite,
and the potential for waste, fraud, and abuse described above will not
have been unaddressed in any legally binding manner.\6\
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\6\ Nor will the Department enforce the title IV eligibility
interpretation announced in this rule against distribution of HEERF
funds that occurred prior to the publication of this rule.
---------------------------------------------------------------------------
Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the
Department generally offers interested parties the opportunity to
comment on proposed rules. However, the APA provides that an agency is
not required to conduct notice and comment rulemaking when the agency,
for good cause, finds that notice and public comment thereon are
impracticable, unnecessary, or contrary to the public interest (5
U.S.C. 553(b)(B)). In light of the current national emergency and the
importance of institutions properly distributing the HEERF allocations
via emergency financial aid grants to students to help with their
expenses related to the disruption of campus operations due to COVID-19
as quickly as possible, the normal rulemaking process would be
impracticable and contrary to the public interest, so good cause exists
for waiving the notice and comment requirements of the APA. Although
the Department has issued guidance to this effect already, that
guidance is not legally binding, the Department understands that
certain institutions have refrained from distributing some or all of
their HEERF funds until a final rule is issued clarifying this point in
a legally binding manner.
The Department is not required to conduct negotiated rulemaking for
this rule. The requirement in HEA section 492 that requires the
Department to obtain public involvement in the development of proposed
regulations for title IV of the HEA does not apply to this final rule,
because it implements the CARES Act, not title IV. Moreover, even if it
did apply, section 492(b)(2) of the HEA provides that negotiated
rulemaking may be waived for good cause when doing so would be
``impracticable, unnecessary, or contrary to the public interest.''
Section 492(b)(2) of the HEA also requires the Secretary to publish the
basis for waiving negotiations in the Federal Register at the same time
as the regulations in question are first published. Even if section 492
applied to this rule, good cause would exist to waive the negotiated
rulemaking requirement, since, as explained above, notice and comment
rulemaking is not practicable or in the public interest in this case.
The master calendar requirement in section 482 of the HEA likewise
does not apply to this rule, because the rule does not relate to the
delivery of student aid funds under title IV.
Additionally, the APA generally requires that regulations be
published at least 30 days before their effective date, except as
otherwise provided by the agency for good cause found and published
with the rule (5 U.S.C. 553(d)(3)). As described above, good cause
exists for this rule to be effective upon publication in light of the
current national emergency and the importance of institutions properly
distributing the HEERF allocations via emergency financial aid grants
to students to help with their expenses related to the disruption of
campus operations due to COVID-19. The CRA requires a major rule may
take effect no sooner than 60 calendar days after an agency submits a
CRA report to Congress or the rule is published in the Federal
Register, whichever is later. 5 U.S.C. 801(a)(3)(A). However, the CRA
creates limited exceptions to this requirement. See id. Sec. 801(c);
Sec. 808. An agency may invoke the ``good cause'' exception under
section 808(2) in the case of rules for which the agency has found
``good cause'' under the APA, section 553(b)(B), to issue the rule
without providing the public with an advance opportunity to comment. As
stated above the Department has found good cause to issue this rule
without notice and comment rulemaking and thus we are not including the
60-day delayed effective date in this rule.
Executive Orders 12866, 13563, and 13771
Regulatory Impact Analysis
Under Executive Order 12866, it must be determined whether this
regulatory action is ``significant'' and, therefore, subject to the
requirements of the Executive order and subject to review by the Office
of Management and Budget (OMB). Section 3(f) of Executive Order 12866
defines a ``significant regulatory action'' as an action likely to
result in a rule that may--
(1) Have an annual effect on the economy of $100 million or more,
or adversely affect a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local, or
Tribal governments or communities in a material way (also referred to
as an ``economically significant'' rule);
[[Page 36499]]
(2) Create serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles stated in the
Executive order.
OMB has determined that this regulatory action is a significant
regulatory action subject to review by OMB under section 3(f) of
Executive Order 12866.
Under Executive Order 13771, for each new regulation that the
Department proposes for notice and comment or otherwise promulgates
that is a significant regulatory action under Executive Order 12866 and
that imposes total costs greater than zero, it must identify two
deregulatory actions. For FY 2020, any new incremental costs associated
with a new regulation must be fully offset by the elimination of
existing costs through deregulatory actions. This rule's designation
under Executive Order 13771 will be informed by public comment.
We have also reviewed these regulations under Executive Order
13563, which supplements and explicitly reaffirms the principles,
structures, and definitions governing regulatory review established in
Executive Order 12866. To the extent permitted by law, Executive Order
13563 requires that an agency--
(1) Propose or adopt regulations only upon a reasoned determination
that their benefits justify their costs (recognizing that some benefits
and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society,
consistent with obtaining regulatory objectives and taking into
account--among other things and to the extent practicable--the costs of
cumulative regulations;
(3) In choosing among alternative regulatory approaches, select
those approaches that maximize net benefits (including potential
economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives rather
than the behavior or manner of compliance a regulated entity must
adopt; and
(5) Identify and assess available alternatives to direct
regulation, including economic incentives--such as user fees or
marketable permits--to encourage the desired behavior, or provide
information that enables the public to make choices.
Executive Order 13563 also requires an agency ``to use the best
available techniques to quantify anticipated present and future
benefits and costs as accurately as possible.'' The Office of
Information and Regulatory Affairs of OMB has emphasized that these
techniques may include ``identifying changing future compliance costs
that might result from technological innovation or anticipated
behavioral changes.''
We are issuing this interim final rule only on a reasoned
determination that its benefits would justify its costs. In choosing
among alternative regulatory approaches, we selected those approaches
that would maximize net benefits. Based on the analysis that follows,
the Department believes that these regulations are consistent with the
principles in Executive Order 13563.
We have also determined that this regulatory action would not
unduly interfere with State, local, and Tribal governments in the
exercise of their governmental functions.
Elsewhere in this section under Paperwork Reduction Act of 1995, we
identify and explain burdens specifically associated with the
information collection requirements.
Need for Regulatory Action
The Department is issuing this interim final rule to clarify which
students are eligible for emergency financial aid grants under section
18004 of the CARES Act. This final rule is meant to balance flexibility
and clarify administration for institutions so the funds can be
provided to eligible students as efficiently as possible with
eligibility requirements consistent with congressional intent and
designed to prevent waste, fraud, and abuse. The emergency financial
aid grants are meant to assist students with expenses related to the
disruption of on-campus activities, so this final rule is meant to
clarify any questions about eligibility so the funds can be disbursed
in a timely manner.
As detailed in the preamble of this IFR, in light of the current
national emergency and the importance of institutions distributing the
HEERF allocations via emergency financial aid grants to students to
help with their expenses related to the disruption of campus operations
due to COVID-19, the normal rulemaking process would be impracticable
and contrary to the public interest. With the definition of ``student''
in ``emergency financial aid grants to students'' uncertain,
institutions may be reluctant to award the full allocation for grants
to students in time to assist with the COVID-19 related expenses the
funds are intended to alleviate.
Costs, Benefits, and Transfers
The emergency financial aid grants under section 18004 of the CARES
Act are intended to assist eligible students with expenses related to
the disruption of campus activities. In accordance with OMB Circular A-
4, we are evaluating the costs and benefits of the IFR compared to a
pre-statutory baseline. This IFR defines which students are eligible
for the grants but does not change the amount available or the
allocation formula for providing the funds to institutions. The amount
of transfers available to eligible students in 2020 is a minimum of
$6.25 billion and up to $12.5 billion, depending on the amount
institutions retain for institutional expenses. We have not discounted
or annualized this amount because it is meant to be disbursed to
students as efficiently as possible in the current year.
As described in this preamble, the eligibility requirements
clarified in this final rule allow students to know if they are
eligible to receive such funds from their institution. Limiting
eligibility to title IV-eligible students who were enrolled and making
P SAP in on-campus programs during the time of coronavirus-related
disruptions to campus operations should allow the grants to be targeted
for the purpose they were established. By aligning requirements with
title-IV eligibility,\7\ those individuals who do not meet one or more
of the title IV eligibility requirements will be unable to receive
HEERF grants.
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\7\ An exhaustive list of student eligibility requirements can
be found in Section 484 of the Higher Education Act of 1965, as
amended [20 U.S.C. 1091]. They are as follows (1) enroll or be
accepted for enrollment in a program leading to a recognized
credential at an eligible IHE and not enrolled in elementary or
secondary school (2) if presently enrolled, be maintaining
satisfactory academic progress (3) not owe a refund on a Federal
student grant or be in default on any Federal student loan (4)
submit a Statement of Educational Purpose (5) are a U.S. citizen,
National or eligible noncitizen (6) not have been convicted of, or
plead nolo contendere or guilty to, a crime involving fraud in
obtaining federal student aid (7) have a high school diploma or its
equivalent (8) have a valid social security number (9) register with
the Selective Service (if required) (10) not been convicted of any
offense under any Federal or State law involving the possession or
sale of a controlled substance for conduct that occurred during a
period of enrollment for which the student was receiving Federal
student aid. For more information visit: https://uscode.house.gov/view.xhtml?req=(title:20%20section:1091%20edition:prelim) and here
https://ifap.ed.gov/federal-student-aid-handbook/08-05-2019-2019-2020-federal-student-aid-handbook-student-eligibility.
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As institutions will determine how they will distribute funds to
their
[[Page 36500]]
students, the Department does not know the exact distribution of who
will receive the grants. Table 1 shows the estimated pool of potential
recipients as derived from IPEDS data for institutions that received an
allocation. It is not specific to Spring 2020 enrollment but does
provide an indication of the number of students who could receive
funds. The primary eligibility limitations reflected in the table are
the exclusion of non-resident aliens and the use of the percent of
students whose programs were exclusively through distance education to
estimate eligible on-campus enrollment.
Table 1--Estimated Potential Grant Recipients by Control of Institution
----------------------------------------------------------------------------------------------------------------
Public Private Proprietary Total
----------------------------------------------------------------------------------------------------------------
Total Enrollment \8\................ 18,527,813 4,778,403 1,053,455 24,359,671
Undergraduate................... 16,872,158 3,208,336 916,722 20,997,216
Graduate........................ 1,655,655 1,570,067 136,733 3,362,455
Non-Resident Alien.................. 692,123 408,696 25,903 1,126,722
Percent All-Distance \9\............ 11.40 19.20 59.90
Estimated Potentially Eligible On- 15,802,421 3,530,723 412,048 19,745,193
Campus Enrollment..................
----------------------------------------------------------------------------------------------------------------
It will be easier for students who have successfully completed a
FAFSA and received a valid student aid report (SAR) or institutional
student information record (ISIR) for the 2019-20 or 2020-21 award
years to receive an emergency financial aid grant because they have
already demonstrated their eligibility under title IV. While some
students may choose not to fill out a FAFSA because they have other
sources of funding for their education, others may lack the necessary
information or familiarity with the financial aid process to have
information in place already. A number of studies have examined the
issue of barriers to FAFSA completion including complexity and lack of
counseling. These barriers are particularly challenging for low-income,
minority, and first-generation students.\10\ Another limitation that
will restrict title IV eligible students' access to the emergency
financial aid grants is their program's participation in title IV aid.
Some programs at title-IV eligible institutions, primarily shorter
training courses such as first responder training certificate programs,
do not participate. Students enrolled in such programs will not be
eligible for the emergency financial aid grants. Students who choose
not to fill out a FAFSA but otherwise meet the title IV eligibility
criteria may verify their eligibility by completing an application
designed by the institution in which the student attests under the
penalty of perjury to meeting the requirements of section 484 of the
HEA.
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\8\ Analysis of IPEDS 2017-18 12-month enrollment file, effy2018
available at https://nces.ed.gov/ipeds/datacenter/DataFiles.aspx?goToReportId=7.
\9\ National Center for Education Statistics, Digest of
Education Statistics 2019, Table 311.15. Number and percentage of
students enrolled in degree-granting postsecondary institutions, by
distance education participation, location of student, level of
enrollment, and control and level of institution: Fall 2017 and Fall
2018. Fall 2017 share of students taking exclusively distance
education courses. Available at https://nces.ed.gov/programs/digest/d19/tables/dt19_311.15.asp.
\10\ Owen, Laura and Westlund, Erik (2016) ``Increasing College
Opportunity: School Counselors and FAFSA Completion,'' Journal of
College Access: Vol. 2: Iss. 1, Article 3. Available at: https://scholarworks.wmich.edu/jca/vol2/iss1/3. Literature review discusses
barriers and interventions.
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In developing this IFR, the Department considered waiving some
title IV eligibility requirements related to drug offenses, fraud
related to title IV funds, or default. Ultimately, it was determined
that eliminating some eligibility criteria and not others would not be
fair across groups of students and would not allow institutions to
maximize the use of their existing eligibility confirmation processes.
It is unclear how institutions will interpret the language of the
CARES Act as they continue distributing emergency financial aid grants
to students in the absence of the clarification contained in this rule.
Some institutions may choose to continue to follow the guidance the
Department has already issued on this subject, while others may adopt
their own broader definition of ``student.'' At a minimum, the
Department has already brought to the attention of institutions that
the restrictions in 8 U.S.C. 1611 apply with regard to the distribution
of grants to non-qualifying aliens as defined therein, so those
individuals would not qualify for such grants under any interpretation
of ``students.'' On the other hand, within the boundaries established
by the terms of the CARES Act and other applicable statutes,
institutions have discretion in distributing emergency financial aid
grants to students, so even if an institution decided to use a broad
definition of ``students'' in the absence of this rule, the institution
might not exercise its discretion to award grants to everyone who meets
that broader definition. It is therefore difficult to estimate with any
degree of certainty how institutions would use their HEERF allocations
differently for distribution of emergency financial aid grants to
students in the absence of this rule.
Students will benefit from assistance in paying additional expenses
associated with elements included in their cost of attendance, such as
room and board, that changed with the disruption of campus activities.
As confirmed by the Internal Revenue Service, the relief provided under
section 18004 of the CARES Act will not be considered gross income, so
students have no Federal tax consequences to deter them from accepting
this assistance. Students will have to work with their institutions to
access the funds according to whatever process the institution
establishes to award the relief. As described in the Paperwork
Reduction Act section of this preamble, students are expected to take
263,138 hours for a total of $4.71 million at a wage rate of $17.89
\11\ to apply for emergency relief in 2020.
---------------------------------------------------------------------------
\11\ Students' hourly rate estimated using Bureau of Labor
Statistics (BLS) for Sales and Related Workers, All Other, available
at: https://data.bls.gov/cgi-bin/print.pl/oes/current/oes_nat.htm.
Last accessed May 20, 2020.
---------------------------------------------------------------------------
Institutions are also affected by this final rule. They have some
flexibility in determining how they will distribute the funds they were
allocated for this emergency relief. They will incur some costs in
setting criteria or establishing an application process for their
students. We assume the distribution of the funds can largely rely on
existing processes and information involved in the disbursement of
other title IV aid, but there will be some burden in confirming
students' eligibility for the emergency relief, including for students
who do not have an existing valid SAR or ISIR for the 2019-20 or 2020-
21 award years. This could involve developing an application that
includes student attestation under the penalty of
[[Page 36501]]
perjury to meeting the requirements of section 484 of the HEA. For
students who knowingly misrepresent the truth in their attestation, the
school may take disciplinary action against the student or require
repayment of the emergency grant. As described in the Paperwork
Reduction Act section of this preamble, burden on institutions is
estimated to increase by 25,680 hours and $1,177,941 at a wage rate of
$45.87 for postsecondary education administrators \12\ in 2020.
---------------------------------------------------------------------------
\12\ Based on BLS 2019 median hourly wage rate for postsecondary
education administrators in the BLS Occupational Outlook Handbook.
Available at www.bls.gov/ooh/management/postsecondary-education-administrators.htm. Last accessed May 20, 2020.
---------------------------------------------------------------------------
To the extent that students use their emergency financial aid
grants for expenses related to elements of their cost of attendance
provided by institutions, those institutions will receive some revenue
students may otherwise have been unable to pay at this time. Table 2
summarizes the amounts to be allocated to institutions by sector. The
full breakout of amounts allocated to individual institutions,
including the maximum that can be allocated to institutional costs, is
available in the Allocations for section 18004(a)(1) of the CARES Act
document \13\ on the Department's CARES Act website.\14\ These
allocations were made according to the formula described in the
Methodology for Calculating Allocations document \15\ on the
Department's CARES Act website. The allocation formula emphasizes
institutions' share of Pell Grant recipients with 75 percent of the
allocation based on each IHE's share of full-time equivalent (FTE)
enrollment of Pell Grant recipients who were not enrolled exclusively
in distance education prior to the coronavirus emergency, relative to
the share of such individuals in all institutions. The remaining 25
percent is based on the institution's share of FTE enrollment of
students who were not Pell Grant recipients and who were not enrolled
exclusively in distance education prior to the coronavirus emergency.
This formula helps direct relief to institutions that serve lower
income students as part of their on-campus operations.
---------------------------------------------------------------------------
\13\ Available at www2.ed.gov/about/offices/list/ope/allocationstableinstitutionalportion.pdf.
\14\ www2.ed.gov/about/offices/list/ope/caresact.html.
\15\ Available at www2.ed.gov/about/offices/list/ope/heerf90percentformulaallocationexplanation.pdf.
Table 2--Summary of HEERF Allocations
------------------------------------------------------------------------
Sum of minimum
allocation to be
Sum of total awarded for
Row labels allocation emergency financial
aid grants to
students
------------------------------------------------------------------------
Private Non-Profit <2 Yrs... 11,121,217 5,560,619
Private Non-Profit 2-3 Yrs.. 31,469,853 15,734,951
Private Non-Profit 4 Yrs or 2,441,436,384 1,220,718,556
More.......................
Proprietary <2 Yrs.......... 314,169,982 157,085,261
Proprietary 2-3 Yrs......... 415,718,070 207,859,135
Proprietary 4 Yrs or More... 388,802,168 194,401,134
Public <2 Yrs............... 40,318,527 20,159,318
Public 2-3 Yrs.............. 2,655,311,849 1,327,656,148
Public 4 Yrs or More........ 6,208,906,453 3,104,453,411
-------------------------------------------
Grand Total............. 12,507,254,503 6,253,628,533
------------------------------------------------------------------------
Net Budget Impact
We estimate that the definition of student eligibility for the
emergency financial aid grants to students will not have an impact on
the Federal budget. The CARES Act provided a maximum of $12.5 billion,
with a minimum of $6.25 billion required to be spent on emergency
financial aid grants to students and not spent on institutional
expenses. The final rule does not impact the Federal budget because it
clarifies which students are eligible to receive emergency relief
provided by the CARES Act but do not change the amount available for
such grants. As described in the Costs, Benefits, and Transfers section
related to institutions, allocations have been determined and $11.1
billion of the funding has been disbursed to institutions already, with
$50 million held in reserve to account for data limitations in
allocating the initial amounts to eligible institutions. We anticipate
that $12.5 billion will ultimately be disbursed in 2020, and therefore
estimate $12.5 billion in transfers in 2020 relative to a pre-statutory
baseline.
Accounting Statement
As required by OMB Circular A-4 (available at www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a-4.pdf), in the
following table we have prepared an accounting statement showing the
classification of the impacts associated with the provisions of these
final regulations in 2020, using 3% and 7% discount rates. This table
provides our best estimate of the changes in monetized transfers in
2020 as a result of these final regulations. We note that transfers
below flow from the Federal Government to eligible students and are
processed through institutions.
[[Page 36502]]
Table 3--Accounting Statement: Classification of Estimated Impacts in
2020
[In millions]
------------------------------------------------------------------------
------------------------------------------------------------------------
Category Benefits
------------------------------------------------------------------------
Assistance may support students
continuing in their programs........... Not Quantified
------------------------------------------------------------------------
Costs
------------------------------------------------------------------------
Paperwork burden on institutions to 7% 3%
administer funds and on students to $5.9 $5.9
apply..................................
------------------------------------------------------------------------
Category................................ Transfers
------------------------------------------------------------------------
Relief for eligible students and 7% 3%
institutions to help with additional $12,500 $12,500
expenses due to disruption of campus
activities.............................
------------------------------------------------------------------------
Regulatory Flexibility Act Certification
The Regulatory Flexibility Act does not apply to this rulemaking
because there is good cause to waive notice and comment under the
Administrative Procedure Act (5 U.S.C. 553).
The Secretary certifies that this final rule will not have a
significant economic impact on a substantial number of small entities.
The U.S. Small Business Administration Size Standards define ``small
entities'' as for-profit or nonprofit institutions with total annual
revenue below $7,000,000 or, if they are institutions controlled by
small governmental jurisdictions (that are comprised of cities,
counties, towns, townships, villages, school districts, or special
districts), with a population of less than 50,000.
However, as noted in several of the Department's recent
regulations, we believe that an enrollment-based standard for small
entity status is more applicable to institutions of higher education.
The Department recently proposed a size classification based on
enrollment using IPEDS data that established the percentage of
institutions in various sectors considered to be small entities, as
shown in Table 4. We described this size classification in the NPRM
published in the Federal Register on July 31, 2018 for the proposed
borrower defense rule (83 FR 37242, 37302). The Department discussed
the proposed standard with the Chief Counsel for Advocacy of the Small
Business Administration, and while no change has been finalized, the
Department continues to believe this approach better reflects a common
basis for determining size categories that is linked to the provision
of educational services.
Table 4--Small Entities Under Enrollment Based Definition
----------------------------------------------------------------------------------------------------------------
Level Type Small Total Percent
----------------------------------------------------------------------------------------------------------------
2-year................................ Public.................. 342 1,240 28
2-year................................ Private................. 219 259 85
2-year................................ Proprietary............. 2,147 2,463 87
4-year................................ Public.................. 64 759 8
4-year................................ Private................. 799 1,672 48
4-year................................ Proprietary............. 425 558 76
-------------------------------------------------------------------------
Total............................. ........................ 3,996 6,951 57
----------------------------------------------------------------------------------------------------------------
This rule will benefit those institutions of higher education that
are small entities by allowing them to use a familiar existing
eligibility framework to determine who should receive emergency
financial aid grants under HEERF. As described in the Regulatory Impact
Analysis, institutions may benefit from applying no more than 50
percent of their allocation of HEERF funds to institutional costs, so
some small entities will benefit from those revenues. They will also
have to establish a process for determining which of their students
should receive and disburse the funds accordingly. We expect that the
2,586 estimated small entities allocated funds for this purpose under
the CARES Act will spend a total of 5,172 hours totaling $237,240 at a
wage rate of $45.87 \11\ for postsecondary administrators to administer
the distribution of the relief.
Table 5 shows the allocations of funds to small entities by sector,
with any institution for which there was no small business indicator
available considered a small entity. As for all institutions, the
allocations of funds to specific small institutions is available on the
Department's CARES website.\12\
Table 5--Summary of Allocations to Small Entities by Sector
------------------------------------------------------------------------
Sum of minimum
allocation to be
awarded for
Sector Sum of total emergency
allocation financial aid
grants to
students
------------------------------------------------------------------------
Private Non-Profit <2 Yrs......... 8,274,977 4,137,498
Private Non-Profit 2-3 Yrs........ 20,417,294 10,208,669
[[Page 36503]]
Private Non-Profit 4 Yrs or More.. 266,608,121 133,304,213
Proprietary <2 Yrs................ 239,330,457 119,665,488
Proprietary 2-3 Yrs............... 177,306,399 88,653,273
Proprietary 4 Yrs or More......... 84,269,294 42,134,681
Public <2 Yrs..................... 29,196,455 14,598,279
Public 2-3 Yrs.................... 28,278,395 14,139,221
Public 4 Yrs or More.............. 56,909,101 28,454,561
-------------------------------------
Grand Total................... 910,590,493 455,295,883
------------------------------------------------------------------------
As institutions control the distribution of the funds to eligible
students and have flexibility to establish a process suitable to their
circumstances, no alternatives were considered specifically for small
entities.
Paperwork Reduction Act of 1995
As part of its continuing effort to reduce paperwork and respondent
burden, the Department provides the general public and Federal agencies
with an opportunity to comment on proposed and continuing collections
of information, in accordance with the Paperwork Reduction Act of 1995
(PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that: The public
understands the Department's collection instructions, respondents can
provide the requested data in the desired format, reporting burden
(time and financial resources) is minimized, collection instruments are
clearly understood, and the Department can properly assess the impact
of collection requirements on respondents.
In determining eligibility for these funds, IHEs are being directed
to use the Department's interpretation of ``student,'' meaning a person
who is eligible under section 484 of the HEA to receive title IV aid,
as suggested by the references to title IV in the context of section
18004.
We believe that most institutions will expand their current
financial aid appeals process and utilize that framework to receive
requests for COVID-19 assistance from eligible students. We estimate
that each institution that received an allocation would require five
hours to set up any new form for students to complete and establish
review and recordkeeping procedures to be able to comply with the
separate reporting requirements in the Certification and Agreement
between the institutions and the Secretary. The estimated burden for
the 1,651 private institutions is 8,255 hours (1,651 x 5 hours). The
estimated burden for the 1,641 proprietary institutions is 8,205 hours
(1,641 x 5 hours). The estimated burden for the 1,844 public
institutions is 9,220 (1,844 x 5 hours). The total new burden to all
institutions receiving an allocation of funds is 25,680 hours (5,136
institutions x 5 hours).
Using the unique number of title IV aid recipients 10,319,154 (both
Federal grant and Federal student loan) for the Award Year 2019-2020 we
estimate that 15 percent, or 1,547,873, of those recipients will
request additional aid from their institution based on changed
circumstances due to the coronavirus. We estimate approximately 20
minutes per students to complete the request for additional aid for a
total new burden of 510,798 hours (.33 hours x 1,547,873).
This is a new information collection with a total burden assessment
of 536,478 hours for 1,553,009 respondents with a single response. The
Department has requested an emergency clearance to allow for the
immediate collection of this information. The public will be provided
the ability to comment on the proposed burden assessment through the
standard information collection process with notice requesting comment
being published in the Federal Register.
1840-NEW--Eligibility of Students at Institutions of Higher Education for Funds Under the CARES Act
----------------------------------------------------------------------------------------------------------------
Estimate costs
Number of Number of Hours per student $17.89
Affected entity respondents responses response Total burden institutions
$45.87
----------------------------------------------------------------------------------------------------------------
Individual Student.............. 1,547,873 1,547,873 .33 510,798 $9,138,176
Private Institution............. 1,651 1,651 5 8,255 378,657
Proprietary Institution......... 1,641 1,641 5 8,205 376,363
Public Institution.............. 1,844 1,844 5 9,220 422,921
-------------------------------------------------------------------------------
Total....................... 1,553,009 1,553,009 .............. 536,478 10,316,117
----------------------------------------------------------------------------------------------------------------
Intergovernmental Review: This program is subject to Executive
Order 12372 and the regulations in 34 CFR part 79. One of the
objectives of the Executive order is to foster an intergovernmental
partnership and a strengthened federalism. The Executive order relies
on processes developed by State and local governments for coordination
and review of proposed Federal financial assistance.
This document provides early notification of our specific plans and
actions for this program.
[[Page 36504]]
Federalism
Executive Order 13132 requires us to ensure meaningful and timely
input by State and local elected officials in the development of
regulatory policies that have federalism implications. ``Federalism
implications'' means substantial direct effects on the States, on the
relationship between the National Government and the States, or on the
distribution of power and responsibilities among the various levels of
government. This interim final regulation may have federalism
implications. We encourage State and local elected officials to review
and provide comments on this interim final regulation.
Accessible Format: Individuals with disabilities can obtain this
document in an accessible format (e.g., braille, large print,
audiotape, or compact disc) on request to the person listed under FOR
FURTHER INFORMATION CONTACT.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. You may
access the official edition of the Federal Register and the Code of
Federal Regulations at www.govinfo.gov. At this site you can view this
document, as well as all other documents of this Department published
in the Federal Register, in text or portable document format PDF. To
use PDF, you must have Adobe Acrobat Reader, which is available for
free on the site.
You may also access documents of the Department published in the
Federal Register by using the article search feature at
www.federalregister.gov. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
List of Subjects in 34 CFR Part 668
Administrative practice and procedure, Aliens, Colleges and
universities, Consumer protection, Grant programs--education, Loan
programs--education, Reporting and recordkeeping requirements,
Selective Service System, Student aid, Vocational education.
Betsy DeVos,
Secretary of Education.
For the reasons discussed in the preamble, the Secretary amends
title 34 of the Code of Federal Regulations as follows:
PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
0
1. The authority citation for part 668 continues to read as follows:
Authority: 20 U.S.C. 1001-1003, 1070a, 1070g, 1085, 1087b,
1087d, 1087e, 1088, 1091, 1092, 1094, 1099c, and 1099c-1, 1221e-3,
and 3474; Pub. L. 111-256, 124 Stat. 2643; unless otherwise noted.
0
2. Section 668.2 is amended by adding the definition ``Student,'' in
alphabetical order to read as follows:
Sec. 668.2 General definitions.
* * * * *
Student, for purposes of the phrases ``grants to students'' and
``emergency financial aid grants to students'' in sections 18004(a)(2),
(a)(3), and (c) of the Coronavirus Aid, Relief, and Economic Security
(CARES) Act, is defined as an individual who is, or could be, eligible
under section 484 of the HEA, to participate in programs under title IV
of the HEA.
(Authority: 20 U.S.C. 1221e-3 3474)
* * * * *
[FR Doc. 2020-12965 Filed 6-15-20; 4:15 pm]
BILLING CODE 4000-01-P
