Financial Aid

New Guidance from IRS on Treatment of CARES Act Payments to Students

December 17, 2020

By Jane M. Sovern, Gail M. Norris, and Philip J. Zaccheo

On Dec. 14, 2020, the IRS added guidance to its FAQs on the Higher Education Emergency Relief Fund and Emergency Financial Aid Grants under the CARES Act, clarifying that higher education institutions are not required to report these emergency financial aid grants to students on Form 1098-T. 

Read More >> New Guidance from IRS on Treatment of CARES Act Payments to Students

Strict Reporting Requirements and Taxability Information for Emergency Financial Aid Grants to Students

May 7, 2020

By Monica C. Barrett, Jane M. Sovern, and Philip J. Zaccheo

Here are two breaking developments we do not want you to miss. On May 6, 2020, the same day the U.S. Department of Education’s Office for Civil Rights issued its sweeping Title IX Final Rule, the Department’s Office of Federal Student Aid announced that all recipients of funding from the Higher Education Emergency Relief Fund (HEERF) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act must post on their primary websites specific details about how they allocated funding for emergency grants to students. This posting must be done within 30 days of receipt of the funds from the federal government. 

Read More >> Strict Reporting Requirements and Taxability Information for Emergency Financial Aid Grants to Students

The Importance of Clarity: Institutional Website Descriptions Cause Congressman to Question Financial Aid Application Processes

February 3, 2014

By Philip J. Zaccheo

higher-ed-financial-aidSince 1992, the Higher Education Act has required colleges and universities to determine applicants’ eligibility for federal aid programs only through use of the Free Application for Federal Student Aid (FAFSA).  On February 3, 2014, Rep. Elijah Cummings, the ranking Democrat on the House Committee on Oversight and Government Reform, sent a letter to Secretary of Education Arne Duncan in which he identified 111 colleges and universities he believes to be requiring applicants to complete forms other than the FAFSA to apply for federal aid. The information set forth in the letter was gleaned from a survey of institutional websites, many of which, the letter claims, reflect the use of forms other than the FAFSA (such as the College Board’s CSS Profile) to determine eligibility for federal IV aid, or, at a minimum, provide unclear guidance to applicants as to whether additional forms are required.  In reality, the majority of institutions are likely administering programs correctly, requiring applicants to complete only the FAFSA for federal aid purposes but using other data collection tools for institutional and other non-federal aid purposes (and encouraging submission of the additional information in order to maximize accessibility).  However, institutions’ descriptive materials may not clearly reflect these compliant practices. It is not clear what, if anything, the Education Department may do in response to Rep. Cummings’ letter.  Although it appears that Rep. Cummings is suggesting only an admonishment to institutions, colleges and universities should use this opportunity to ensure that their website disclosures and other descriptive materials made available to applicants clearly identify that only the FAFSA is required for federal aid purposes (and, of course, that they are administering the application process in a corresponding manner).

Department of Education Interpretation Catches Up to the Law: Financial Aid Eligibility and Same-Sex Marriages

December 16, 2013

By John Gaal

Histdoe-logoorically, the Department of Education had interpreted all provisions of Title IV of the Higher Education Act (which authorizes federal student aid programs) consistent with Section 3 of the Defense of Marriage Act (“DOMA”), which prohibited federal agencies from recognizing same-sex marriages.  As a result of United States v. Windsor, in which the U.S. Supreme Court invalidated portions of DOMA, the Department announced this past Friday that it will now recognize a student or parent in a same sex marriage as legally married provided they were married in a jurisdiction which recognizes that marriage, and regardless of where they now reside. In a Dear Colleague letter  issued December 13, the Department indicated that this recognition applies to both a student and to the parents of a dependent student. It also applies to a student attending an institution located in a jurisdiction that recognizes same-sex marriage as well as in a jurisdiction that does not recognize same-sex marriage. However, this determination applies only to marriages and not other relationships, such as registered domestic partnerships, civil unions, or similar formal relationships recognized under state law.  This guidance will be relevant to all questions concerning marriage and marital status on the FAFSA. Additional information regarding implementation of the Department's interpretation, especially as it relates to the 2013-2104 FAFSA, is contained in the Dear Colleague letter.