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Guidance Issued on Title IV Aid for Gulf Coast Students

December 14, 2005

New guidance from the Department of Education addresses two issues relating to Title IV aid eligibility for students affected by Hurricanes Katrina and Rita. The first issue concerns displaced students who transferred to another institution but were not admitted as regular students. The Department of Education allowed host institutions to award federal student aid to visiting students for the fall semester, but that authority expires December 31. The other issue relates to annual and aggregate loan limits for students who were displaced by the hurricanes.

Regular Students

The department provided guidance in early September that allowed institutions to award federal student aid to displaced students who transferred to other colleges after Hurricane Katrina even if those individuals were not matriculated as regular students. This dispensation expires at the end of December. The December 1announcement generally upholds the December 31 deadline, meaning that host institutions will not be able to award federal student aid to visiting students from Gulf Coast institutions except in special circumstances. The exceptions are if the student's home institution does not reopen in January 2006 or reopens but does not offer the student's educational program. Host institutions may rely on information received from the student's home institution either generally (from its Web site) or specifically in relation to a particular student.

Displaced students who choose to remain at a host institution will otherwise only be eligible for federal student aid for spring semester if the host institution admits the student as a regular student or enters into a consortium agreement with the student's home institution. An attachment to the announcement includes a list of affected institutions with contact information.

Loan Limits

The other topic addressed in the December 1 announcement is annual and aggregate loan limits for students who received student loan funds from their original home institution initially this fall and then received subsequent disbursements from a host institution. Even though annual loan limits are set by law, the Department of Education is authorizing institutions and lenders to permit subsequent disbursements of aid without considering amounts that were disbursed for attendance in the fall at institutions on the list of affected institutions. (Legislation pending in Congress may discount [forgive] those disbursements.) 

The department also reminds institutions not listed in the attachment that they must process any student withdrawals under the normal rules governing return of Title IV funds, even for students who withdrew for disaster-related reasons. Earlier guidance provided that students would not have to return their share of grant repayments, but rules for institutions were not changed. (Affected institutions should not take any action at this time to return Title IV funds.)