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Publication Date: November, 2005

Posted on 11-04-2005

HURRICANE RITA ELECTRONIC ANNOUNCEMENT #5


From: Terri Shaw, Chief Operating Officer, Federal Student Aid

Subject: Reallocation of Campus-Based Funds

Date: November 4, 2005


On Monday, November 7, we expect to publish in the Federal Register a Notice that provides information on the campus-based funds reallocation process for institutions that have enrolled students who have been affected by Hurricanes Katrina and Rita. The Notice provides background information on the reallocation process, definitions of terms, and the information that an institution must submit in its application for reallocated campus-based funds. While a summary of that information is included in this letter, institutions are urged to review the full Federal Register Notice, which will be posted on our IFAP website when it is published.

Background

The Natural Disaster Student Aid Fairness Act (Aid Fairness Act), Public Law 109-86, signed by the President on October 7, 2005, provides, in part, that the Secretary must reallocate to certain eligible institutions any unexpended 2004-2005 campus-based funds for the 2005-2006 award year. An institution is eligible to be considered for reallocated campus-based funds if it participates in one or more of the campus-based programs and is located in an area affected by either Hurricane Katrina or Hurricane Rita or has accepted for enrollment any hurricane affected students, as defined in the Aid Fairness Act.

In this letter we are addressing only the reallocation of campus-based funds to institutions, including those located in a hurricane affected area, that enrolled affected students for all or a portion of the 2005-2006 academic year. Through a separate process, we will be reallocating campus-based funds to institutions that are located in an area affected by a Gulf hurricane disaster, including those that applied for reallocated funds under this process.

Procedures for Reallocation of Campus-Based Funds

Institutions that participate in at least one of the campus-based programs and wish to apply for reallocated campus-based funds must print a copy of the Reallocation Request Form, provided as an attachment to this announcement, provide the requested information, and submit the Reallocation Request Form no later than November 28, 2005, via FAX to (202) 275-5522. Only one request form is required from institutions that enrolled affected students from both hurricanes.

The information that an institution must provide on the Reallocation Request Form is:

Institutions should carefully consider the time and effort required to collect and maintain the required information when compared to the amount of reallocated funds that they will likely receive. Institutions that enrolled fewer than 20 affected students will likely receive only minimal funding under the reallocation process.

Definitions

Affected Student: Under the Aid Fairness Act, an affected student for purposes of the reallocation of campus-based funds, is an individual who has applied for, or received, Title IV student financial assistance, and who -

(1) Was enrolled or accepted for enrollment, as of August 29, 2005, at an institution located in an area affected by a Gulf hurricane disaster;

(2) Was a dependent student enrolled or accepted for enrollment at an institution that is not in an area affected by a Gulf hurricane disaster, but whose parents resided or were employed, as of August 29, 2005, in an area affected by a Gulf hurricane disaster; or

(3) Suffered direct economic hardship as a direct result of a Gulf hurricane disaster.

Direct Economic Hardship: For purposes of this reallocation, the Secretary considers a student to have suffered direct economic hardship as a direct result of a Gulf hurricane disaster if the student (or if a dependent student, the student's parents) lost a domicile, income, or other means of support as a result of a Gulf hurricane disaster.

Area Affected by a Gulf Hurricane Disaster: For purposes of this reallocation, an area affected by a Gulf hurricane disaster is any county in Alabama, Mississippi, and Texas or any parish in Louisiana declared by FEMA as a Major Disaster Area designated for "Individual Assistance" because of the impact of Hurricane Katrina or Hurricane Rita.

A listing of the counties and parishes impacted by Hurricane Katrina is posted to our IFAP website at http://ifap.ed.gov/eannouncements/katrinaDA.html.

A listing of the counties and parishes impacted by Hurricane Rita is posted to our IFAP website at http://ifap.ed.gov/eannouncements/ritaDA.html.

Use of Reallocated Campus-Based Funds

Reallocated funds do not have to be used directly for affected students, but must be used to make campus-based awards to eligible students or for other statutorily allowed purposes. Any reallocated funds must be included in the total program funds used for the purpose of calculating carry-forward amounts, carry-back amounts, Job Location and Development amounts, and campus-based administrative cost allowances.

Statutory and Regulatory Waivers

The Aid Fairness Act authorizes the Secretary to waive or modify certain statutory or regulatory requirements pertaining to the reallocated campus-based funds. Under that authority the Secretary has determined that -

(1) Institutions are not required to provide a non-Federal share or capital contribution, as applicable, to match the reallocated campus-based funds.

(2) Institutions may transfer up to 100 percent of the reallocated funds it receives under any of the programs to either the FSEOG or FWS program, provided that the institution participates in the program(s) to which the funds are transferred. However, an institution may not transfer any of its reallocated FSEOG or FWS funds to its Perkins Loan Program.

(3) Institutions are not required to use any of its reallocated FWS funds for community service purposes.

(4) Institutions are not required to use the amount of any reallocated FWS funds in calculating the seven percent community service provision.

Documentation

An institution that requests funds under this reallocation process must maintain documentation supporting its request, including information that documents how each student included in its request meets the definition of an affected student. Such documentation includes, but is not limited to the following:

Institutions are reminded that they are responsible for accounting properly for any funds received and expended under the Title IV, HEA programs, including any campus-based funds received as a result of this reallocation or any other funds received because of a hurricane related statutory, regulatory, or administrative provision. Each institution that receives such funds is alerted that the Department may request a separate accounting or report of its use of those funds.

If you have questions concerning the reallocation of campus-based funds, please contact the Federal Student Aid, Research and Customer Care Center. Center staff are available Monday through Friday between the hours of 9:00 a.m. and 5:00 p.m. (Eastern Time) at 1-800-433-7327. After hours calls are accepted by an automated voice response system. Callers leaving their name and phone number will receive a return call the next business day. You may send an inquiry by e-mail to fsa.customer.support@ed.gov.

 

Attachments/Enclosures:

REALLOCATION REQUEST FORM FOR CAMPUS-BASED FUNDS FORTHE 2005-2006 AWARD YEAR in pdf size 1 page 33 KB

REALLOCATION REQUEST FORM FOR CAMPUS-BASED FUNDS FORTHE 2005-2006 AWARD YEAR in MS Word size 1 page 22 KB