What Higher Education Organizations Need to Do in the Wake of COVID-19

April 20, 2020 | Article

The COVID-19 pandemic has impacted a variety of organizations and businesses. One of those industries uniquely hit is higher education institutions. With school closures, shortened study abroad programs and canceled student activities, higher education institutions must navigate a new normal.

Below are common questions we’ve received surrounding how to continue operations in the wake of COVID-19.

There’s much to consider when it comes to the impact of COVID-19.

What guidance has been released by the Department of Education?
The  Department of Education has released a Frequently Asked Questions memo which includes:

  • Cost of Attendance. The department will not require a re-evaluation of the cost of attendance if the student has moved from campus as a result of the COVID-19 outbreak.
  • Student Leave of Absence. Students will be approved for a leave of absence for COVID-19-related matters, even if the student notifies the institution in writing after the leave of absence has begun. In such cases, the institution may retain the Title IV funds for that student to apply once the student resumes enrollment.
  • Professional Judgment. Financial aid administrators have statutory authority to use professional judgement to make adjustments on a case-by-case basis to the cost of attendance or to the Expected Family Contribution (EFC) to reflect a student’s special circumstances. In making professional judgment determinations, the institution must obtain and retain documentation in each student’s file. This documentation must substantiate the reason for any adjustment. Additionally, these administrators must report to the Central Processing System (CPS) as a “correction” transaction and with the “PJ” indicator any professional judgment decisions that affect a student’s eligibility for a Federal Pell Grant.
  • Credit Balances. Institutions are encouraged to stay aware of any refunds or changes to the students’ bursar accounts could create credit balances which are currently not subject to relaxed compliance requirements as a result of the qualifying emergency.
  • Overlapping Terms. Due to the COVID-19 pandemic, the department is permitting flexibility to schedules that would otherwise be nonterm as well, such as an extended spring term that will overlap with a summer term. If an institution extends the length of a term to respond to the qualifying emergency and causes the term to overlap a subsequent term, the institution may continue to consider its terms to be standard terms.
  • Institutional Charges, Refunds, and R2T4 Calculations. It has been noted that the department is currently reviewing the implications of the CARES Act to provide appropriate guidance.
  • Academic Year. If an institution offering credit-hour programs is unable to offer at least 30 weeks of instruction during its academic year due to COVID-19 disruptions, it may request a reduction from the department. If the institution determines it will temporarily cease providing instruction or extend the spring break as a result of the COVID-19 pandemic that results in fewer than 30 weeks of instruction in the academic year, the institution should send an email to CaseTeams@ed.gov to request a temporary reduction from the department in the length of its academic year.
  • Cash Management. If an institution cannot comply with cash management regulations due to the COVID-19 pandemic, they should document and retain the reasons for being unable to comply.
  • Final Federal Reporting Deadlines. Upon an institution’s request via the Common Origination and Disbursement (COD) website, the department may extend the deadline for reporting final Federal Pell Grant payments if the institution is unable to meet the published deadline. An affected institution should make the request as soon as possible.
  • Federal Perkins Loan Program. The department authorizes institutions to grant forbearance, for a period not to exceed three months, to a Federal Perkins Loan borrower who is in repayment and who is unable to make payments due to the COVID-19 pandemic.

    For an institutionally held Perkins Loan, interest accrues during any period of forbearance. A borrower may request this forbearance and is not required to submit documentation to be considered eligible for this forbearance. An institution must document the forbearance in the borrower’s file.

Compliance Related Issues
How do I ensure grant compliance through all of this?
The Office of Management and Budget (OMB) has issued two memos, M-20-11 and M-20-17, to address several key areas and to provide a directive to federal agencies. The items discussed in these memos are not an automatic exception to non-federal entities and institutions should reach out to their cognizant agency or grantor for appropriate exemptions.

Cybersecurity Issues
How do we ensure secure connectivity and data transfer for students and faculty when moving to online classes?
Many higher education institutions already had the ability to conduct online classes, but with the shift to all classes being online, many students and faculty are utilizing technology they may not be familiar with. Providing the resources and education on utilizing those resources is essential to ensure data is contained within approved resources. Faculty should be reminded that using non-approved online services like free file sharing sites is not allowed.

How do we ensure our faculty and staff are appropriately trained on how to be secure when working offsite?
As many faculty and staff transition to working from home providing training to those users is critical. The training could include topics like how to securely connect to the institution’s resources and securing your home network. It is also a good time to remind faculty and staff of acceptable use policies, and other policies that might be relevant including bring your own device (BYOD) or password management.

Can we help our remote faculty and staff operate more efficiently?
As faculty and staff are now working remotely, inefficiencies are being identified in various business processes. Things that did not seem inefficient when people were in the same office, across the hall, or a few buildings away on campus, are now taking longer to finish.

Data is delayed getting into your business systems as people wait for approvals sometimes passing invoices or spreadsheets around via email for review. In some cases, the faculty and staff are no longer available or are not available as frequently as they care for their children, the elderly, or even volunteer with foodbanks and supporting medical facilities.

Now is a good time to streamline inefficient processes, automate manual processes and spreadsheets, and more fully utilize the business systems and technology tools available. Challenge your remote workers to identify three processes that are time consuming, more difficult now that they are remote, or are day-to-day tasks that require input from multiple people. Suggest a collaborative working session to identify creative solutions to these challenges. This can improve efficiencies and your staff experience as well as provide a positive team activity to keep morale high.

Should we still try to implement our new business system or put it on hold until we are all back in the office?
While we are typically more comfortable with face-to-face meetings and training sessions when implementing new software, implementing new functionality, or business process changes across the  department, there are very effective ways to utilize technology to accomplish your project objectives.

Now might be a really good time to get these projects completed as some of your implementation team’s other responsibilities may be reduced. Your technology providers are actively looking for ways to help you continue your implementations and training and their calendars have likely opened up a bit so that you may have the opportunity to accelerate your implementations. Reach out to those providers to see what options they have available for you that may allow your faculty and staff to continue and potentially accelerate your critical project implementations.

Budgeting and Cost Containment
How can I plan for expected budget reductions?
Proactively review your current processes and use of technology to determine what efficiencies can be gained with automation of manual processes and better use of the business systems that are available. Nearly everyone will be trying to do more with less: fewer staff, less funding, more real-time data for decision making.

Consider the following:

  • How can you eliminate wasteful processes?
  • How can you automate manual activities and identify reporting coming from your systems versus spreadsheets?
  • How can you cross-train staff to perform multiple functions?
  • How can you ensure internal controls?
  • How do we utilize the reports and data we provide? Who uses this report? What value does the information provide? Can we do this in a different way?

By proactively identifying areas for efficiency and ways to eliminate time being wasted, you will be able to plan for any necessary budget reductions in your area.

International Employment
The university employs foreign persons and those persons sometimes work outside the U.S. Are their wages still subject to U.S. payroll tax?
It depends. Wages earned by nonresident aliens for services performed outside of the U.S. are typically exempt from U.S. taxation. A crucial component to this decision is whether the employee is considered a nonresident alien. Typically, a nonresident alien is any person who is not a U.S. citizen, not a U.S. green card holder, and does not meet the U.S. substantial presence test requirement.

Periodically the university sends U.S. employees to work abroad. Are there special tax considerations related to this arrangement?
Yes. There are several potential tax issues the university should consider, including:

  1. Is the university required to administer payroll in the foreign jurisdiction?
    1. If so, the university will likely need to register and file periodic payroll forms. Alternatively, the university could engage a PEO (Professional Employer Organization) to manage the compliance.
  2. Is the university required to administer U.S. payroll?
    1. If the university is required to administer U.S. payroll on the same wages, the university should consider whether it wants to undertake a tax reimbursement plan (such as a tax equalization or tax protection plan) to ensure the employee is no worse off from a tax perspective for working abroad versus working from the U.S.
  3. Is the university required to provide benefits in the foreign jurisdiction that customarily are not provided in the U.S. (e.g., annual training or physicals for medical purposes)?

  4. Will the employee be required to file a tax return in the foreign jurisdiction?
    1. If so, will the university reimburse the employee for this expense as well as the additional complexity on the U.S. tax return?
  5. Is the university required to register for business and/or income tax purposes in the foreign jurisdiction?

  6. Does the university create a taxable presence in the foreign jurisdiction? In other words, will its U.S. tax exempt status be respected?

Stay Up to Date on Issues Impacting Your Higher Education Institution
There is much to consider when it comes to remote working arrangements, school closures and compliance. Knowing what is going on and how it impacts your higher education institution is the first step in creating a path through this pandemic and its impact on your organization.

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