Campus Based Penalty Waiver

On January 7, 2019, the U.S. Department of Education (ED) issued an announcement to remind institutions that the deadline for 2019-20 for the underuse penalty waiver for Campus-Based programs is February 4, 2019. Under the Higher Education Act, as amended (HEA), if an institution returns more than 10 percent of its Federal Supplemental Educational Opportunity Grant (FSEOG) or Federal Work-Study (FWS) allocations in a given award year, the allocation for the second succeeding award year is reduced by the dollar amount returned unless the Secretary waives this provision. An institution may submit an underuse penalty waiver request if the institution is able to explain that the underuse was due to circumstances beyond its control and why those circumstances are not expected to recur. The request and justification for the waiver of the underuse penalty must be submitted electronically by 11:59 p.m. Eastern time (ET) on February 4, 2019.

Institutions impacted by the 2017 hurricanes and/or that received 2017–18 supplemental funds due to the hurricanes do not need to submit the underuse waiver. If any such institutions return more than 10% of their 2017–18 total (original plus supplemental) FWS and/or FSEOG allocation, the institution will not receive a penalty for its 2019–20 FWS or FSEOG allocations. An institution does not have to take any action to apply for a waiver of the underuse of funds— the waiver will be granted automatically to impacted schools that received supplemental funding.

For questions regarding an underuse penalty waiver justification, contact the COD School Relations Center at 1-800-848-0978. You may also email

by McClintock & Associates, P.C.