Policy Title: Emergency Hardship Loan Fund	Category: Human Resources
Owner: Vice President for University Operations	Policy ID#: 3-6004-034
Contact: Vice President for Human Resources Web: https://hr.colostate.edu/ Email: hr_service_center@mail.colostate.edu Phone: (970) 491-6947 Also Contact: Commitment to Campus Web: https://commitmenttocampus.colostate.edu Email: c2c@colostate.edu Phone: 970-491-5257	Original Effective Date: 5/16/2014 Last Revision: 3/29/3023

POLICY OWNERS

This policy is jointly owned by the Vice President for Human Resources and the Vice President for University Operations.

PURPOSE OF THIS POLICY

Commitment to Campus (C2C) was created in 2010 to provide support to Colorado State University employees and their families and to improve both productivity and work-life balance. C2C encompasses a wide range of programs, discounts, and special benefits available to CSU employees to:

• Promote employee health, wellness, and personal advancement
• Engage employees in the life of the University;
• Connect employees and students outside the classroom;
• Enrich participation in campus programs, classes, and events;
• Reward employees for their service and involvement in the CSU community;
• Consistent with the C2C mission, and as part of its commitment to the well-being of members of the CSU community, C2C has developed the Emergency Hardship Loan Fund (EHLF) program to lend a helping hand in times of crisis to those employees most in need.

APPLICATION OF THIS POLICY

Unexpected emergencies caused by factors beyond an employee’s control often can impose a tremendous financial burden. Many employees are unable to handle the financial impact of a medical emergency, weather-related disaster, or other unexpected need or loss. They may have little or no savings to draw upon, and few if any other resources (such as extended family) to aid in the form of short-term loans, even in modest amounts.

An emergency assistance program offering loans with little, or no interest is consistent with the CSU mission and its role as a fiscally responsible employer that seeks to improve the lives of its employees and maintain their productivity. Its objective is to make funds available to these employees without adding to their financial burden at the time they most need help. Other short-term, low-credit loans (such as so-called “payday loans”) can create more hardships due to their high interest rates and potential to injure the borrower’s credit score. EHLF loans will not pose these risks if the loan is repaid as agreed and does not have to be sent to outside collections.

Emergency Hardship Loan Fund (EHLF) loans will be made available to CSU employees experiencing a financial crisis only when there is a reasonable expectation of repayment within 18 months, at most.

Loans will be limited in amount and frequency and will be repaid by payroll deduction. If an employee separates from employment before the loan is fully paid, or at any time is not receiving a paycheck (e.g., 9-month employees not being paid over the summer), the employee will be responsible to make the loan payments by remitting funds directly to Business & Financial Services. To assure that the program is fiscally responsible and prudent, with a high likelihood of full recovery of all amounts loaned, employees in hourly positions will not be eligible to apply for an emergency loan.

EXEMPTIONS FROM THIS POLICY

None. 

DEFINITIONS USED IN THIS POLICY

As used herein, the following definitions shall apply:

Eligible Employee: Academic Faculty and Administrative Professionals on regular, special, or temporary appointments of half-time or greater, Academic Faculty on continuing or contract appointments, Post-Doctoral Fellows, Veterinary Interns and Clinical Psychology Interns on appointments of half-time or greater, and State Classified salaried employees are eligible for emergency loans under this program except as provided herein. An employee is not an Eligible Employee during any period in which the employee is not in a regularly paid employment status (for example, when on leave without pay, or other such absence), and loans are not available to 9-month appointees during the summer session (unless the employee is on a contract for such session). An employee may be deemed ineligible to receive a loan if their employment is expected to terminate before the applicable repayment period is completed.

Emergency: An unforeseen event or set of circumstances that causes an Eligible Employee financial hardship, when the employee has inadequate funds from other sources that are readily available within the time needed to provide relief.

POLICY STATEMENT

The maximum loan amounts for the program defined in this policy do not exceed $1,500.  At this amount, employees should not have taxable income to report as a result of receiving a loan under this program. However, when a loan is not repaid as agreed, tax liability of the employee may ultimately result.

CSU makes the following disclaimer with respect to all loans made under this policy:

Disclaimer Regarding Tax Liabilities. CSU and its employees and agents make no representation as to the tax consequences of any payment, loan or grant made under this or any other program. If there is any tax advice contained herein, it is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed under the internal revenue code.

POLICY PROVISIONS

A.  Qualifying Loans

1. Eligible Employees may receive an Emergency Hardship loan not to exceed $1,500 when the EHLF Committee determines, based on the application materials, that the loan is reasonable and necessary to meet a 
   bonafide Emergency need. Examples of an Emergency need include:
   1. Death in the family causing financial difficulties, such as unexpected travel to attend the funeral;
   2. Being the victim of a serious crime, especially when it deprives the employee of cash, credit or access to his or her accounts;
   3. Urgent medical, dental or other healthcare treatment expenses not covered by insurance;
   4. An unforeseen, calamitous event or urgent circumstance that creates a hardship that is not caused by the employee including but not limited to ability to pay rent/mortgage.
2. Examples of non-emergency needs for which loans cannot be provided:
   1. Personal purchases or gifts for others, for example, for holidays or special occasions;
   2. Money needed to pay for a vacation or to tide the employee over during annual leave;
   3. Money needed to supplement a deficit caused by predictable bills such as income tax, auto registration or maintenance.

B.  EHLF Committee  

1. The EHLF Committee is appointed by the Vice President for Human Resources. The VPHR will designate a Chair or Co-Chairs. The committee consists of five or more voting members plus such advisory and 
   ex officio (non-voting) members as the committee may appoint from time to time.
2. The committee will include at least one representative each from the Classified Personnel Council, the Administrative Professional Council, and the Faculty Council. The committee will additionally include the CARE Coordinator and the Employee Housing Programs Coordinator.
3. The Chair and Co-Chair will serve three-year terms and may be reappointed. In the event of a resignation by the Chair or Co-Chair, the vacant position will be filled by nomination and election by the committee from the current membership. All members serve at the pleasure of the VPHR, who may make appointments to the committee at any time.
4. The committee will have the following authority and responsibilities:
   1. To review loan applications and make determinations as set forth herein. All determinations made by the EHLFC are subject to review by the VPHR, whose decision on any matter related to such loans shall be final. Only the EHLFC may request that a determination be reviewed by the VPHR.
   2. To approve an EHLF loan application in an amount not more than $1,500, when supported by documentation of the employee’s need for the amount requested, or deny an application, for reasons set forth in writing.
5. When making any determination or disposition of a loan application, the committee will make a written record of the determination. Such records are protected from disclosure under C.R.S. §§ 24-72-202(4.5) and 24-72-204(3)(a)(II) and will be maintained by the Office of the Vice President of University Operations. Business & Financial Services maintains confidential financial data within the meaning of § 24-72-204(3)(a)(IV).  

C.  Applications for Loans; Procedures 

1. The EHLF Committee shall establish procedures, to be approved by the VPHR, for employees to apply for Emergency loans from the EHLF, including a simple application form that is available online or can be obtained in person at Human Resources, and that can be submitted electronically or in writing.
2. The loan application will require the employee to provide sufficient information to establish the employee’s eligibility (as defined above), nature of the emergency need, and amount requested. The applicant must provide reasonable documentation of the nature and amount of the emergency expense or loss (such as an estimate of repairs, medical bill, or amount of a pending insurance claim).
3. An Eligible Employee may not be granted more than one emergency loan at a time. An Eligible Employee may  re-apply for a new loan, upon successful re-payment of their loan.
4. An Eligible Employee may not be awarded a loan if the required payroll deduction cannot be applied under applicable laws, e.g., when wage garnishments have reduced the amount of pay below a legal threshold amount. Human Resources will reject the loan application under such circumstances and not forward the application to the committee.
5. Loan Determinations:
   1. In considering a loan application, the EHLF Committee will consider the following factors (and any other relevant information received from a reliable source):
      1. The amount requested;
      2. The nature and circumstances of the emergency hardship described by the applicant, including the foreseeability, urgency, and gravity of the need;
      3. Any other information provided by the applicant;
      4. The records indicating whether the applicant has successfully paid off any prior EHLF loan.
   2. The committee shall not consider information about the applicant that is not pertinent to the employee’s eligibility, need, or employment status.
6. Loan Terms and Conditions
   1. All loans shall be made on the following conditions:
      1. The loan shall be payable in equal monthly installments amortized over a period of up to six months (in the case of a loan of $500 or less), up to one year (for loans of $1,000 or less), or up to 18 months (for loans of $1,500 or less) beginning the next payroll cycle occurring one calendar month after the loan disbursement date (for example, a loan disbursement in January begins deductions in March). Interest will not be charged on loans, although certain charges may apply as provided in subsection (iii) below.
      2. Payments will be deducted from the employee’s payroll disbursements. If the employee terminates employment, or for any other reason does not earn or receive pay for any payroll period while the loan is outstanding, the employee will be expected to remit payment by check or cash directly to Business & Financial Services and any outstanding balance upon termination will be deducted from the employee’s final paycheck.
      3. Any loan obligation in default will incur a 1.5% payment deferral charge on the unpaid loan balance as of the date that the payment was due. The payment deferral charge will be applied to the adjusted balance each month until the loan payments are current or the loan is paid in full. A loan will be considered in default if unpaid ten (10) days after payment was due. CSU will have the right to accelerate a loan, declaring the full amount due and payable, if it is in default.  If the terms of this agreement and repayment are not adhered to, a delinquent account may be referred to an external collection agency where it will be reported to the credit bureaus and the employee will be responsible for collection agency fees of 20% of the debt, and all costs and expenses including reasonable attorney fees that CSU incurs in its collection efforts. The delinquent account may also be reported to the Colorado Department of Revenue for interception of your Colorado income tax refund and wage garnishment.
   2. A prospective borrower may obtain information about requesting an emergency loan from the Human Resources Service Center in person, or by emailing MyHR@colostate.edu.
   3. The prospective borrower must sign to indicate his or her agreement with the terms and conditions of the emergency loan.
   4. The borrower must authorize the University to make an automatic payroll deduction each pay period until the loan is paid in full. This authorization is part of the loan application process.

COMPLIANCE WITH THIS POLICY

Compliance with this policy is required. For assistance with interpretation or application of this policy, contact Human Resources or Commitment to Campus.

REFERENCES 

Emergency Hardship Loan Fund Program information website

Internal Revenue Code, 26 USC § 7872(c)(3) - Treatment of loans with below-market interest rates--$10,000 de minimis exception for compensation-related and corporate-shareholder loans

Internal Revenue Code, 26 U.S.C. section 7872, as described in IRS Publication 15-A (2013)

FORMS AND TOOLS

Application

APPROVALS

Approved by Anthony A. Frank, President on May 16, 2014

Revision approved by Amy Parsons, Vice President for University Operations on April 3, 2015

Revision approved by Lynn Johnson, Vice President for University Operations, on January 15, 2020

Revision approved by Brendan Hanlon, Vice President for University Operations, on March 29, 2023