NACUBO, other higher education associations, and colleges and universities across the country spent much of the summer requesting that the Department of Education release additional guidance on allowable uses for CARES Act Higher Education Emergency Relief Fund (HEERF) spending.
In response, ED released a new, sizeable FAQ on October 2 that addresses spending concerns, primarily for the Section 18004(a)(1) portion of HEERF aid.
The document touches on a number of important items, including how HEERF aid may interact with Paycheck Protection Program loans, when it can and cannot be used for faculty expenses, and other items. Some clarifications of particular importance for business officers are—
- The Section 18004(a)(1) institutional share may not be used to offset revenue losses. Section 18004(a)(2) and 18004(a)(3) funds may be used for this purpose by schools that received them.
- Schools will not be penalized for awarding Section 18004(a)(1) “emergency grants” to students who are not eligible to receive federal student aid if they did so before ED’s Interim Final Rule requiring federal student aid eligibility was issued on June 17. Further, students do not need to actually file a Free Application for Federal Student Aid (FAFSA) to be eligible for HEERF emergency grants; they need only “to demonstrate that he or she meets the eligibility criteria for federal student aid” and are eligible for HEERF grants even if they’ve already reached their Title IV aid limits.
- Uniform Administrative Requirements, Cost Principles, And Audit Requirements For Federal Awards (Uniform Guidance) requirements, per 2 CFR part 200, do apply to HEERF awards received by colleges and universities, except where conflicts arise between the CARES Act and Uniform Guidance requirements; then, CARES Act requirements take precedence.
- Schools may use their Section 18004(a)(1) institutional share for technology expenses, such as “[purchasing] equipment or software, [paying] for online licensing fees, or [paying] for internet service to enable students to transition to distance learning,” as long as those expenses are related to virus-caused educational changes. Similarly, those funds can also be used for “computer system upgrades” related to instructional changes caused by the pandemic as long as they do not include “previously planned upgrades.”
Notably, ED appeared to shift from a previously held position by clarifying that institutions may use their Section 18004(a)(1) institutional share for personal protective equipment and other cleaning and sanitizing expenses as long as “these costs are new or added and needed to implement significant changes to the delivery of instruction due to the coronavirus.” While “reasonable costs of cleaning supplies, facility cleaning, or the purchase of items to help detect or prevent the spread of COVID-19 (e.g., thermometers, plastic barriers, or face masks)” were enumerated as permissible uses, the guidance also specifies that any expenses incurred due to facility changes to “ensure social distancing” must be “nonpermanent” to qualify as allowable.
The guidance further touches on how various refunds to students using HEERF aid should be processed and administered by institutions. It urges schools that have not already awarded the entirety of their “emergency grants” to students to do so quickly, stating that “[t]he point of emergency funds is to spend them immediately.”
The FAQ also makes clear that schools have “one calendar year (365 days) from the date of award in their HEERF Grant Award Notification (GAN) to complete the performance of their HEERF grants” but that schools may in some instances be able to receive a no-cost extension.
NACUBO urges business officers to read the eight-page document in its entirety to ensure full campus understanding and compliance.
Learn more about this guidance and other updates at the next Telephone Town Hall, October 23 at 2 pm ET.