The Department of Education has released its first guidance on the disbursement of some of the funds appropriated to colleges and universities in the Education Stabilization Fund of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as well as how much individual institutions will receive.
ED will release CARES Act funds to institutions on two separate timelines. Schools first will receive their portion of the $6.28 billion allocated for emergency grant aid to students. In order to receive these funds, schools must complete a certification and agreement form and submit the form via a grants.gov portal.
ED has not offered additional guidance on allowable uses for these funds beyond what was in the CARES Act, which dictates that students use the funds “to cover expenses related to the disruption of campus operations due to coronavirus (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care, and child care).” However, in the required certification and agreement form, schools must agree to a number of specific provisions including that:
- Emergency grant aid funds will not be used for any purpose other than the direct payment of grants to students for their expenses related to the disruption of campus operations due to coronavirus.
- Schools will not use the emergency grant aid funds to reimburse themselves for any costs or expenses, including but not limited to costs associated with significant changes to the delivery of instruction due to the coronavirus and/or any refunds or other benefits that schools previously issued to students.
- Schools must report to ED 30 days from the date of the agreement, and every 45 days after, how grants were distributed to students, the amount awarded to each student, how the amount of each grant was calculated, and any instructions or directions given to students about the grants.
- In reports to ED, schools must also document that they have continued to pay all employees and contractors during the period of disruptions or closures to the greatest extent practicable.
In a letter to college and university presidents, Education Secretary Betsy DeVos notes the “significant discretion on how to award this emergency assistance to students,” and states that “each institution may develop its own system and process for determining how to allocate these funds.” She suggests that schools consider prioritizing students “with the greatest need” and consider “establishing a maximum funding threshold for each student to ensure that these funds are distributed as widely as possible,” such as a cap equal to the maximum Pell Grant award for 2019-20. She also requests that schools whose students do not have significant financial need at this time consider giving their allocation to other schools in their state or region that might have significant need, though there is no additional guidance on how that would be facilitated. NACUBO understands that ED may soon be releasing additional guidance for institutions to address ongoing questions concerning allowable uses of the funds and appropriate messaging to students to accompany distribution of the funds, among other items.
On April 16, NACUBO sent a letter to the Department of the Treasury and IRS requesting that it issue guidance indicating that these funds are not taxable income for students.
ED also has announced the release of education block grants to individual states. These funds flow directly to state governments and, once states have applied and received their funds, governors in each state will have flexibility to distribute the aid as they see fit to elementary, secondary, and postsecondary institutions throughout the state.
ED is working to issue guidance and allocate additional funding for institutional use in “the coming weeks.”
NACUBO will continue advocating for federal support for higher education in this time of crisis. Stay up to date on our coronavirus advocacy relief efforts as well as COVID-19 guidance for higher education.