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The Department of Education has released an allocation table and additional regulatory guidance in an FAQ document about the largest infusion of Higher Education Emergency Relief Fund (HEERF) aid to date—$36 billion—as passed by Congress in the American Rescue Plan Act (ARPA). The table makes clear which portion of the allocation must be spent on additional emergency grants to students and which portion is available for institutional uses.

As with earlier aid, schools that have previously received HEERF allocations do not need to take any further action to trigger receipt of this allocation. Institutions that determine they do not need some or all of their ARPA allocation may decline any portion of their award via a new form, and any funds voluntarily declined will be redistributed to institutions with greater coronavirus-related needs.

An additional $4 billion in ARPA HEERF allocations earmarked for Historically Black Colleges and Universities, Tribal Colleges and Universities, and other support programs have not yet been announced.

Much of this new guidance is meant to work in conjunction with earlier HEERF guidance released by ED, and this new FAQ specifies exactly which of its earlier guidance is still applicable to the HEERF grant program. NACUBO strongly urges members to review this guidance in its entirety.

To hear more about ED’s latest guidance from NACUBO’s policy team, register here for the next COVID-19 Town Hall on Wednesday, May 19. 

Emergency Grants to Students

Perhaps the biggest takeaway from ED’s new guidance is that it addresses the long-standing question of whether international or Deferred Action for Childhood Arrival (DACA) students are eligible to receive emergency financial aid grants under the HEERF programs. ED’s guidance now clarifies that all students who are or were enrolled in an institution on or after March 13, 2020 are eligible, regardless of whether they completed a Free Application for Federal Student Aid (FAFSA) or are eligible for Title IV aid. This includes citizens, permanent residents, international students, refugees, asylum seekers, DACA recipients, and similar students without documentation.

As was the case under the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA), institutions are directed with the ARPA funds to prioritize emergency grants to students with exceptional need, and institutions should carefully document how they prioritize students with exceptional need. While students who are studying abroad also are eligible to receive HEERF emergency grants, ED encourages institutions to prioritize domestic students, especially undergraduates.

Related to issues of grant disbursement, ED indicates that in cases where a student does not cash their emergency grant check by a reasonable date, institutions may choose to void the check and redistribute the funds to other students by the end of the HEERF grant performance period. Institutions are urged to engage in reasonable attempts to contact those students and document the process and procedures followed. ED notes that the emergency grants cannot be used to recover stop-payment fees incurred due to voided and reissued student grant checks that were lost or never received by students.

As was also the case in CRRSAA, there are certain restrictions for institutions in passing along this aid to student recipients. Schools may not condition the receipt of these financial aid grants to students on continued or future enrollment in their institution. Institutions may not use an awarded financial aid grant to satisfy a student’s outstanding account balance unless it has obtained the student’s written or electronic affirmative consent, and may not  require such consent as a condition of the student’s eligibility for the financial aid grant. Students may determine how they may use their grants within the allowable uses indicated by ED, and institutions cannot direct or control how students use their emergency grants.

Finally, the FAQ reiterates that the emergency grants to students are not taxable income and refers institutions to March 30, 2021, guidance from IRS.

Institutional Share

Much of the guidance regarding the institutional share of this allocation echoes earlier guidance in terms of allowable and unallowable uses, indirect cost allocation, and general grant management.

Of particular note, while ED does reiterate earlier mandates that HEERF grant funds cannot be used to engage in construction or purchase of real property, the latest guidance makes clear that minor remodeling expenses related to COVID-19 are permitted. Examples include upgrades to HVAC systems and the purchase of “room dividers” to increase social distancing.

While ED also had previously indicated that institutions may use their institutional share to discharge student debt or unpaid balances by discharging the complete balance of the debt as lost revenue and reimbursing themselves through their HEERF institutional grants, the latest guidance strongly urges institutions to use this tool to discharge the debt specifically of students who may be experiencing enrollment holds, transcript withholding, or other particular hardships related to unpaid balances.

The guidance acknowledges that schools may now receive automatic emails about excessive cash drawdowns if large portions of their allocation are drawn down all at once, while also indicating that schools may have valid reasons for doing so. In those instances, ED directs institutions to send an email to their ED program contact with the award number and a summary of how the funds were expended.

As was the case with previous HEERF allocations, some portion of an institution’s funds must be drawn down within 90 days, and schools are encouraged to minimize time between drawing down and spending the funds.

Finally, ED again reiterates that institutions generally must expend their HEERF grant funds within one year from the date when the department processed the most recent obligation of funds for each specific grant, but no-cost extensions of up to 12 months may be available in cases of genuine need.

New Required Uses of Funds

The legislative text of ARPA created two new requirements for these allocations: that schools must use some of their institutional portion to “implement evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines” and to “conduct direct outreach to financial aid applicants about the opportunity to receive a financial aid adjustment due to the recent unemployment of a family member or independent student, or other circumstances.”

ED’s guidance goes into extensive detail on best practices for and execution of both requirements. It also indicates that because Congress did not prescribe any specific practices or methods that institutions must use to implement these activities, institutions have some flexibility to carry them out in a manner tailored to their unique needs and circumstances as long as they are evidence based, in accordance with public health guidelines, and involve direct outreach to students.

Additionally, ED urges strong documentation for actions taken by schools under both requirements that is consistent with 2 CFR § 200.334. Specifically, institutions should document (1) the strategies used to monitor and suppress COVID-19, (2) the evidence to support those strategies, (3) how those strategies were in accordance with public health guidelines, (4) the manner and extent of the direct outreach the institution conducted to financial aid applicants, and (5) how the amount of the HEERF grant spent on these two required activities was reasonable and necessary given the unique needs and circumstances of the institution.

Schools are further directed to use the Cost Principles in 200 CFR part 200 subpart E to guide their decisions on what constitutes a reasonable and necessary portion of HEERF grant funds to commit to implementing these two required grant activities.


In addition to the FAQ document, ED has provided an updated quarterly reporting form for HEERF institutional aid. The FAQ makes clear that quarterly reports are still required for both the institutional and student portions of an allocation, and that each report is separate for the calendar quarter reporting period and not cumulative. ED is still developing new annual reporting requirements.

ED’s FAQ also offers guidance on how to close out a HEERF grant once all the related funds are expended.

Finally, the department outlines possible enforcement actions that may be taken in cases of misused HEERF grant funds that include but are not limited to heightened institutional monitoring and reporting requirements, the freezing or termination of HEERF aid, and potential “high risk status” flags for the institution.


Liz Clark

Vice President, Policy and Research



Bryan Dickson

Director, Student Financial Services and Educational Programs



Sue Menditto

Senior Director, Accounting Policy


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