ED Releases Further Guidance on Use of CARES Act Emergency Funding for Students, Institutions

By Owen Daugherty, NASFAA Staff Reporter

The Department of Education (ED) on Tuesday announced that more than $6 billion is now available to institutions as part of the funding allocated in the Higher Education Emergency Relief Fund (HEERF), and provided additional guidance on how emergency grant funding may be allocated for students, specifically noting that students must be Title IV eligible to receive the funds.

Schools immediately questioned whether they would need to have a FAFSA on file in order to disburse CARES Act emergency funds to students. While ED’s guidance does state that a FAFSA is not required, having one on file would be the only practicable way for an institution to determine that a student is eligible to participate in the student aid programs and meet all applicable eligibility requirements. NASFAA has already reached out to ED regarding the scope of ED’s statement that only “students who are or could be eligible to participate in programs under Section 484 in Title IV of the Higher Education Act of 1965, as amended (HEA), may receive emergency financial aid grants.”

The guidance addressed several outstanding questions, such as clarifying that students who were enrolled exclusively in online programs on March 13 (the date of President Donald Trump’s national emergency proclamation) are not eligible to receive the emergency grants, that institutions may not use the student portion of funding to reimburse themselves for tuition or room and board refunds, and that the student grants may not be used to cover outstanding balances on a student account. By stating that only Title IV eligible students would be able to receive emergency grants, the guidance also excluded international students and those in the Deferred Action for Childhood Arrivals (DACA) program from receiving emergency funding.

Education Secretary Betsy DeVos said in a press release that the roughly $6 billion allocated on Tuesday to colleges and universities is for costs related to "significant changes to the delivery of instruction due to the coronavirus.”

“The additional funds made available today can be used to expand remote learning programs, build IT capacity, and train faculty and staff to operate in a remote learning environment so that at any moment institutions can pivot quickly,” DeVos said. “I hope that institutions that already have robust remote learning capacity will consider using this funding to support additional emergency cash grants for students.” 

Institutions are required to spend at least half of their total HEERF funds on direct cash grants to students, but ED has encouraged institutions to use the institutional share of funding to provide emergency funding to students beyond the minimum 50%, “especially if [the institution] has significant endowment or other resources at its disposal. Institutions choosing to use their share of the HEERF funds on student emergency grants would need to follow the rules ED has established for making awards from the student share of HEERF funds.

In a call Tuesday afternoon, DeVos said 50% of institutions have completed the “simple” application to receive funds and urged the remaining schools to do so as soon as possible. As institutions faced criticism for not rapidly submitting certification forms for the funding since it was made available on April 9, NASFAA President Justin Draeger told Inside Higher Ed that many had plans in place, but were waiting for ED to release more information about how they are allowed to spend the money. 

For schools to access the second wave of funding, ED made clear they first must have submitted the certification form for the emergency grants for students, and must then submit a second certification form attesting that they will use the money in accordance with the law.

Under Secretary Diane Jones apologized for any “glitches” that complicated the certification system for schools attempting to complete the requirement to access the first round of funds. 

She also made clear that the emergency cash grants to students cannot be applied toward outstanding balances, and must be disbursed directly to students, using means such as check, electronic funds transfer, payment app, or pre-loaded debit card. NASFAA does not believe this would prevent an institution from using its internal systems to process and disburse these cash grants to students for ease of tracking awards and to take advantage of existing infrastructure, so long as the funds simply passed through the institutional system and did not pay for any charges on the student’s account.

Additionally, students who receive funding from their institutions are not required to record or track how it is spent. Institutions are, however, required to report 30 days from the date of the signed certification agreement, and every 45 days thereafter, on how grants were distributed to students, the amount of each grant awarded to each student, how the amount of each grant was calculated, and any instructions given to students about the grant.

However, ED also clarified that institutions may use funds allocated under the HEERF to reimburse themselves if they provided an emergency grant to a student that meets the same eligibility criteria of HEERF grant funds on or after March 27 — the day the CARES Act became law. In such instances, ED would consider the institution to have made an advance payment of HEERF dollars to students in anticipation of receipt of the federal deposit.

The new certification form makes clear that institutions may, to the greatest extent practicable within one year of signing the form, only use the institutional funds to cover costs associated with significant changes to the delivery of instruction — first incurred on or after March 13 — due to the pandemic. It prohibits them from using it for costs associated with paying contractors for pre-enrollment recruitment activities, including marketing and advertising, in addition to costs associated with endowments. Also excluded are capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship, as well as payment for senior administration or executive salaries benefits or bonuses, stock buybacks, stock options, or capital distributions.

Funding allocations for schools were set by a formula mandated in the CARES Act, which significantly weights the number of full-time equivalent (FTE) students who are Pell Grant-eligible but also takes into account the total population of the school excluding the number of students who were enrolled full-time online before the outbreak, according to the release from ED.

For the latest on how COVID-19 is impacting higher education and student financial aid, refer to NASFAA’s COVID-19 Web Center, and listen to a special episode of “Off The Cuff” focused on the new guidance. NASFAA will provide further analysis of the new certification form in the coming days.

 

Publication Date: 4/21/2020


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Katie M | 5/15/2020 3:36:59 PM

I am absolutely devastated by the new advisements of online students not being able to receive CARES Act emergency assistance as well as others. We are all faced with the same circumstances (needing to move, loss of income, health bills, etc.). We have been promised and offered assistance if needed - now that is being taken away. I hope this is something that will be reconsidered. Not all of us have the opportunity to actually go to school on campus and that seems like it is being held against us. Every student pays tuition to attend that school so why should online students not be part it?

Katie M | 5/15/2020 3:36:59 PM

I am absolutely devastated by the new advisements of online students not being able to receive CARES Act emergency assistance as well as others. We are all faced with the same circumstances (needing to move, loss of income, health bills, etc.). We have been promised and offered assistance if needed - now that is being taken away. I hope this is something that will be reconsidered. Not all of us have the opportunity to actually go to school on campus and that seems like it is being held against us. Every student pays tuition to attend that school so why should online students not be part it?

Ashley J | 4/24/2020 7:12:23 PM

I, as well as a multitude of online students, are absolutely devastated by the new advisements of online students not being able to receive CARES Act emergency assistance. As you can imagine, we are faced with the same circumstances (needing to move, loss of income, health bills, etc.). We have been promised and offered assistance if needed - now that is being taken away. I hope that you will reconsider this choice, because it means not having food for some, not having the ability to pay for hospital bills, childcare, etc. It is not just to exclude us from this.

David S | 4/22/2020 4:32:30 PM

Trigger warning: biased political opinion about to be expressed.

It's all about DACA students and international students, folks. This administration doesn't want either here, therefore the Dept of Ed was told to rewrite the law. Which of course is not their job.

Laura G | 4/22/2020 2:39:40 PM

Our school has programs that are available through resident classes as well as online classes. Our primarily online students are facing the same dire situation with lost income, possible loss of personal residence, and other increased expenses due to the COVID-19 emergency as do campus resident students. We do not understand the differentiation between online and residence students under this guidance. We have many desperate students right now who take online classes and are finding it difficult to keep up their studies and home-school their children while at the same time trying to locate work because they lost their jobs and need to pay their rent. Their situation is no different than a campus resident student. This differentiation between students does not make sense.

Kimberly C | 4/22/2020 2:31:11 PM

We had been told that these funds were for all students and have made plans and "promises" to some of the students that need money for, say a computer, to continue classes. Why is it now Title IV eligible students only? This is a total frustration. And does this also include the SEOG money that was transfer to an Emergency SEOG fund?

Joel T | 4/22/2020 2:16:54 PM

I submitted an email to "AskAFed" first thing this morning asking if we could simply have a student submit an attestation stating that they meet all of the aforementioned requirements if they have not submitted a FAFSA. I am hopeful that we can go that route so that I don't have to ask students to get a bunch of documentation from agencies that are probably running on limited staff or closed to public foot traffic.

James C | 4/22/2020 1:17:01 PM

Going back to the FAFSA eligibility checks for CARES Act recipients, this reminds me of the days when the FAFSA was not required if the student was only receiving a parent PLUS loan. However, the school still had to perform all the eligibility checks so we collected citizenship information and ss cards for the student and parent borrower, checked SSA for selective service and NSLDS for defaults and over-payments. We got tired of it and required a student FAFSA for Parent PLUS borrowers even though the feds did not at the time. We were happy the feds came around to requiring the FAFSA for the PLUS loan. If you don't have a FAFSA on file, you would need to perform these tasks on your own for the CARES Act, in my opinion, or have a student sign-off form attesting to meeting these eligibility requirements.

James C | 4/22/2020 12:51:00 PM

I interpret this to mean a fafsa is a means to determine eligibility checks especially citizenship checks. Otherwise, you would need to have some way to determine those eligibility checks. So other title iv eligibility reasons (such as poor SAP) would not matter in the disbursement of these funds. Students in default are an interesting dilemma. I would not award them a CARES grant.

Michelle H | 4/22/2020 12:5:39 PM

We were previously told that these funds could not count as EFA or toward COA, is that still the case?

Joan H | 4/22/2020 11:11:34 AM

yes this is a huge discrepancy from the previous guidance. All students were eligible that were impacted by the COV financially whether they had a FAFSA or not. And the on line thing....trying to wrap our collective fa professional heads around the conflicts in guidance has become a huge frustration.

Ryan Z | 4/22/2020 9:47:50 AM

Does this guidance now exclude students not enrolled in Title IV eligible programs (non-degree/certificate, etc.)?

Tonya R | 4/22/2020 9:23:37 AM

What about dual credit students? Should they be excluded since they are not eligible for Title IV funds? It seems to be conflicting information out there about this issue.

Joel T | 4/22/2020 9:7:37 AM

I have to echo the question that David S. has posed. We have repeatedly heard that these are NOT Title IV funds and can be administered to essentially anyone that was enrolled in courses at the time of the pandemic. Furthermore, I read nothing in the law saying that students enrolled in only online courses were not eligible for assistance. Simply because an online student did not have a lot of changes from an academic standpoint does not mean they did not have an increase in other expenses.

Tori B | 4/22/2020 8:48:39 AM

Are there parameters when Fin Aid Offices/Institutions have to have the process/form for requesting emergency funding for students in place?

James P | 4/22/2020 8:38:59 AM

Does this mean that an enrolled student who is not currently receiving TIV aid because of a SAP or default issue in not entitled to these funds?

David S | 4/21/2020 6:43:10 PM

Are there discrepancies between the language in the statute regarding student eligibility and today's guidance from ED? Because every interpretation I heard before today - every one of them - said that this is not Title IV aid and those eligibility criteria did not apply.

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