American Council on Education Simulates Distribution of CARES Act Emergency Funds

By Rachel Gentry, NASFAA Policy & Federal Relations Team

In the wake of the $2 trillion COVID-19 relief package passed by Congress last week, colleges and universities across the country are beginning to consider how the legislation might impact their campuses. In an effort to provide schools with a rough estimate of how much emergency assistance they may receive from the Emergency Stabilization Fund included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the American Council on Education (ACE) conducted a simulation of the distribution of emergency funds for every institution of higher education. The estimates, organized alphabetically by state, can be viewed here.

The CARES Act allocates nearly $14 billion to higher education in an Emergency Stabilization Fund. Ninety percent, or $12.5 billion, of that amount will be allocated to institutions based 75% on the enrollment of full-time equivalent (FTE) Pell Grant recipients and 25% on enrollment of FTE non-Pell Grant recipients. Students who were enrolled exclusively in online, distance education courses prior to the COVID-19 emergency will be excluded from this calculation.

While ACE’s simulation may be helpful to provide schools with a general idea of how much they may receive, final dollar amounts will be determined by the Department of Education (ED); these estimates should be used for general planning purposes only. The draft results of ACE’s simulation provide an approximate, “best guess” estimate of how emergency relief may be distributed. ED will determine how to construct the distribution formula, and may make different assumptions than those used to conduct this simulation. Until ED determines its methodology, there is no way of knowing the exact dollar amount each institution may receive.

ACE’s simulation was conducted using data from the Integrated Postsecondary Education Data System (IPEDS), a postsecondary education data collection program managed by ED’s National Center for Education Statistics (NCES). IPEDS gathers information annually from every institution of higher education that participates in the federal student financial aid programs. The simulation used IPEDS data from the 2017-18 academic year, the most recent year of fully available data, and included the following variables in its calculations:

  1. 12-month FTE enrollments for both undergraduate and graduate students (and thus the total of all students)

  2. 12-month headcount enrollments for both undergraduate and graduate students (and thus the total of all students)

  3. Fall enrollments for both undergraduate and graduate students (and thus the total of all students)

  4. Numbers of undergraduate and graduate students enrolled in the fall of 2017 who were

    • Enrolled exclusively in distance education courses;

    • Enrolled in some, but not all distance education courses; and

    • Not enrolled in any distance education courses

  5. The full-year number of Pell Grant recipients (headcount)

Fifty percent of the $14 billion in emergency funds received by institutions under the CARES Act must go directly to students in the form of emergency financial aid grants for expenses related to the disruption of campus operations due to the spread of the new coronavirus. Emergency grants to students can be used for eligible expenses under a student’s cost of attendance such as food, housing, course materials, technology, health care, and child care. Institutions may use the other 50% of funds they receive on crisis-related expenses such as lost revenue, reimbursement for expenses already incurred, technology costs associated with transitioning to distance education, faculty and staff training, and payroll. The bill stipulates that the funding will be distributed by the Secretary in the same manner that other Title IV aid is distributed.

If you have questions about this simulation or the methodology used to estimate the distribution of funds, please contact us at policy@nasfaa.org

We expect ED to release detailed guidance related to the Emergency Stabilization Fund, including emergency grants to students, in the near future.

For more information and resources on how the spread of the novel coronavirus is impacting student financial aid, please refer to NASFAA's COVID-19 Web Center.

 

Publication Date: 3/30/2020


Susan G | 4/2/2020 4:5:59 PM

Darren C - click "here" at the end of the 1st paragraph for a list

Darren C | 4/2/2020 3:49:53 PM

Where is the link to examine the simulation for our schools? I don't see it anywhere

Nichole Davis M | 3/31/2020 10:0:44 AM

Will the graduate/ professional schools see any of this money?

David S | 3/30/2020 11:37:58 AM

I thought I had read that the allocation formula for these funds were going to be based 75% on Pell recipient enrollment and 25% on FTE. If that's the case, ACE's formula seems more complicated than it needs to be, unless there's something I'm missing (which is a distinct possibility).

But either way, ED has the final say, and I urge any colleagues whose Presidents, Deans, Provosts, VP's for Finance, direct supervisors or anyone else asks "how much of this money can we expect to receive?" to answer with a page full of disclaimers. Because the real answer is "time will tell."

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