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