ED Outlines Requirements for CARES Act Emergency Relief Institutional Funds

By NASFAA Policy & Federal Relations Staff

The Department of Education (ED) announced this week the availability of roughly $6 billion in institutional funds from the Higher Education Emergency Relief Fund (HEERF) created in the Coronavirus Aid, Relief and Economic Security (CARES) Act. The funds (HEERF-institutional share) will go directly to institutions to be spent on expenses incurred as a result of changes in instructional delivery due to the coronavirus, and are a separate stream from the more than $6 billion institutions are to send directly to students (HEERF-student share).

In order to receive the funds, institutions must sign a new certification agreement that stipulates the funds are to be used to cover “any costs associated with significant changes to the delivery of instruction due to the coronavirus” that were incurred on or after March 13, 2020 (the date of President Donald Trump’s national emergency proclamation). While there is a fair amount of latitude with these funds — especially compared to the HEERF-student share funds — the certification form does prohibit institutions from using them 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.

Institutions’ ability to draw down the institutional funds is also contingent upon them having submitted the Funding Certification and Agreement for Emergency Financial Aid Grants to Students, the certification agreement pertaining to the HEERF-student share. While not a requirement, the new certification both allows and encourages institutions to use their institutional HEERF funds to provide additional grants to students, with the stipulation that the funds would still remain subject to the requirements in the HEERF-student share certification agreement if used for student grants. Per the HEERF-student share certification, those funds can only be used “to provide emergency financial aid grants to students for expenses related to the disruption of campus operations due to coronavirus.”

The certification agreement specifically states the institution may use the institutional funds to reimburse itself for “costs related to refunds made to students” on or after March 13, 2020 for housing, food, hardware, software, internet connectivity, or other services that the institution could no longer provide due to disruption from the coronavirus. As a reminder, institutions are not able to reimburse themselves for the above items with HEERF-student share funds.

Similar to the HEERF-student share requirements, institutions must certify that they will “to the greatest extent practicable” continue to pay their employees and contractors during the period of disruption. Recipients will also be required to submit quarterly reports to the Secretary of Education describing how they plan on using their funds. Institutions that receive over $150,000 must include in their report a detailed explanation of how those funds were spent or will be spent, including a description of the project or activity they were spent on, the estimated number of jobs created or kept because of the funds, as well as information about any subcontracts or subgrants made with the funds, if applicable. ED may also require additional reporting.

The certification form states that institutions will agree to spend the dollars within a year of signing and dating the form, “to the greatest extent practicable.”

For the latest on how COVID-19 is impacting higher education and student financial aid, refer to NASFAA’s COVID-19 Web Center.

 

Publication Date: 4/22/2020


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