The passage of the 2021 Consolidated Appropriations Act authorized more than $21 billion in supplemental Higher Education Emergency Relief Fund (HEERF II) dollars for institutions to spend on emergency student grants as well as to defray institutional expenses and carry out student support activities related to the coronavirus pandemic.
With this supplemental funding comes new guidance from the Department of Education (ED), some of which has left financial aid administrators confused about allowable uses of HEERF II funds and previously unexpended HEERF funds from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The source of confusion is language in the HEERF II Certification and Agreement forms for both the Student Share and Institutional Share funds, which reads, “Recipient acknowledges that any obligation under this grant (pre-award costs pursuant to 2 CFR § 200.458) must have been incurred on or after December 27, 2020, the date of the enactment of the CRRSAA.”
This raises questions about how HEERF II dollars can be spent on spring 2021 student account charges, and even calls into question how remaining CARES Act HEERF dollars can be spent.
HEERF II student emergency grants were given a broader allowable use of funds than was permitted by the CARES Act. Student grants can be used for any component of the student's cost of attendance (COA) or for emergency costs that arise due to coronavirus, such as tuition, food, housing, health care (including mental health care), or child care. ED guidance also allows institutions to apply HEERF II student emergency grants to student accounts, with student authorization. One concern raised by institutions relates to instances when spring 2021 charges were applied to students' accounts prior to Dec. 27, 2020, and whether emergency grants could be awarded to cover those COA items that were posted to student accounts prior to December 27.
The new law also permits institutions to spend any remaining CARES Act HEERF dollars in accordance with the expanded use of funds in place of HEERF II dollars. However, it is unclear whether taking advantage of the expanded use of funds for those unspent CARES Act HEERF dollars also limits those grants to expenses incurred after December 27, or if institutions would have to abide by the old uses of funds if applying CARES HEERF dollars to pre-December 27 expenses.
As for institutional share funds, schools are also questioning how the December 27 date applies to lost revenue, which is a permitted use of funds for HEERF II institutional share dollars, but is not a cost.
NASFAA has raised these questions, along with others, to ED and will share those answers in Today's News as soon as they are available. However, NASFAA recommends that institutions do not wait to spend HEERF II or unexpended CARES Act HEERF funds until outstanding questions are answered, especially in light of the recent administration change and the possibility that answers could take longer than usual. Instead, institutions should spend funds in accordance with guidance that is clear, and instead use institutional dollars, when possible, for any uses of funds that remain unclear.
Publication Date: 1/22/2021