Federal Coronavirus Relief Bill (CARES Act)
The CARES Act, a $2 trillion emergency economic relief package that seeks to stem the economic fallout from the coronavirus pandemic was signed into law on March 27, 2020. The Department of Education (ED) issued the first guidance on CARES Act funding on April 9th, 2020. These provisions refer exclusively to Section 18004(a)(1) (Formula Funds) used to provide emergency student financial aid.
A Closer Look:
The CARES Act provides several methods for distributing roughly $14 billion in Higher Education Emergency Relie funds (HEERF) to institutions of higher education. About $12.56 billion will be distributed to institutions based on student enrollment. Of the amount allocated to each, at least 50 percent must be reserved to provide students with emergency financial aid grants to help cover expenses related to the disruption of campus operations due to coronavirus. The Department of Education acted quickly in hopes of helping students in need. The funds will be awarded based on two formula factors:
- First, 75% of the funds will be awarded based on each an institution share of full-time equivalent (FTE) enrollment of Pell Grant recipients who were not enrolled exclusively in distance education prior to the coronavirus emergency.
- Secondly, 25% of the funds will be awarded to institutions based on FTE enrollment of students who were not Pell Grant recipients and who were not enrolled exclusively in distance education prior to the coronavirus emergency, relative to the total FTE enrollment.
The first factor primarily allocates funds for undergraduate enrollment since Pell Grant eligibility is limited to undergraduates and students in post-baccalaureate teacher education programs. The second factor allocates funds based on undergraduate and graduate enrollment.
Institutions have significant discretion on how to award emergency assistance to students. This means that each institution may develop its own system and process for determining how to allocate funds, which may include distributing the funds to all students or only to students who demonstrate significant need.
The only statutory requirement outlined by the Department of Education is that these funds be used to cover expenses related to the disruption of campus operations due to coronavirus (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care, and child care). As a point of reference, the Department suggested using the maximum Federal Pell grant (for the 2019-2020 academic year,$6,195) as that threshold ).
Accessing Funds
Institutions are required to sign and return the Certificate of Funding and Agreement via: grants.gov acknowledging the terms and conditions of the funding. After the Department receives the certificate, institutions may draw down their emergency assistance funds using the Department’s G5 system. While the Department of Education is providing some financial support, the need is unprecedented and vast.
Timeline
Florida Consortium institutions; Florida International University, University of Central Florida, and University of South Florida have been working around the clock. They are working to ensure emergency resources are available for students as quickly as possible. Each has set up central sites that are being updated regularly.