U.S. Department of Education Releases Additional Details on CARES Act Funds for Minority Serving Institutions, Institutions Serving Low-Income Students and Other Institutions with the Greatest Unmet Coronavirus Needs, and State Discretionary Grants

On April 30, 2020, the U.S. Department of Education (ED) released additional information regarding the approximately $1.4 billion in funding that is available pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act for Minority Serving Institutions (MSIs), including Historically Black Colleges and Universities (HBCUs) and Tribally Controlled Colleges and Universities (TCCUs), as well as for institutions serving low-income students. ED also provided information and funding allocations for institutions with the most unmet need related to coronavirus, which are administered through the Fund for the Improvement of Postsecondary Education (FIPSE). (Our previous summary of the CARES Act provisions specific to educational institution and student relief is available here.)

Additionally, on April 27, 2020, ED announced the availability of approximately $300 million in Education Stabilization Fund Discretionary Grants (Discretionary Grants), which, pursuant to Section 18001(a)(3) of the CARES Act, are designated for states with the highest coronavirus burden. As described in more detail below, ED announced that it is making the Discretionary Grants available to states through two separate grant competitions: (1) the Education Stabilization Fund-Rethink 12 Education Models (ESF-REM) Grants, and (2) the Education Stabilization-Reimagining Workforce Preparation (ESF-RWP) Grants.

Grants to Minority Serving Institutions, Institutions Serving Low-Income Students and Other Institutions with Greatest Unmet Coronavirus Need

Section 18004(a)(2) of the CARES Act provides grants to:

• MSIs, including but not limited to HBCUs, TCCUs, Asian American and Native American Pacific Islander-Serving Institutions, and institutions participating in the Developing Hispanic-Serving Institutions Program
• Institutions participating in the Strengthening Institutions Program, which are institutions not participating in MSI programs but that have at least 50% of their degree students receiving need-based assistance under the Federal Student Aid programs authorized by Title IV of the Higher Education Act of 1965 (Title IV Programs) or have a substantial number of enrolled Pell Grant recipient students, and have low educational and general expenditures

Section 18004(a)(3) of the CARES Act provides additional funds to institutions through the FIPSE, for institutions with the greatest unmet needs related to coronavirus. In awarding these funds, the CARES Act requires ED to give priority to institutions that have not otherwise been allocated at least $500,000 under the other, more significant tranches of emergency aid under the Higher Education Emergency Relief Fund (HEERF). As such, ED allocated funds to ensure that every eligible public and private nonprofit institution will receive at least $500,000 in HEERF funding. ED stated that even after making this funds allocation, it will have approximately $15 million to distribute to institutions through the FIPSE under Section 18004(a)(3). As such, ED will issue a Notice Inviting Applications, inviting institutions to participate in a grant competition for these remaining funds.

Institutions may use funding provided by Sections 18004(a)(2) and 18004(a)(3) to pay for technology costs associated with transitioning to distance education, grants to cover the costs of attendance for eligible students, and faculty and staff trainings. Funds may also be used to cover operational costs, including lost revenue, reimbursements for prior expenses and payroll.

Unlike other monies provided under the HEERF, institutions are not required to use at least 50% of the funds provided under Sections 18004(a)(2) or 18004(a)(3) on emergency grants to students. However, ED is encouraging recipients to use as much of these funds as possible on student grants. Similar to the other monies provided under the HEERF, only students who are eligible to participate in the Title IV Programs may receive such grants.

In order to access these funds, eligible institutions must complete and submit a Certification and Agreement by August 1, 2020, through the grants.gov website. The Certification and Agreement, a cover letter and the allocation tables by institution are available on the ED Office of Postsecondary Education's CARES Act website.

Education Stabilization Fund — Rethink 12 Education Models Grants

As described by ED, the purpose of the ESF-REM Grants program is to provide discretionary grants to state educational agencies (SEAs) in states with the highest coronavirus burden to address the educational needs of students, their parents, and teachers in elementary and secondary schools (both public and nonpublic). ED is making $180 million available through the ESF-REM Grants program and the average amount of each award is estimated to be $15 million. The application package for ESF-REM Grants is available here.

Each SEA applicant for ESF-REM Grant funds must address one of three “Absolute Priorities” in its application in order to be considered for the award of funds (and may submit no more than one application for ESF-REM Grant funds):

• Under Absolute Priority 1, applicants must provide microgrants to parents to meet the educational needs of their school-age children, through increased access to high-quality remote-learning. To address Absolute Priority 1, an SEA would need to identify in its application the types of education and related services, expenses and providers available through the microgrants. At least 80% of the grant funds must be used for services directly used by students under the microgrants, and no more than 5% may be used for an SEA’s administrative costs.
• Under Absolute Priority 2, an applicant must propose the development and/or expansion of a high-quality course-access program or statewide virtual school. A course-access program enables students to select courses offered by any public school in the state or by third-party providers, regardless of a student’s assigned school. A statewide virtual school must provide full-time or supplemental education to all students in the state.
• To address Absolute Priority 3, an applicant may propose its own educational strategies to address the specific remote-learning needs of its state. The strategies must “demonstrate a rationale,” meaning that a key component in the project must be informed by research or evaluation findings.

The Notice Inviting Applications for ESF-REM Grants specifies that applicants must address the following application requirements:

1. Their approach to addressing one of three Absolute Priorities, including an implementation plan and timeline
2. An analysis of the state’s immediate remote learning needs and a description of how the proposed project will address those needs
3. A description of the state’s coronavirus burden based on factors other than those provided in the application package
4. An analysis of state assets and collaborative efforts made by the state to improve student outcomes during the pandemic
5. Assurances that the applicant will provide information as requested by the ED for evaluations it will carry out
6. Demonstrate support for the proposed project by the governor of the state, such as through a letter signed by the governor

The selection criteria are as follows, with the highest possible point total being 100:

• Highest coronavirus burden (up to 40 points). This is based on ED’s percentile calculation of coronavirus burden by state, and the applicant’s response to application requirement #3, above
• Quality of project services and project plan (up to 35 points)
• Quality of management plan and adequacy of resources (up to 25 points)

ED is strongly encouraging each potential applicant to notify it of its intent to apply by sending an email to ESF-REM@ed.gov with “ESF-REM Intent to Apply” in the subject line; the notices of intent to apply are due May 19, 2020, but SEAs that do not submit a notice of intent may still apply for funding.

Applications are due by June 29, 2020. ED intends to announce awards by no later than August 2020. ED recommends limiting the project narrative portion to the application to no more than 25 pages.

Education Stabilization Fund — Reimagining Workforce Preparation Grants

The purpose of the ESF-RWP Grants program is to assist state efforts to leverage entrepreneurship to create new educational opportunities and pathways that help citizens return to work, small businesses recover and support new workforce opportunities. These funds are also intended by ED to build new capacity within a state to offer short-term postsecondary programs that are responsive to the needs of individuals to more rapidly adapt and evolve to ever-changing workplace and community needs. ED is making approximately $125.7 million available through the ESF-RWP Grants program, with the estimated average amount of each award anticipated to be $15 million.

The Notice Inviting Applications for ESF-RWP Grants states that ED will issue a supplemental notice that more fully sets forth the application requirements, an application form, types of eligible applicants and all selection criteria. In this initial notice, ED indicates that applicants will be required to include a description of the state’s coronavirus burden based upon indicators and information factors other than those provided in the application package that demonstrate the significance of the impact of COVID-19 on students, parents and schools in the state. Such a description may include additional data, including other public health measures such as coronavirus-related deaths per capita, or any other relevant education, labor or demographic data.

We are continuing to closely monitor developments from ED and other education regulatory authorities related to the coronavirus pandemic. Should you have questions regarding this matter, or other educational regulatory matters, please do not hesitate to contact any member of our Education team, or your usual contact at Faegre Drinker.