U.S. Department of Education Releases Details on CARES Act Emergency Assistance for Higher Education Students

On Thursday, April 9, 2020, the U.S. Department of Education (ED) released details regarding its distribution of approximately $6 billion in emergency coronavirus assistance to postsecondary students. This student assistance constitutes the first round of emergency funding under the Higher Education Emergency Relief Fund (HEERF) established by Section 18004(a)(1) of the CARES Act, and is part of more than $14 billion allocated by the CARES Act to higher education institutions and students. (Our previous summary of the CARES Act provisions specific to educational institution and student relief is available here.)

In a letter to college and university presidents accompanying a breakdown of each institution’s individual allocation, Secretary of Education Betsy DeVos stated that institutions have significant discretion on how to award this emergency assistance to students. The letter further explained that each institution may develop its own system and process for determining how to allocate these funds, which may include distributing the funds to all students or only to students who demonstrate significant need. As set forth in the CARES Act and reiterated by the Secretary, the only requirement 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). Both from the materials distributed by ED and from a subsequent ED teleconference with stakeholders, it is clear that these student relief funds cannot be used by an institution to reimburse itself for any costs or expenses, including but not limited to any costs associated with significant changes to the delivery of instruction due to the coronavirus and/or any refunds or other benefits that the institution previously issued to students.

To receive its allocation of this emergency student assistance, an institution must complete and submit a Certificate of Funding and Agreement through the grants.gov website. ED has indicated that it expects to begin disbursing these funds through its standard federal student aid disbursement system as early as April 15, 2020. The certification form makes clear that ED does not consider these individual emergency financial aid grants under the CARES Act to constitute federal student financial aid under Title IV of the Higher Education Act. Institutions will be required to report to ED, among other things, how grants have been distributed to students, the amount of each grant awarded to each student, and how the amount of each grant was calculated. These reports are required within 30 days from signing the certification form, and every 45 days thereafter. Additionally, pursuant to Section 18006 of the CARES Act, an institution receiving these funds must document to ED that it has continued to pay all of its employees and contractors during the period of any coronavirus-related disruptions or closures “to the greatest extent practicable,” explaining in detail all specific actions and decisions related thereto.

Please also note that an institution not already registered with grants.gov must do so in order to access these emergency relief funds. Additionally, we understand that ED must specifically add the HEERF to the “grant opportunities” listed on grants.gov before institutions may submit the required certification form. We recommend that institutions take all steps necessary to obtain a grants.gov registration (if not previously registered) and regularly monitor the posted ED grant opportunities for submitting the certification form.

ED further has indicated that it is working expeditiously to allocate the remaining HEERF amounts that may be used for institutional costs associated with significant changes to the delivery of instruction due to the coronavirus (excluding payment to contractors for the provision of pre-enrollment recruitment activities; endowments; or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship). It also stated that it will provide further details on how institutions may access that institutional funding.

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.