By Jenny Smulson, Director of Government Relations, AJCU
The Passage of the CARES Act: What it Means for the Higher Education Community
In the face of devastating human, social and economic upheaval, Congress and the Trump Administration have been working cooperatively to pass legislation addressing the COVID-19 crisis. In early March, federal leaders agreed to provide $8.3 billion in emergency aid to fight the spread of coronavirus. As a follow-up, they agreed on a package (estimated cost of $100 billion) to provide paid sick leave; extend free coronavirus testing to those without insurance; increase Medicaid and SNAP benefits; and boost unemployment insurance.
Meanwhile, institutions of higher education, including those within the AJCU network, had to close their campuses and swiftly transition to virtual learning. Though this was done to protect their communities from the spread of the disease, it caused enormous upheaval for students who had to move from their dorms and return home. In recognition of these challenges (and in spite of the immense cost), colleges and universities helped students in need by providing them with critical emergency support, including funds for traveling home and purchasing computers, and expanding wireless access and food assistance programs.
In late March, Congress and the President responded to ongoing pleas for assistance by passing and signing into law the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act of 2020. This $2 trillion economic stimulus package is the third relief and assistance bill advanced by the federal government to address the emergency needs of the nation related to the COVID-19 crisis. In addition to providing cash payments to families, CARES has specific provisions to assist the education and business communities, focusing on both student and institutional needs within the elementary, secondary and post-secondary sectors, as well as the needs of small, medium and large businesses.
The AJCU Government Relations Network advocated forcefully for grant assistance for students and institutions of higher education by sharing information from their campuses with Congressional delegations. Thanks to their tireless work, and that of the entire education community, the $30 billion Educational Stabilization Fund within the CARES Act now authorizes four grant programs for education: Education Stabilization Fund Discretionary grants; Governor’s Emergency Education Relief Fund; Elementary and Secondary School Emergency Relief Fund; and the Higher Education Emergency Relief Fund (HEERF).
Of the $12.6 billion made available for the HEERF, grant dollars will be distributed by a formula that takes into account the number of Pell recipients (75%) and the number of non-Pell full-time equivalent students (25%). Of the allocations made to an institution of higher education, 50% of the funds are reserved for student needs and 50% are reserved for the institutions to respond to the coronavirus and prepare for future costs associated with prolonged campus closures. The legislative language directs that funds available to students must be used for direct emergency aid for cost of attendance needs related to disruption of campus operations due to the coronavirus.
While seemingly straightforward, there have been many questions about how institutions of higher education can and should distribute emergency grants to students. The U.S. Department of Education has recently updated their website with FAQs that should help address these issues and provide more direct guidance to institutions in using both the student and institutional portions of these grants. Colleges and universities are now able to submit an application for the student emergency grant funds, as well as the institutional grants.
Other programs within the CARES Act may provide relief to institutions of higher education in their role as non-profit, local employers, including federal lending programs and deferment of contributions under the employer portion of the FICA tax. AJCU, along with other higher education associations, continues to advocate for clarity on the eligibility of nonprofits in the CARES-authorized lending programs, and to make recommendations for legislative changes to other CARES lending programs, to allow for greater participation of colleges and universities.
In light of the on-going spread of the coronavirus, our national leaders recognize the need for a fourth stimulus package. The higher education community is requesting $48 billion in emergency assistance that would be distributed using the CARES Act’s HEERF formula. In the weeks ahead, our community will be reaching out to their Congressional delegations to explain the impact this crisis has had on institutions and on students, especially those with financial need. It is apparent that financial need will increase significantly for many families, as they seek opportunities for their children (or themselves) to pursue post-secondary study.
Though COVID-19 is ravaging our nation, it is, at the same time, reinforcing the need for an educated, compassionate workforce equipped with the knowledge, skills and commitment to serve during times of crisis. We need the federal government’s partnership to stabilize and strengthen higher education: a safe and secure future will depend on our investment today in the science, health and public safety sectors, to name a few. Please visit AJCU’s Policy Corner to keep updated on our advocacy work, as well as our coronavirus page for important, updated information about our campuses and their responses to COVID-19.