On April 21, the Department of Education announced that it is making available the second half of CARES Act formula grants to institutions and provided additional guidance on first half of funds, for emergency grants to students.
One half of the CARES Act funding is for institutional grants, which can be used to cover any costs associated with significant changes to instructional delivery due to the coronavirus. Before applying for the institutional funds, a college or university must complete and submit the certification and agreement form for the other half of funding, for the emergency grants for students.
In a letter to presidents, Secretary Betsy DeVos encouraged institutions to use the institutional portion to expand distance learning programs, increase IT capacity, and train faculty and staff to operate effectively in a remote learning environment. Before completing the certificate of agreement for the institutional portion, business officers and other school leaders should review ED’s FAQs.
Topics in the institutional portion FAQ include:
- Use of these funds for room and board reimbursements.
- Use of these funds to reimburse the institution for the purchase of laptops and other technologies for students.
- Allowability to use these funds for additional emergency aid grants to students.
New Guidance on Emergency Grant Aid for Students
ED has also provided an FAQ on the appropriate uses of the first half of CARES Act funds for emergency aid grant dollars institutions must provide to students. NACUBO encourages business officers to review all of the FAQ.
Only students who are or could be eligible to participate in Title IV programs may receive emergency financial aid grants, according to the FAQ. Essentially, students who have completed a FAFSA or are eligible to do so can receive the grants. The criteria to participate in Title IV programs include but are not limited to: U.S. citizenship or eligible non-citizenship; a valid Social Security number; registration with the Selective Service (for male students); and a high school diploma, GED, or completion of high school in an approved homeschool setting. NACUBO interprets this to mean that Deferred Action for Childhood Arrivals (DACA) students and some international students will not be eligible for the grants.
Additionally, students who were enrolled exclusively in an online program on March 13, 2020, are not eligible for emergency financial aid grants. The guidance notes, “students who were enrolled exclusively in online programs would not have expenses related to the disruption of campus operations due to coronavirus.”
Business officers will need to work with financial aid colleagues to determine which students will be eligible for these grants prior to distribution.
Reimbursement to the Institution
CARES Act dollars designated as emergency aid grants to students cannot be used to reimburse an institution for refunds to students for room and board or reimbursement for information technology hardware provided to students. The only institutionally funded emergency grants to students that are eligible for reimbursement from this half of the funds are grants:
for authorized expenses related to the disruption of campus operations due to coronavirus;
- made to students eligible to receive emergency financial aid grants under the CARES Act; and
- made on or after March 27, 2020.
An institution “must document that reimbursements for institutionally-funded emergency grants to students are made in accordance with the CARES Act.”
Institutions cannot use funds for the emergency aid grants to students to pay outstanding or overdue student bills to the school. ED continues “the disbursement of the emergency financial aid grant to the student must remain unencumbered by the institution; debts, charges, fees, or other amounts owed to the institution may not be deducted from the emergency financial aid grant.”
Method of Payment
Institutions must provide emergency financial aid grants to students using checks, electronic transfer payments, debit cards, and payment apps that adhere to ED’s requirements for paying credit balances to students. The grants cannot be distributed using a card that can only be used on campus or in a retail outlet affiliated with the institution.
The National Association of Student Financial Aid Administrators has created a reference sheet for the Higher Education Emergency Relief Fund. It includes a Q&A to help institutions navigate the complexities of the CARES Act grants.