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Next round of CARES Act funding for community colleges and new guidance released from Department of Education

On Tuesday, April 21, the U.S. Department of Education announced the release of an additional $6.2 billion for higher education institutions. The funding comes from the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law on Friday, March 27.

The CARES Act provides roughly $14 billion to higher education institutions, of which $12.56 billion is distributed using a formula based on student enrollment. Secretary of Education Betsy DeVos announced the first $6.28 billion for emergency financial aid grants for students in a letter to college and university presidents on April 9. On Tuesday, DeVos announced another $6.2 billion in funding for “recipient’s institutional costs.”

Higher education institutions can use these funds “to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus,” including for additional student financial aid grants. DeVos said:

“The additional funds made available today can be used to expand remote learning programs, build IT capacity, and train faculty and staff to operate in a remote learning environment so that at any moment institutions can pivot quickly. I hope that institutions that already have robust remote learning capacity will consider using this funding to support additional emergency cash grants for students.”

The full letter is below.

North Carolina community colleges will receive $120, 073,308 in total, of which $60,036,669 (roughly 50%) must be used for student financial aid. The table below outlines total funding for each college along with the minimum amount colleges must use for student aid. Read more about how the funding allocations were calculated here.

To access the institutional funding, colleges must first submit the Certification and Agreement for Emergency Financial Aid Grants to Students and then submit the Certification and Agreement for Recipient Institutional Costs. Guidance and submission procedures for both can be found here.

The Department of Education also released two “Frequently Asked Questions” documents that provide more guidance on how institutions may use the funds. Find the student financial aid grants FAQ here and the institutional costs FAQ here. Below are the key takeaways from the FAQ documents.

Student financial aid grant funding

Colleges must use this funding to give emergency financial aid grants directly to students. They cannot use it to reimburse themselves for refunds given to students or for technology they provided to students like laptops and hot spots. They also cannot use these funds to pay outstanding student bills, although students who receive the financial aid grants can use them for that purpose.

Colleges may reimburse themselves for emergency grants they gave to students only if the grants were: 1) for authorized expenses related to the disruption of campus operations due to coronavirus; 2) made to students eligible to receive emergency financial aid grants under the CARES Act; and 3) made on or after March 27, 2020.

In terms of reporting requirements, colleges must report to the Department of Education how they distributed the grants to students, how they calculated the amount of each grant, and any instructions they gave to students about the grant.

The FAQ document gives more guidance on which students are eligible to receive the emergency financial aid grants: “Only students who are or could be eligible to participate in programs under Section 484 in Title IV of the Higher Education Act of 1965, as amended (HEA), may receive emergency financial aid grants.”

It goes on to say: “The criteria to participate in programs under Section 484 of the HEA include but are not limited to the following: U.S. citizenship or eligible noncitizen; a valid Social Security number; registration with Selective Service (if the student is male); and a high school diploma, GED, or completion of high school in an approved homeschool setting.”

This includes students who have filed a Free Application for Federal Student Aid (FAFSA) or students who have not but are eligible to file a FAFSA.

Incarcerated students who are participating in the Second Chance Pell experiment and are released as a result of the coronavirus may qualify on a case-by-base basis to receive the grants.

Finally, students who were enrolled exclusively in an online program as of March 13 are not eligible to receive the grants.

Institutional costs funding

Colleges may use this funding to cover costs associated with changes in instruction due to the pandemic except for the following: “payment to contractors for the provision of pre-enrollment recruitment activities, including marketing and advertising; endowments; or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship.”

Unlike with the student financial aid grant funding, institutions may use this funding to reimburse themselves for refunds provided to students for room and board, tuition, other fees, or any other refunds to students after March 13 made as a result of changes in instructional delivery. They can also use this funding to reimburse themselves for technology purchased after March 13 and to purchase additional equipment, pay for online licensing fees, or pay for internet service for students.

Institutions can use this funding to provide additional emergency financial aid grants to students, however the restrictions on grants to exclusively online students still hold.

Many colleges are wondering if they can use the funds for future tuition. The FAQ document states: “It depends … As long as awarding scholarships and providing payment for future academic terms are costs associated with significant changes to the delivery of instruction due to the coronavirus or, if provided to students in the form of emergency financial aid, are for expenses related to the disruption of campus operations due to coronavirus, such uses are allowable.”

The document states colleges should be prepared to report how they used the institutional costs funding, including the amount used for student reimbursements. For both the institutional costs funding and the emergency financial aid grant funding, the Department of Education will publish notices in the Federal Register to provide instructions on reporting requirements.

Molly Osborne Urquhart

Molly Osborne is the vice president and Chief Operating Officer for EducationNC.