Legislation Passed by Congress Includes Education Stabilization Fund for Higher Education Institutions

Thoughtware Alert Published: Dec 21, 2020
Campus Landscape

Another round of relief for higher education institutions has been passed by Congress. The Emergency Coronavirus Relief Act of 2020 is legislation created by a bipartisan group that was included in a spending bill to avoid a government shutdown. This bill includes approximately $82 billion for an Education Stabilization Fund that provides more Higher Education Emergency Relief Fund (HEERF) grants to institutions. Of that amount, approximately $22.9 billion (or 28 percent) is set aside for higher education institutions. 

This amount further gets broken down into three sections:

  1. Approximately $20.4 billion to prevent, prepare for, and respond to the coronavirus. The distribution calculation of these funds is divided into six pieces:
    1. Approximately $7.6 billion (37.5 percent) will be distributed to institutions relative to their share of full-time equivalent enrollment of students who were federal Pell Grant recipients who were not exclusively enrolled in distance education courses prior to a qualifying emergency. 
    2. Approximately $7.6 billion (37.5 percent) will be distributed to institutions relative to their share of the total number of students who were federal Pell Grant recipients who were not exclusively enrolled in distance education courses prior to a qualifying emergency. 
    3. Approximately $2.3 billion (11.5 percent) will be distributed to institutions relative to their share of full-time equivalent enrollment of students who were not federal Pell Grant recipients who were not exclusively enrolled in distance education courses prior to a qualifying emergency. 
    4. Approximately $2.3 billion (11.5 percent) will be distributed to institutions relative to their share of the total number of students who were not federal Pell Grant recipients.
    5. Approximately $204 million (1 percent) will be distributed to institutions relative to their share of full-time equivalent enrollment of students who were federal Pell Grant recipients who were exclusively enrolled in distance education courses prior to a qualifying emergency.
    6. Approximately $204 million (1 percent) will be distributed to institutions relative to their share of total number of students who were federal Pell Grant recipients who were exclusively enrolled in distance education courses prior to a qualifying emergency.
  2. Approximately $1.7 billion (7.5 percent) are additional awards that will be allocated by the secretary proportionally to such programs based on the relative share of funding and may be used to defray expenses (including lost revenue, reimbursement for expenses already incurred, technology costs associated with distance education, faculty and staff trainings, and payroll) incurred by institutions and for grants to students for any component of the student’s cost of attendance appropriated to such programs in the Further Consolidated Appropriations Act of 2020
  3. Approximately $115 million (0.5 percent) will be awarded through an application process to higher education institutions that have the greatest unmet needs related to coronavirus. 
  4. Approximately $688 million (3 percent) will be allocated by the same formula for the $20.4 billion above. 

For any amounts received under this fund, higher education institutions may use the funds in the following ways:

  1. For lost revenue, reimbursement for expenses already incurred, technology costs associated with distance education, faculty and staff training, and payroll incurred by institutions;
  2. To carry out student support activities authorized by the HEA that address needs related to coronavirus; or
  3. To provide financial aid grants to students (including students exclusively enrolled in distance education). The Institution shall prioritize grants to students with exceptional need, such as students who receive Pell Grants. The grants may be used by the student for any component of the student’s cost of attendance or for emergency costs. These costs include tuition, food, housing, healthcare (including mental healthcare), or child care.  

Below is a comparison that shows the newly passed HEERF compared to the HEERF under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), passed on March 27, 2020.  

Comparison of Higher Education Emergency Relief Funds

Comparison of Higher Education Emergency Relief Funds

**While a specific percentage is not specified in the new legislation, institutions shall provide at least the same amount of funding in emergency financial aid grants to students as was required under Sections 18004(a)(1) and (c) of division B of the CARES Act.

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