Guidance Updated for Higher Education Emergency Relief Fund (HEERF I, II, & III)
On May 11, 2021, the U.S. Department of Education (ED) released additional guidance for higher education institutions related to the Higher Education Emergency Relief Fund (HEERF) III, authorized by the American Rescue Plan Act of 2021 (ARPA), which covers financial assistance to institutions and the distribution of emergency grants to students. The new guidance updates and supplements prior information ED released.
New Required Uses of Funds
ED stated in its frequently asked questions (FAQ) document that institutions must spend the institutional portion of HEERF III grant funds to “implement evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines.” This requirement doesn’t prescribe any specific practices or strategies, nor does it set a specific threshold or amount of an institution’s ARPA (a)(1) Institutional Portion. The FAQ document provides a few examples that include testing, prevention, reducing barriers to vaccination, and student support. The Centers for Disease Control and Prevention has developed resources specific to higher education institutions.
A second ED requirement is that institutions must spend the institutional portion of HEERF III grant funds to “conduct direct outreach to financial aid applicants about the opportunity to receive a financial aid adjustment due to the recent unemployment of a family member or independent student, or other circumstances.” ED states that financial aid administrators may use professional judgment to disseminate this opportunity widely. The FAQ provides a few examples of direct outreach to include emails, direct mailings, phone communications, webinars, and in-person interviews or meetings.
The FAQ provides five key areas of documentation related to the new required uses of the HEERF III funds toward evidence-based practices and direct outreach. Institutions should document how they implemented these required activities as follows:
- Strategies used to monitor and suppress COVID-19
- Evidence to support those strategies
- Strategy alignment with public health guidelines
- Manner and extent of direct outreach
- How the amounts spent were reasonable and necessary given the institution’s unique needs and circumstances
ARPA has revised the definition of student to include any individual who is or was enrolled at an eligible institution on or after March 13, 2020. These students are no longer required to be eligible for Title IV financial aid to receive any HEERF grants to students. The new guidance opens up grant funding to undocumented and international students.
Capital Projects Added to the Unallowable Use List
New guidance added construction and purchase of real property to the list of unallowable uses for the HEERF I, II, and III institutional portion. In previous guidance, only capital outlays associated with athletic facilities, sectarian instruction, or religious worship were excluded. ED prohibits HEERF grant funds for capital projects such as deferred maintenance and capital improvements. However, HEERF grant funds may be used for “minor remodeling” such as HVAC renovations and installations to help filtration to prevent the spread of COVID-19, the purchase or lease of temporary trailers, and the purchase and installation of “room dividers” within a previously completed building to increase social distancing.
Grant Period & No-Cost Extension
Institutions that received a supplemental award under ARPA have one year to spend all remaining HEERF funds from the date their ARPA award is made. The specific period of performance will be indicated on Box 6 of your GAN document. ED has provided a no-cost extension (NCE) of up to 12 months. The NCEs may not be used “merely for the purpose of using unobligated balances.”
As with most topics related to COVID-19, changes are being made rapidly. Please note that this information is current as of the date of publication. For more information, reach out to your BKD Trusted Advisor™ or submit the Contact Us form below.