On April 9, the Department of Education released highly-anticipated guidance on the process higher education institutions will use to access portions of the nearly $14 billion allocated to them through the CARES Act. Education Secretary Betsy DeVos sent a letter to college and university presidents to provide instructions for accessing the initial round of these relief funds, which represent 50% of the total amount allocated to each institution. This first allocation can be used exclusively for providing emergency grants to students; details on the remaining funds designated for institutional use are forthcoming.

In order to access CARES Act funds, higher education institutions must sign and return the DOE’s Certificate of Funding and Agreement via grants.gov, acknowledging the terms and conditions of the funding. After the Department has received the certificate, institutions may use the Department’s G5 system to draw down their funds.

Notable provisions of the Certification and Agreement include:

• A reminder that the CARES Act requires Recipients to use no less than 50% of the total funds received to provide emergency financial aid grants to students for expenses related to the disruption of campus operations due to coronavirus (including eligible expenses under a student’s cost of attendance such as food, housing, course materials, technology, healthcare, and child care). 
• A warning that recipient institutions shall not use the advanced funds to reimburse themselves for any costs or expenses, including but not limited to any costs associated with significant changes to the delivery of instruction due to the coronavirus and/or any refunds or other benefits that Recipients previously issued to students.
• The recognition that colleges and universities retain discretion to determine the amount of each individual emergency financial aid grant consistent with all applicable laws including non-discrimination laws, although the maximum Pell Grant is suggested as an appropriate maximum amount for a student’s emergency financial aid grant.
  • Schools are encouraged to be mindful of each student’s individual socioeconomic situation in administering grants, and to use professional judgment to make any individual adjustments on a case-by-case basis to exclude these grants from the calculation of a student’s expected family contribution.
• Two distinct reporting requirements:
  • Schools must report 30 days from the date on their Certification and Agreement and every 45 days thereafter the following info: how grants were distributed to students, the amount of each grant awarded to each student, how the amount of each grant was calculated, and any instructions or directions given to students about the grants.
  • Recipient schools must also document that they have, to the greatest extent practicable, continued to pay all of their employees and contractors during the period of any disruptions or closures.
• A stipulation that schools should distribute funds to students as quickly as possible, but at least within a year from the signing of the Certification.

The DOE also published a chart containing the total allocation amount each college or university can expect to receive from the Higher Education Emergency Relief Fund, along with a dollar figure representing the minimum allocation that must be awarded to that institution’s students in the form of emergency financial aid grants. 

DeVos also stated that the DOE is working to “allocate the remaining funding that is reserved for institutional use, and we will provide details on how institutions may apply for this institutional funding, as well as for other emergency funding, in the coming days.”

If you have any questions or would like assistance in understanding your institution’s allocation under the CARES Act, please contact Dan Cohen, Lexi Trumble, or any members of the Nelson Mullins Education Team.