Q. What is the Higher Education Emergency Relief Fund?
A. As a result of the COVID-19 pandemic, Congress passed the $2 trillion COVID-19 relief package. The Coronavirus Aid, Relief and Economic Security Act (CARES Act) signed into law by President Trump on March 27 includes a $30.75 billion Education Stabilization Fund, with a $14 billion carve-out called the Higher Education Emergency Relief Fund (section 18004). The funds are provided “to each institution of higher education to prevent, prepare for, and respond to coronavirus.” According to the DOE letter released on April 9, 2020, “The most significant portion of that funding allocation provides that $12.56 billion will be distributed to institutions using a formula based on student enrollment.”
Specific carve-outs exist for minority-serving institutions and small institutions within the $14 billion, and another $3 billion available for state governors to distribute (section 18002). For ACE’s quick summary, click here.
Q. How will the Higher Education Relief Fund dollars be distributed?
A. The bill stipulates that funding will be distributed by the Secretary in the same manner that other Title IV aid is distributed — 75% of all FTE Pell Grant recipients and 25% of all FTE non-Pell Grant recipients. Students who were enrolled exclusively in online, distance education courses prior to the COVID-19 emergency will be excluded from this calculation.
Q. How much of the $14 billion will my institution receive?
A. (Updated – April 9, 2020) The U.S. Department of Education has released its plan for distributing $14 billion of the federal stimulus to colleges and universities. The list of planned allocations for each institution can be found here.
Q. Does my institution need to submit anything or apply to receive our allocated dollars?
A. (Updated – April 9, 2020) Yes. In order to access these funds, all institutions must sign and return the Certificate of Funding and Agreement via grants.gov Applicant Registration, acknowledging the terms and conditions of the funding.
Q. When will my institution receive its allocated funds?
A. (Updated – April 9, 2020) After the Department has received the certificate for the student portion, institutions may draw down their emergency assistance funds using the Department’s G5 system for the student portion. The Department of Education is working expeditiously to allocate the remaining funding that is reserved for institutional use, and there will be further details on how institutions may apply for this institutional funding, as well as for other emergency funding, in the coming days.
Q. What are the guidelines regarding the use of these funds?
A. According to the CARES Act, institutions of higher education can use 50% of the funds for institutional purposes and must use 50% of the funds for student purposes. Specifically, the act says that the institutional funds are “to prevent, prepare for, and respond to coronavirus” so long as such costs do not include payment to contractors for the provision of pre-enrollment recruitment activities, endowments, or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship.
At minimum, the CARES Act requires each institution to allocate 50% percent of all relief funds received to provide for emergency aid to students in response to disruption of campus operations due to coronavirus. Healthcare is included as an eligible expense.
Q. Does this mean I can use a portion of these dollars to fund a TimelyMD telehealth program for my students?
A. Yes. The TimelyMD team has engaged with healthcare and higher education consultants along with relevant legal counsel on this topic. Their collective review of the Higher Education Emergency Relief Fund concluded unanimously that a telehealth program to take care of your students’ physical and mental health needs, as they are all dispersed across the nation, is a good example of the purpose for which these funds are intended. There are short-term and long-term telehealth programs available.
Q. Do I need to wait for the funds to arrive to launch a telehealth program for my students?
A. No. We are happy to draft an agreement and launch your program now to immediately address the student healthcare needs that your institution faces while delaying all invoices for your telehealth program until relief funds are made available to you.
*Please note this summary is not a comprehensive summary of the CARES Act or Higher Education Relief Fund. There are also tax provisions, employee retention credits, and other opportunities for your institution to examine in relation to leveraging federal aid available in response to COVID-19. Should you need expert advice in this area, please reach out to us, as we have resources and consultants we are happy to share with you.