COVID-19 emergency funding & its impact on HSIs
American Rescue Plan (ARP)
On March 11, 2021, the American Rescue Plan (ARP). This bill allotted $1.9 trillion to provide fast and direct economic aid to Americans impacted by the COVID-19 pandemic. Of that money, $39.6 billion was appropriated to the existing Higher Education Emergency Relief Fund (HEERF).
The bill allocates $36 billion to public and private nonprofit institutions to be available through September 30, 2023. Below are the current allowable uses:
- Public and private nonprofit institutions must spend at least 50% of their allocation on emergency financial aid grants provided directly to students to help them afford college costs and basic needs like food, housing, and health care. Institutions can use the remaining 50% to defray lost revenue and increased costs from declining enrollment, the transition to online learning, closures of revenue-producing services and facilities, and COVID-19 testing, vaccination, PPE, and classroom retrofits.
- Institutions will be solely responsible for determining which students receive emergency financial aid grants. Institutions are required to use a portion of the institutional share of new allocations to implement evidence-based practices to mitigate COVID-19 and conduct outreach to students regarding the opportunity to receive a financial aid adjustment due to the recent unemployment of a family member or other changes in financial circumstances. Restrictions that were applied exclusively to institutions subject to the endowment tax in the previous Higher Education Emergency Relief Fund will not apply to new allocations under this section.
- Funds are allocated as follows:
- 37.5% based on full-time equivalent (FTE) enrollment of Federal Pell Grant recipients.
- 37.5% based on headcount enrollment of Pell recipients.
- 11.5% based on FTE enrollment of non-Pell recipients.
- 11.5% based on headcount enrollment of non-Pell recipients.
- 1% based on the relative share of FTE enrollment of students who were Federal Pell Grant recipients and who were exclusively enrolled in distance education courses prior to the qualifying emergency.
- 1% based on the relative share of the total number of students who were Federal Pell grant recipients and who were exclusively enrolled in distance education courses prior to the qualifying emergency.
- $2.97 billion is provided to Hispanic-Serving Institutions, Historically Black Colleges and Universities, Tribal Colleges and Universities, other Minority-Serving Institutions, and other under-resourced institutions.
- $395.8 million is provided to for-profit universities to provide financial aid grants to students.
- $197.9 million is provided for institutions with the greatest unmet need related to the pandemic or those not served by the HEERF formula.
The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) was signed into law on December 27, 2020. The $2.3 trillion package includes $1.4 trillion to fund the government through the end of FY 2021 and $900 billion in COVID-19 relief.
Funding for HSIs was not cut but the nominal increases given to the 539 institutions that make up the largest cohort of Minority-Serving Institutions (MSIs), work the funding inequities that HSIs have historically endured.
Below is a sampling of appropriations for HSIs in FY 2021:
- $148.6 million for Title V, Part A
- $13.8 million for Title V, Part B
- $46.5 million for NSF - HSI Program
- $12.5 million for USDA- Education Grants for HSIs
Of the $900 billion for COVID-19 relief, $22.7 billion was allocated to the Office of Postsecondary Education as the Higher Education Emergency Relief Fund (HEERF) II.
Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748) CARES Act on March 27, 2020, which provided $2 trillion in emergency relief to address some of the worst effects of the economic downturn resulting from the coronavirus (COVID-19) pandemic. The bill provided $30.75 billion to the Department of Education for an “Education Stabilization Fund,” and allocated $13.95 billion for higher education.
The CARES Act allocated $214.53 million specifically for HSIs under Title V, which was based on the proportion of funding that HSIs were appropriated in FY 2020 discretionary funding.
HACU is pleased that HSIs were allocated funding in the CARES Act. However, HSIs have been historically underfunded and only receive, on average, 68 cents for every federal dollar going to all other colleges and universities annually despite educating a disproportionately low-income and underrepresented student population. The $214.52 million is woefully inadequate for the unprecedented challenges that HSIs are facing and will continue to face in responding to the evolving coronavirus pandemic. HACU will continue to work with Congress to increase HSI funding in subsequent emergency relief bills.
Higher Education Emergency Relief Fund (HEERF) Resources
- May 11, 2021 - HACU member advisory on Department of Education release on $36 billion in American Rescue Plan Funds
- Department of Education ARP funding allocation
- Department of Education ARP FAQs
- March 19, 2021 - HACU member advisory on Department of Education new guidance use of HEERF
- Department of Education new guidance regarding use of funds under HEERF
- March 12, 2021 - HACU member advisory on ARP Act passage
- January 14, 2021 - HACU member advisory on CRRSAA HEERF II issue guidance
- HEERF II FAQs
- August 3, 2020 - MSI community letter in response to the HEALS Act
- Department of Education - CARES Act funding guidance
- Department of Education - CARES Act supplemental FAQs
- Excelencia in Education - Analysis of CARES Act HSI Funding Formula
- May 12, 2020 - MSI community letter regarding CARES Act funding formula
- April 22, 2020 - HACU statement on exclusion of DACA students in CARES Act funding
- April 4, 2020 - MSI community letter requesting funding in HEROES Act
- March 27, 2020 - HACU statement on passage of CARES Act
- March 18, 2020 - MSI community letter requesting emergency funding
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