Guide for the Distribution of the Student and Institutional Portions of the Higher Education Emergency Relief Fund
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In the midst of the Coronavirus pandemic, the proprietary school sector has a unique opportunity. The federal government has included our schools in the Emergency Stabilization Fund for institutions of higher education authorized by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Starting the week of April 13, 2020, institutions are provided the opportunity to direct critical Higher Education Emergency Relief Fund (“HEERF”) grants to those eligible students most impacted by the pandemic. This guide, developed with the assistance of sector leaders, supports institutions in understanding what they should know regarding the student and institutional portions of the HEERF, provides example formulas for the distribution of emergency financial aid grants to students, includes a sample grant application form, and lists general principles institutions should consider. This guide will be updated regularly based on ongoing stakeholder feedback and federal updates, so institutions are encouraged to check back often. For questions or concerns related to the guide or the Higher Education Emergency Relief Fund, please do not hesitate to contact CECU staff at GovernmentRelations@career.org.
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CARES Q&A |
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Question: Can an institution draw down to its bank account its entire allocation from the Higher Education Emergency Relief Fund (“HEERF”) even if a certain amount of the funds will not be spent for several months?
Answer: It appears not. According to an institution’s Grant Award Notification, institutions are required to minimize the amount of time between the drawdown from G5 and the expenditure of funds from its bank account. Funds must be drawn only to meet an institution’s immediate cash needs. Additionally, during a June 23, 2020 technical assistance webinar hosted by the U.S. Department of Education, Department staff indicated that interest earned by an institution on its HEERF funds in excess of $500 must be returned to the federal government.
Question: Is there a deadline by which the institutional portion of the Higher Education Emergency Relief Fund (“HEERF”) must be used?
Answer: Yes. Similar to the student portion of the HEERF (see the May 8, 2020 Q&A), institutions generally have one year from the date the Certification and Agreement is signed to use the institutional portion. Efforts to “promptly” use the institutional portion will be part of regular reporting to the Department.
Question: Can an institution use funds from the institutional portion of the Higher Education Emergency Relief Fund (“HEERF”) to pay for costs incurred in February 2020 as a result of the coronavirus pandemic?
Answer: No. The Certification and Agreement at Sec. 4(d) states that the institutional portion of the HEERF can only be used to pay for costs first incurred on or after March 13, 2020, the date of the President’s Proclamation of National Emergency.
Question: What is the impact on a student’s Pell Grant lifetime eligibility used and Subsidized Loan usage limits for the semester that he or she does not complete due to the coronavirus pandemic?
Answer: Sec. 3506 and Sec. 3507 of the CARES Act provides discretion to the Secretary on whether to exclude Pell lifetime eligibility requirements, subsidized usage requirements, and loan obligations for any semester (or the equivalent) that a student does not complete due to a qualifying emergency. The May 15, 2020 guidance issued by the U.S. Department of Education suggests the Secretary intends to provide such relief to students.
Question: Is an institution required to perform an R2T4 calculation for a student who withdraws and qualifies for the R2T4 waiver under the CARES Act?
Answer: Yes. According to the May 15, 2020 guidance issued by the U.S. Department of Education, institutions must continue to perform an R2T4 calculation for each student covered by the CARES Act R2T4 waiver.
Question: Is an institution eligible for the R2T4 waiver provision under the CARES Act for a student who withdrew during a payment period that did not include March 13, 2020 but who nonetheless withdrew as a result of coronavirus?
Answer: No. According to the May 15, 2020 guidance issued by the U.S. Department of Education, the Secretary will waive the statutory requirement for institutions to return unearned Title IV funds for any student who begins attendance in a payment period or period of enrollment that begins on or includes March 13, 2020 and subsequently withdraws from the period as a result of COVID-19-related circumstances.
Question: Has a due date for the first report on the institutional portion of the Higher Education Emergency Relief Fund (“HEERF”) been announced?
Answer: No. Unlike the student portion of the HEERF, the U.S. Department of Education has not yet published detailed instructions on the reporting requirements or due date(s) for the institutional portion beyond those listed in the Certification and Agreement at Sec. 4(e) and the April 21, 2020 FAQ. In the interim, institutions should keep detailed records of how they are expending the institutional portion of the HEERF, including: total amount of institutional funds received from the Department; amount of funds received that were expended or obligated for each project or activity (including accounting for the amount of reimbursements to the institution for costs related to refunds made to students for housing, food, or other services that the institution could no longer provide); a detailed list of all projects or activities for which funds were expended or obligated, including the name of the project or activity, a description of the project or activity, and the estimated number of jobs created or retained by the project or activity, where applicable; and detailed information on any level of sub-contracts or subgrants awarded by the institution or its subcontractors or subgrantees. Institutions should also maintain a description of the internal controls in place to ensure that the institutional portion was used for allowable purposes and in accordance with cash management principles.
Question: Can an institution use work study funds to provide additional emergency financial aid grants to students?
Answer: No. However, pursuant to Sec. 3503(b) of the CARES Act, an institution can transfer, during the period of a qualifying emergency, up to 100 percent of its unexpended Federal Work-Study allotment to its Federal Supplemental Educational Opportunity Grants allotment. Sec. 3504(a) then allows an institution to use the funds transferred from FWS to FSEOG to award additional financial aid grants to assist undergraduate or graduate students with unexpected expenses and unmet financial need as a result of a qualifying emergency.
Question: How long should an institution keep records related to its student portion from the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: When an institution signed and submitted its Certification and Agreement, it agreed to comply with specific record retention requirements at 2 CFR 200.333. With certain exceptions, institutions are required to retain financial records, supporting documents, statistical records, and all other records pertinent to the student portion from the HEERF for at least three years from the date of submission of the final expenditure report.
Question: Can an institution use part of its allocation from the Higher Education Emergency Relief Fund (“HEERF”) to pay for in-service training for faculty related to improving the online learning experience for students?
Answer: Yes. According to an April 21, 2020 briefing with higher education stakeholders, Secretary DeVos indicated that institutions could use the institutional portion of the HEERF (but not the student portion) to train their faculty and staff to function at higher levels in an online learning environment.
Question: Can a term-based institution offer leaves of absence (“LOA”) for Title IV purposes as a result of COVID-19 related circumstances?
Answer: Yes. Sec. 3508(d) of the CARES Act, as well as the May 15, 2020 guidance issued by the U.S. Department of Education, waives the requirement for term-based programs that a student returning from an approved LOA must resume training at the same point in the academic program that he or she began the LOA.
Question: Is an institution required to obtain receipts from a student evidencing that he or she used an emergency financial aid grant from the Higher Education Emergency Relief Fund (“HEERF”) for an eligible expense (e.g., food, housing, course materials, technology, health care, child care)?
Answer: No. According to an April 21, 2020 briefing with higher education stakeholders, a high ranking official from the U.S. Department of Education stated that the Department is not requiring that students track how they use their emergency financial aid grants and not requiring that institutions report how students use their grants. Although not required by the Department, an institution could choose to require submission of receipts as part of its criteria for awarding an emergency financial aid grant.
Question: Is a student’s emergency financial aid grant from the Higher Education Emergency Relief Fund (“HEERF”) treated as estimated financial assistance?
Answer: No. According to the April 3, 2020 guidance published by the U.S. Department of Education, any aid in the form of grants or low-interest loans received by victims of an emergency from a federal or state entity to provide financial relief is not counted as income for calculating a family’s Expected Family Contribution under the Federal Methodology or as estimated financial assistance for packaging purposes.
Question: If an institution is not interested in using its student and/or institutional allocations under the Higher Education Emergency Relief Fund (“HEERF”), can it gift the funds to another institution?
Answer: Although the April 9, 2020 letter from Secretary DeVos to college and university presidents contemplates the ability of “giving your [student] allocation to those institutions within your state or region that might have significant need,” it is unclear without additional guidance how this would work operationally and what liability would remain with the gifting institution. CECU recommends that if an institution does not intend to use its HEERF allocations, simply do not apply for the funds. If an institution has already received its funds in G5 and then decides not to use them, contact the U.S. Department of Education as soon as possible at HEERF@ed.gov to inquire how to return them properly.
Question: Is a new student allowed to receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: It depends. Although there is currently no prohibition on a new student receiving an emergency financial aid grant under the HEERF, the institution would need to determine, pursuant to Sec. 18004(c) of the CARES Act, whether the student had expenses related to the disruption of campus operations. For example, a new student who starts his or her program online from the beginning may not have any eligible expenses related to the disruption of campus operations.
Question: Is there a required template that an institution must use to report its information for the initial 30-day Fund Report on the student portion of the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: No. Although the May 6, 2020 electronic announcement published by the U.S. Department of Education lists certain information that institutions must include in their initial 30-day Fund Report (and each 45-day Fund Report thereafter), there is no required template that must be used. However, CECU has developed a user-friendly reporting template that institutions can voluntarily use to report the seven items required by the Department.
Question: Where on an institution’s website must the initial 30-day Fund Report on the student portion of the Higher Education Emergency Relief Fund (“HEERF”) be posted?
Answer: According to the U.S. Department of Education, the initial 30-day Fund Report (and each 45-day Fund Report thereafter) must be posted to an institution’s “primary website” and in a format and location that is “easily accessible” to the public. Although the Department does not dictate where on an institution’s website the Fund Report must be posted, institutions should choose a location that students and the public will be able to find easily.
Question: Can a student receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”) if he or she was enrolled on March 13, 2020 but has since withdrawn from the institution because of coronavirus?
Answer: No. According to the April 21, 2020 FAQ published by the U.S. Department of Education, only students who are or could be eligible to participate in the Title IV programs may receive an emergency financial aid grant under the HEERF. One eligibility criterion under Sec. 484 of the Higher Education Act is that a student must “be enrolled or accepted for enrollment in a degree, certificate, or other program…” We understand some institutions may decide to take a more liberal reading of the Department’s FAQ or HEA; however, institutions should understand the risk and potential liability associated with this approach.
Question: Is an emergency financial aid grant from the Higher Education Emergency Relief Fund (“HEERF”) considered taxable income for a student?
Answer: No. According to the May 7, 2020 FAQ published by the Internal Revenue Service, emergency financial aid grants from the HEERF are not taxable income for students when used for eligible expenses.
Question: Does CECU know of any proprietary institution that has received its institutional portion under the Higher Education Emergency Relief Fund (HEERF) yet? Our institution applied on April 21, 2020, the first day the application was available on grants.gov, but we still have not received funds.
Answer: Yes. CECU is aware of several proprietary institutions that have received their institutional portion under the HEERF. As a reminder, a prerequisite of receiving the institutional portion is an institution must have first applied for the student portion.
Question: Is there a time constraint on how long an institution has to distribute its student portion of the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: Yes. Although institutions generally have one year from the date the Certification and Agreement is signed to distribute the student portion of the HEERF, schools should “promptly” distribute these stabilization funds according to the U.S. Department of Education. Institutions will be responsible for documenting their efforts to promptly distribute these funds as part of regular reporting to the Department.
Question: When must an institution submit its first report on the allocations it received under the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: According to a May 6, 2020 electronic announcement published by the U.S. Department of Education, instructions for reporting to the Department on the HEERF will be forthcoming (in a Federal Register notice). However, in the meantime, the Department is requiring institutions to disclose on their websites information on the student portion. The first disclosure must be posted to an institution’s website 30 days after the date when the school received its student allocation and updated every 45 days thereafter. The items that must be disclosed on an institution’s website include: acknowledgement the institution signed and returned the Certification and Agreement and the assurance the institution has used, or intends to use, no less than 50 percent of the funds for emergency financial aid grants; total amount of funds that will be or has been received; total amount of funds distributed to students; estimated total number of students eligible to participate in Title IV; total number of students who have received an emergency financial aid grant; the method(s) used to determine which students receive emergency financial aid grants and how much they would receive; and any instructions, directions, or guidance provided by the institution to students concerning the grants.
Question: Can an institution use the institutional portion of its allocation under the Higher Education Emergency Relief Fund (“HEERF”) to provide an emergency financial aid grant to a student who is not Title IV eligible?
Answer: No. According to the U.S. Department of Education, regardless of whether an emergency financial aid grant is provided using the student portion or institutional portion of funds under the HEERF, the same Title IV eligibility criteria apply. In other words, only students who are or could be eligible to participate in Title IV may receive emergency financial aid grants.
Question: Can a student who is eligible for Title IV receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”) if he or she is enrolled in an ineligible program? For example, we have a student enrolled in a 200 clock hour program.
Answer: Unclear. Although we do not believe a student enrolled in an ineligible program is eligible to receive an emergency financial aid grant under the HEERF, we submitted this question to the U.S. Department of Education on April 22, 2020 for confirmation. We will update this answer once a response is received.
Question: Is a Title IV student who is currently enrolled in a hybrid program eligible to receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”) if he or she was enrolled only in online courses on March 13, 2020, the date the President declared a national emergency due to coronavirus?
Answer: Yes, provided the student also meets all other eligibility criteria. In this scenario, the student was not enrolled exclusively in an online program on March 13, 2020 but instead online courses that are part of his or her hybrid program. The April 21, 2020 FAQ published by the U.S. Department of Education states that those students who were enrolled exclusively in an online program on March 13, 2020 are not eligible for emergency financial aid grants under the HEERF.
Question: Can an institution use the institutional portion of its allocation under the Higher Education Emergency Relief Fund (“HEERF”) to make additional emergency financial aid grants to students?
Answer: Yes! In fact, the U.S. Department of Education is strongly urging institutions to consider using some or all of their institutional portion under the HEERF to provide additional emergency financial aid grants to students for expenses related to the disruption of campus operations due to coronavirus.
Question: Can a student who lost Title IV eligibility due to not making satisfactory academic progress receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: No. If a student is presently enrolled at an institution but has lost Title IV eligibility due to not making satisfactory academic progress, he or she would not be eligible for an emergency financial aid grant under the HEERF.
Question: Can a recent graduate receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”) if he or she was enrolled on March 13, 2020 but has since graduated?
Answer: No. According to the April 21, 2020 FAQ published by the U.S. Department of Education, only students who are or could be eligible to participate in the Title IV programs may receive an emergency financial aid grant under the HEERF. One eligibility criterion under Sec. 484 of the Higher Education Act is that a student must “be enrolled or accepted for enrollment in a degree, certificate, or other program…”
Question: Does CECU know of any proprietary institution that has received its student allocation under the Higher Education Emergency Relief Fund (HEERF) yet? Our institution applied on April 10, 2020, the first day the application was available on grants.gov, but we still have not received funds.
Answer: Yes. Although CECU is aware of a few proprietary institutions that have received their student allocation under the HEERF, we also understand many institutions that submitted a complete application are still waiting on the U.S. Department of Education to make funds available through G5.
Question: Is a student that is on an approved leave of absence according to 34 CFR 668.22(d) eligible to receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (HEERF)?
Answer: Yes.
Question: Will allocations received by a proprietary institution under the Higher Education Emergency Relief Fund (“HEERF”) count as revenue for the 90/10 test?
Answer: No. The U.S. Department of Education has explicitly stated that the Secretary does not consider HEERF allocations as Federal financial aid under Title IV of the Higher Education Act. As a result, HEERF allocations paid directly to institutions by the Department will not be included as revenue for 90/10 purposes.
Question: Can an institution distribute emergency financial aid grant funds to their students under the Higher Education Emergency Relief Fund (“HEERF”) using debit cards?
Answer: Yes. According to the April 21, 2020 FAQ published by the U.S. Department of Education, institutions may distribute emergency financial aid grants to their students using debit cards, credit cards, checks, electronic transfer payments, and payment apps.
Question: Are there reporting requirements for an institution that distributes emergency financial aid grant funds to their students under the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: Yes. According to the Certification and Agreement at Section 4(c), institutions that provide emergency financial aid grant funds to their students under the HEERF are required to regularly report to the U.S. Department of Education how the 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. The Department has indicated it will publish instructions in the Federal Register on these reporting requirements.
Question: Will an institution that does not participate in the Title IV programs receive an allocation under the Higher Education Emergency Relief Fund (“HEERF”) since the institution is approved by its respective State authorization agency and is accredited?
Answer: It appears not. According to the U.S. Department of Education’s methodology for calculating amounts under Sec. 18004(a)(1) of the CARES Act, institutions that are currently ineligible or were not participating in Title IV per the IPEDS data are excluded from receiving an allocation under the HEERF.
Question: Is there a maximum grant amount an institution can award to a student under the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: No. However, the U.S. Department of Education recommends institutions consider the current maximum Pell Grant of $6,195 as an appropriate maximum amount for a student’s emergency financial aid grant under the HEERF to ensure funds are distributed as widely as possible.
Question: Can an institution evenly split across all enrolled students the emergency financial aid grant funds under the Higher Education Emergency Relief Fund (“HEERF”)? For example, every student receives a $1,300 grant.
Answer: It depends. Although there is no prohibition on an institution distributing its emergency financial aid grant funds under the HEERF evenly across all their students, an institution is still responsible for determining (and documenting) that each student is individually eligible for the grant.
Question: Can an institution use emergency financial aid grant funds under the Higher Education Emergency Relief Fund (“HEERF”) to reimburse itself for costs it incurred because of Coronavirus? For example, is an institution allowed to reimburse itself for laptops it purchased last month so students could continue their education online?
Answer: No. Based on guidance CECU received on April 9, 2020 from the U.S. Department of Education, as well as the Certification and Agreement, an institution is prohibited from using the first 50 percent of its formula allocation under the HEERF to reimburse itself for any costs, expenses, or refunds previously issued to students. This first 50 percent allocation is for the sole purpose of providing emergency financial aid grants directly to students.
Question: Can an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”) be awarded to a student who is not a Title IV recipient?
Answer: Yes. Any student attending your institution that meets the HEERF eligibility criteria may receive an emergency financial aid grant for expenses related to the disruption of campus operations due to Coronavirus (e.g., food, housing, course materials, technology, health care, child care).
Answer: It appears not. According to an institution’s Grant Award Notification, institutions are required to minimize the amount of time between the drawdown from G5 and the expenditure of funds from its bank account. Funds must be drawn only to meet an institution’s immediate cash needs. Additionally, during a June 23, 2020 technical assistance webinar hosted by the U.S. Department of Education, Department staff indicated that interest earned by an institution on its HEERF funds in excess of $500 must be returned to the federal government.
Question: Is there a deadline by which the institutional portion of the Higher Education Emergency Relief Fund (“HEERF”) must be used?
Answer: Yes. Similar to the student portion of the HEERF (see the May 8, 2020 Q&A), institutions generally have one year from the date the Certification and Agreement is signed to use the institutional portion. Efforts to “promptly” use the institutional portion will be part of regular reporting to the Department.
Question: Can an institution use funds from the institutional portion of the Higher Education Emergency Relief Fund (“HEERF”) to pay for costs incurred in February 2020 as a result of the coronavirus pandemic?
Answer: No. The Certification and Agreement at Sec. 4(d) states that the institutional portion of the HEERF can only be used to pay for costs first incurred on or after March 13, 2020, the date of the President’s Proclamation of National Emergency.
Question: What is the impact on a student’s Pell Grant lifetime eligibility used and Subsidized Loan usage limits for the semester that he or she does not complete due to the coronavirus pandemic?
Answer: Sec. 3506 and Sec. 3507 of the CARES Act provides discretion to the Secretary on whether to exclude Pell lifetime eligibility requirements, subsidized usage requirements, and loan obligations for any semester (or the equivalent) that a student does not complete due to a qualifying emergency. The May 15, 2020 guidance issued by the U.S. Department of Education suggests the Secretary intends to provide such relief to students.
Question: Is an institution required to perform an R2T4 calculation for a student who withdraws and qualifies for the R2T4 waiver under the CARES Act?
Answer: Yes. According to the May 15, 2020 guidance issued by the U.S. Department of Education, institutions must continue to perform an R2T4 calculation for each student covered by the CARES Act R2T4 waiver.
Question: Is an institution eligible for the R2T4 waiver provision under the CARES Act for a student who withdrew during a payment period that did not include March 13, 2020 but who nonetheless withdrew as a result of coronavirus?
Answer: No. According to the May 15, 2020 guidance issued by the U.S. Department of Education, the Secretary will waive the statutory requirement for institutions to return unearned Title IV funds for any student who begins attendance in a payment period or period of enrollment that begins on or includes March 13, 2020 and subsequently withdraws from the period as a result of COVID-19-related circumstances.
Question: Has a due date for the first report on the institutional portion of the Higher Education Emergency Relief Fund (“HEERF”) been announced?
Answer: No. Unlike the student portion of the HEERF, the U.S. Department of Education has not yet published detailed instructions on the reporting requirements or due date(s) for the institutional portion beyond those listed in the Certification and Agreement at Sec. 4(e) and the April 21, 2020 FAQ. In the interim, institutions should keep detailed records of how they are expending the institutional portion of the HEERF, including: total amount of institutional funds received from the Department; amount of funds received that were expended or obligated for each project or activity (including accounting for the amount of reimbursements to the institution for costs related to refunds made to students for housing, food, or other services that the institution could no longer provide); a detailed list of all projects or activities for which funds were expended or obligated, including the name of the project or activity, a description of the project or activity, and the estimated number of jobs created or retained by the project or activity, where applicable; and detailed information on any level of sub-contracts or subgrants awarded by the institution or its subcontractors or subgrantees. Institutions should also maintain a description of the internal controls in place to ensure that the institutional portion was used for allowable purposes and in accordance with cash management principles.
Question: Can an institution use work study funds to provide additional emergency financial aid grants to students?
Answer: No. However, pursuant to Sec. 3503(b) of the CARES Act, an institution can transfer, during the period of a qualifying emergency, up to 100 percent of its unexpended Federal Work-Study allotment to its Federal Supplemental Educational Opportunity Grants allotment. Sec. 3504(a) then allows an institution to use the funds transferred from FWS to FSEOG to award additional financial aid grants to assist undergraduate or graduate students with unexpected expenses and unmet financial need as a result of a qualifying emergency.
Question: How long should an institution keep records related to its student portion from the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: When an institution signed and submitted its Certification and Agreement, it agreed to comply with specific record retention requirements at 2 CFR 200.333. With certain exceptions, institutions are required to retain financial records, supporting documents, statistical records, and all other records pertinent to the student portion from the HEERF for at least three years from the date of submission of the final expenditure report.
Question: Can an institution use part of its allocation from the Higher Education Emergency Relief Fund (“HEERF”) to pay for in-service training for faculty related to improving the online learning experience for students?
Answer: Yes. According to an April 21, 2020 briefing with higher education stakeholders, Secretary DeVos indicated that institutions could use the institutional portion of the HEERF (but not the student portion) to train their faculty and staff to function at higher levels in an online learning environment.
Question: Can a term-based institution offer leaves of absence (“LOA”) for Title IV purposes as a result of COVID-19 related circumstances?
Answer: Yes. Sec. 3508(d) of the CARES Act, as well as the May 15, 2020 guidance issued by the U.S. Department of Education, waives the requirement for term-based programs that a student returning from an approved LOA must resume training at the same point in the academic program that he or she began the LOA.
Question: Is an institution required to obtain receipts from a student evidencing that he or she used an emergency financial aid grant from the Higher Education Emergency Relief Fund (“HEERF”) for an eligible expense (e.g., food, housing, course materials, technology, health care, child care)?
Answer: No. According to an April 21, 2020 briefing with higher education stakeholders, a high ranking official from the U.S. Department of Education stated that the Department is not requiring that students track how they use their emergency financial aid grants and not requiring that institutions report how students use their grants. Although not required by the Department, an institution could choose to require submission of receipts as part of its criteria for awarding an emergency financial aid grant.
Question: Is a student’s emergency financial aid grant from the Higher Education Emergency Relief Fund (“HEERF”) treated as estimated financial assistance?
Answer: No. According to the April 3, 2020 guidance published by the U.S. Department of Education, any aid in the form of grants or low-interest loans received by victims of an emergency from a federal or state entity to provide financial relief is not counted as income for calculating a family’s Expected Family Contribution under the Federal Methodology or as estimated financial assistance for packaging purposes.
Question: If an institution is not interested in using its student and/or institutional allocations under the Higher Education Emergency Relief Fund (“HEERF”), can it gift the funds to another institution?
Answer: Although the April 9, 2020 letter from Secretary DeVos to college and university presidents contemplates the ability of “giving your [student] allocation to those institutions within your state or region that might have significant need,” it is unclear without additional guidance how this would work operationally and what liability would remain with the gifting institution. CECU recommends that if an institution does not intend to use its HEERF allocations, simply do not apply for the funds. If an institution has already received its funds in G5 and then decides not to use them, contact the U.S. Department of Education as soon as possible at HEERF@ed.gov to inquire how to return them properly.
Question: Is a new student allowed to receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: It depends. Although there is currently no prohibition on a new student receiving an emergency financial aid grant under the HEERF, the institution would need to determine, pursuant to Sec. 18004(c) of the CARES Act, whether the student had expenses related to the disruption of campus operations. For example, a new student who starts his or her program online from the beginning may not have any eligible expenses related to the disruption of campus operations.
Question: Is there a required template that an institution must use to report its information for the initial 30-day Fund Report on the student portion of the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: No. Although the May 6, 2020 electronic announcement published by the U.S. Department of Education lists certain information that institutions must include in their initial 30-day Fund Report (and each 45-day Fund Report thereafter), there is no required template that must be used. However, CECU has developed a user-friendly reporting template that institutions can voluntarily use to report the seven items required by the Department.
Question: Where on an institution’s website must the initial 30-day Fund Report on the student portion of the Higher Education Emergency Relief Fund (“HEERF”) be posted?
Answer: According to the U.S. Department of Education, the initial 30-day Fund Report (and each 45-day Fund Report thereafter) must be posted to an institution’s “primary website” and in a format and location that is “easily accessible” to the public. Although the Department does not dictate where on an institution’s website the Fund Report must be posted, institutions should choose a location that students and the public will be able to find easily.
Question: Can a student receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”) if he or she was enrolled on March 13, 2020 but has since withdrawn from the institution because of coronavirus?
Answer: No. According to the April 21, 2020 FAQ published by the U.S. Department of Education, only students who are or could be eligible to participate in the Title IV programs may receive an emergency financial aid grant under the HEERF. One eligibility criterion under Sec. 484 of the Higher Education Act is that a student must “be enrolled or accepted for enrollment in a degree, certificate, or other program…” We understand some institutions may decide to take a more liberal reading of the Department’s FAQ or HEA; however, institutions should understand the risk and potential liability associated with this approach.
Question: Is an emergency financial aid grant from the Higher Education Emergency Relief Fund (“HEERF”) considered taxable income for a student?
Answer: No. According to the May 7, 2020 FAQ published by the Internal Revenue Service, emergency financial aid grants from the HEERF are not taxable income for students when used for eligible expenses.
Question: Does CECU know of any proprietary institution that has received its institutional portion under the Higher Education Emergency Relief Fund (HEERF) yet? Our institution applied on April 21, 2020, the first day the application was available on grants.gov, but we still have not received funds.
Answer: Yes. CECU is aware of several proprietary institutions that have received their institutional portion under the HEERF. As a reminder, a prerequisite of receiving the institutional portion is an institution must have first applied for the student portion.
Question: Is there a time constraint on how long an institution has to distribute its student portion of the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: Yes. Although institutions generally have one year from the date the Certification and Agreement is signed to distribute the student portion of the HEERF, schools should “promptly” distribute these stabilization funds according to the U.S. Department of Education. Institutions will be responsible for documenting their efforts to promptly distribute these funds as part of regular reporting to the Department.
Question: When must an institution submit its first report on the allocations it received under the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: According to a May 6, 2020 electronic announcement published by the U.S. Department of Education, instructions for reporting to the Department on the HEERF will be forthcoming (in a Federal Register notice). However, in the meantime, the Department is requiring institutions to disclose on their websites information on the student portion. The first disclosure must be posted to an institution’s website 30 days after the date when the school received its student allocation and updated every 45 days thereafter. The items that must be disclosed on an institution’s website include: acknowledgement the institution signed and returned the Certification and Agreement and the assurance the institution has used, or intends to use, no less than 50 percent of the funds for emergency financial aid grants; total amount of funds that will be or has been received; total amount of funds distributed to students; estimated total number of students eligible to participate in Title IV; total number of students who have received an emergency financial aid grant; the method(s) used to determine which students receive emergency financial aid grants and how much they would receive; and any instructions, directions, or guidance provided by the institution to students concerning the grants.
Question: Can an institution use the institutional portion of its allocation under the Higher Education Emergency Relief Fund (“HEERF”) to provide an emergency financial aid grant to a student who is not Title IV eligible?
Answer: No. According to the U.S. Department of Education, regardless of whether an emergency financial aid grant is provided using the student portion or institutional portion of funds under the HEERF, the same Title IV eligibility criteria apply. In other words, only students who are or could be eligible to participate in Title IV may receive emergency financial aid grants.
Question: Can a student who is eligible for Title IV receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”) if he or she is enrolled in an ineligible program? For example, we have a student enrolled in a 200 clock hour program.
Answer: Unclear. Although we do not believe a student enrolled in an ineligible program is eligible to receive an emergency financial aid grant under the HEERF, we submitted this question to the U.S. Department of Education on April 22, 2020 for confirmation. We will update this answer once a response is received.
Question: Is a Title IV student who is currently enrolled in a hybrid program eligible to receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”) if he or she was enrolled only in online courses on March 13, 2020, the date the President declared a national emergency due to coronavirus?
Answer: Yes, provided the student also meets all other eligibility criteria. In this scenario, the student was not enrolled exclusively in an online program on March 13, 2020 but instead online courses that are part of his or her hybrid program. The April 21, 2020 FAQ published by the U.S. Department of Education states that those students who were enrolled exclusively in an online program on March 13, 2020 are not eligible for emergency financial aid grants under the HEERF.
Question: Can an institution use the institutional portion of its allocation under the Higher Education Emergency Relief Fund (“HEERF”) to make additional emergency financial aid grants to students?
Answer: Yes! In fact, the U.S. Department of Education is strongly urging institutions to consider using some or all of their institutional portion under the HEERF to provide additional emergency financial aid grants to students for expenses related to the disruption of campus operations due to coronavirus.
Question: Can a student who lost Title IV eligibility due to not making satisfactory academic progress receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: No. If a student is presently enrolled at an institution but has lost Title IV eligibility due to not making satisfactory academic progress, he or she would not be eligible for an emergency financial aid grant under the HEERF.
Question: Can a recent graduate receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”) if he or she was enrolled on March 13, 2020 but has since graduated?
Answer: No. According to the April 21, 2020 FAQ published by the U.S. Department of Education, only students who are or could be eligible to participate in the Title IV programs may receive an emergency financial aid grant under the HEERF. One eligibility criterion under Sec. 484 of the Higher Education Act is that a student must “be enrolled or accepted for enrollment in a degree, certificate, or other program…”
Question: Does CECU know of any proprietary institution that has received its student allocation under the Higher Education Emergency Relief Fund (HEERF) yet? Our institution applied on April 10, 2020, the first day the application was available on grants.gov, but we still have not received funds.
Answer: Yes. Although CECU is aware of a few proprietary institutions that have received their student allocation under the HEERF, we also understand many institutions that submitted a complete application are still waiting on the U.S. Department of Education to make funds available through G5.
Question: Is a student that is on an approved leave of absence according to 34 CFR 668.22(d) eligible to receive an emergency financial aid grant under the Higher Education Emergency Relief Fund (HEERF)?
Answer: Yes.
Question: Will allocations received by a proprietary institution under the Higher Education Emergency Relief Fund (“HEERF”) count as revenue for the 90/10 test?
Answer: No. The U.S. Department of Education has explicitly stated that the Secretary does not consider HEERF allocations as Federal financial aid under Title IV of the Higher Education Act. As a result, HEERF allocations paid directly to institutions by the Department will not be included as revenue for 90/10 purposes.
Question: Can an institution distribute emergency financial aid grant funds to their students under the Higher Education Emergency Relief Fund (“HEERF”) using debit cards?
Answer: Yes. According to the April 21, 2020 FAQ published by the U.S. Department of Education, institutions may distribute emergency financial aid grants to their students using debit cards, credit cards, checks, electronic transfer payments, and payment apps.
Question: Are there reporting requirements for an institution that distributes emergency financial aid grant funds to their students under the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: Yes. According to the Certification and Agreement at Section 4(c), institutions that provide emergency financial aid grant funds to their students under the HEERF are required to regularly report to the U.S. Department of Education how the 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. The Department has indicated it will publish instructions in the Federal Register on these reporting requirements.
Question: Will an institution that does not participate in the Title IV programs receive an allocation under the Higher Education Emergency Relief Fund (“HEERF”) since the institution is approved by its respective State authorization agency and is accredited?
Answer: It appears not. According to the U.S. Department of Education’s methodology for calculating amounts under Sec. 18004(a)(1) of the CARES Act, institutions that are currently ineligible or were not participating in Title IV per the IPEDS data are excluded from receiving an allocation under the HEERF.
Question: Is there a maximum grant amount an institution can award to a student under the Higher Education Emergency Relief Fund (“HEERF”)?
Answer: No. However, the U.S. Department of Education recommends institutions consider the current maximum Pell Grant of $6,195 as an appropriate maximum amount for a student’s emergency financial aid grant under the HEERF to ensure funds are distributed as widely as possible.
Question: Can an institution evenly split across all enrolled students the emergency financial aid grant funds under the Higher Education Emergency Relief Fund (“HEERF”)? For example, every student receives a $1,300 grant.
Answer: It depends. Although there is no prohibition on an institution distributing its emergency financial aid grant funds under the HEERF evenly across all their students, an institution is still responsible for determining (and documenting) that each student is individually eligible for the grant.
Question: Can an institution use emergency financial aid grant funds under the Higher Education Emergency Relief Fund (“HEERF”) to reimburse itself for costs it incurred because of Coronavirus? For example, is an institution allowed to reimburse itself for laptops it purchased last month so students could continue their education online?
Answer: No. Based on guidance CECU received on April 9, 2020 from the U.S. Department of Education, as well as the Certification and Agreement, an institution is prohibited from using the first 50 percent of its formula allocation under the HEERF to reimburse itself for any costs, expenses, or refunds previously issued to students. This first 50 percent allocation is for the sole purpose of providing emergency financial aid grants directly to students.
Question: Can an emergency financial aid grant under the Higher Education Emergency Relief Fund (“HEERF”) be awarded to a student who is not a Title IV recipient?
Answer: Yes. Any student attending your institution that meets the HEERF eligibility criteria may receive an emergency financial aid grant for expenses related to the disruption of campus operations due to Coronavirus (e.g., food, housing, course materials, technology, health care, child care).