The U.S. Department of Education issued new guidance to college financial aid administrators on April 21, 2020. The guidance answers a dozen or so questions concerning emergency financial aid grants to students. What does this mean for you?
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) established a Higher Education Emergency Relief Fund (HEERF) to provide about $14 billion in funding to U.S. colleges and universities.
At least half of the money must be used 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, health care, and child care).”
The U.S. Department of Education guidance specifies how colleges and universities may provide the emergency financial aid grants to students.
Grants Must Be Paid Directly to Students
- The emergency financial aid grants to students must be paid to the students. The grants cannot be applied to the student’s outstanding or overdue account balances. After the student receives their emergency financial aid grant, they can choose to apply it to their college bills, but they cannot be required to do so as a condition of receiving the emergency financial aid grant.
- Colleges can reimburse themselves for emergency financial aid grants they previously provided to students, but only for grants to eligible students for eligible expenses made on or after March 27, 2020, the date the CARES Act was enacted.
- Colleges may pay the emergency financial aid grants to students through debit cards, electronic transfer to the student’s bank account or by check. Colleges cannot deduct any fees or amounts owed to the college from the emergency financial aid grant. The payment cannot be restricted to on-campus facilities or to vendors affiliated with the college.
Who Is Eligible for the Emergency Financial Aid Grants?
- Only students who are or could have been eligible for Title IV federal student aid may receive emergency financial aid grants to students. This includes students who filed a Free Application for Federal Student Aid (FAFSA) or who are eligible to file a FAFSA.
- International students and undocumented students (including DACA students) are not eligible. U.S. citizens, permanent residents and certain eligible noncitizens are eligible.
- Eligible students must have a high school diploma or GED, or have completed high school in a state-approved home-schooling setting.
- Male students must have registered with Selective Service or demonstrate that their failure to register was not knowing and willful.
- Students who were enrolled exclusively in an online or distance education program on March 13, 2020 are ineligible for the emergency financial aid grants to students.
What Colleges Can’t Do
- Colleges may not use the emergency financial aid grants to reimburse themselves for any costs or expenses, including any refunds or other benefits previously provided to students.
- Colleges may not use the emergency financial aid grants to students to reimburse themselves for costs associated with the changes to the delivery of instruction due to the coronavirus pandemic.
- Colleges may not use the emergency financial aid grants to reimburse themselves for the cost of laptops and other computer equipment and internet access provided to students. (This does not preclude students from using the emergency financial aid grants to buy computer equipment and internet access.)
- Colleges cannot use the emergency financial aid grants to students to reimburse themselves for student employment expenses, such as amounts paid to student workers. The CARES Act waives the institutional matching funds requirement for the Federal Work-Study program. The CARES Act also allows colleges to pay student workers in the Federal Work-Study program the full scheduled award through the end of the academic year if the student is unable to continue working because the student’s employer or the college campus has closed.
- Colleges that accept the Higher Education Emergency Relief Funds are required to continue paying their faculty and staff “to the greatest extent practicable” but cannot use the emergency financial aid grants to students to pay their employees and contractors.