The CARES Act provides approximately $30.75 billion in funding to go directly from the U.S. Department of Education to higher education institutions, states, and local school districts to assist with immediate needs related to the coronavirus pandemic.
While some of these funds are allocated for a specific purpose, such as $40 million for the Student Aid Administration and $7 million for the Office of the Inspector General, a portion of these funds will be available for general applications. For instance, funds in the amount of $3 billion have been allocated for the “Governor’s Emergency Education Relief Fund” in which, by late April, governors will be invited by the secretary of education to apply for additional grants to elementary, secondary, and higher education institutions to ensure the ongoing functionality of schools and programs.
An additional $13.5 billion in funding has been allocated to the “Elementary and Secondary Education School Emergency Relief Fund,” which state education agencies can apply to use for a variety of purposes, such as purchasing technology to advance education. Additionally, $14.5 billion in funds have been allocated to the “Higher Education Emergency Relief Fund” to cover costs associated with changes in instruction practices, including the transition to online learning, due to the pandemic. The majority of the “Higher Education Emergency Relief Fund” will not be allocated via application but instead will use the Title IV formula.
- Other key takeaways from the education provisions of the CARES Act:
- Waives matching requirements for participating higher education institutions who receive campus-based aid.
- Allows higher education institutions to transfer unused work-study funds to emergency financial aid grants.
- Allows higher education institutions to exclude this semester from a student’s federal Pell Grant duration limit.
- Allows the academic year to be counted towards teacher loan forgiveness if teachers could not finish the year due to the coronavirus.
- Defers student loan payments, principal, and interest for six months without penalty.
For more information, please contact me or your regular Parker Poe contact. You can find the firm’s other COVID-19 alerts here.