CARES Act Higher Education Emergency Relief Fund Allocations and Application Requirements Announced

04.15.2020

On April 9, 2020, the Department of Education published information on allocation of the CARES Act Higher Education Emergency Relief Fund, including allocation amounts, and requirements for distributing 50 percent of the funds to students in the form of emergency financial aid grants to help cover expenses related to COVID-19.

The published information includes a list of institutions of higher education eligible to receive funds, and the amount of funds allocated to each. [available at this link: https://www2.ed.gov/about/offices/list/ope/allocationsforsection18004a1ofcaresact.pdf]

The Department of Education will only be providing institutions with 50 percent of their allocations under the Higher Education Emergency Relief Fund at this time. Institutions are required to distribute these funds to students through emergency financial aid grants.

In a letter announcing the availability of the funds, Secretary De Vos explained that institutions have the discretion to develop their own system and process for determining how to award emergency financial aid grants to students. Institutions can choose to distribute awards to all students or only to those students who demonstrate financial need. The Department of Education recommends that institutions prioritize awarding students with the greatest need. The only requirement, however, is that funds be used “to cover expenses related to the disruption of campus operations due to coronavirus.” The Department of Education clarified that expenses related to COVID-19 include food, housing, course materials, technology, health care, and child-care. The guidance does not place restrictions on individual student award amounts, but recommends institutions consider using the 2019-2020 maximum Federal Pell grant amount of $6,195 as a threshold. Institutions are authorized to reallocate Higher Education Emergency Relief Funds that they receive to other higher education institutions within their state or region with significant student financial need.

Institutions will not be able to access funds until they have signed and completed the Certificate of Funding and Agreement Higher Education Emergency Relief Fund. An institution will be able to draw on emergency assistance funds using the Department of Education’s G5 system after the Department of Education has received its certificate. Institutions must apply for the funds by September 30, 2020.

The Certification and Agreement form outlines the conditions to which an institution must agree in order to receive funds, including the following:

The funds “shall not be used for any purpose other than the direct payment of grants to students for their expenses related to the disruption of campus operations due to coronavirus, such as food, housing, course materials, technology, health care, and child-care.”
Within 30 days of signing the Certification and Agreement and every 45 days thereafter, the institution must provide the Secretary of Education with a report on “how 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 the students about the grants.”
The institution must “document that [it] has continued to pay all of its employees and contractors during the period of any disruptions or closures to the greatest extent practicable, explaining in detail all specific actions and decisions related thereto, in compliance with Section 18006 of the CARES Act.”
The institution must promptly and to the “greatest extent practicable” distribute the funds to students as emergency financial aid grants within 1 year of the date of the Certification and Agreement; and
The institution must make records related to the disbursement of these funds available upon request by the Department of Education or other federal agencies.

As we discussed in our prior alert summarizing the CARES Act, Section 18006 requires that an institution of higher education receiving funding under the CARES Act Education Stabilization Fund (of which the Higher Education Emergency Relief Fund is a component) “shall to the greatest extent practicable, continue to pay its employees and contractors during the period of any disruptions or closures related to coronavirus.”

The Certification and Agreement form adds significant teeth to Section 18006, and to the other conditions that are placed on the funds, through the above-detailed documentation and certification requirements. Significantly, the Certification and Agreement form provides that a failure to comply with its terms and conditions and/or any other relevant provision of the CARES Act or other applicable law may result in significant liabilities on the part of the institution receiving the funds, including but not limited to liability under the federal False Claims Act.

Districts utilize a variety of contractors and employees providing a wide range of services. An assessment of whether continued payments to employees and contractors are “practicable” and how to meet the requirement of the Certification and Agreement form to “document” continuation of payments and to “explain in detail all specific actions and decisions related thereto” will require careful consideration as to the application of these requirements to an institution’s particular circumstances. Each employment situation or contract should be considered on a case-by-case basis and reviewed with legal counsel to determine whether and what payment should be made, and how such decisions will be justified and documented for purposes of compliance with the certification requirements.

More information on the application process and requirements is available through the Department of Education’s website at https://www2.ed.gov/about/offices/list/ope/caresact.html.

Letter from Department of Education - https://www2.ed.gov/about/offices/list/ope/caresactgrantfundingcoverletterfinal.pdf

Copy of Certification and Agreement - https://www2.ed.gov/about/offices/list/ope/caresheerfcertificationandagreementfinalombapprovedforissuance.pdf