With institutions of higher education being some of the earliest organizations impacted by the pandemic, the CARES Act provides some relief to institutions as well as students.
Section 18001 of the law contains the details for an Education Stabilization fund of $30.75 billion dollars, which are to be allocated as follows:
Roughly 46% to higher education institutions, as follows:
90% allocated by:
- 75% according to relative share of full-time equivalent enrollment of
Federal Pell Grant recipients who are not exclusively enrolled in
distance education courses prior to the coronavirus emergency**; and
- 25% according to the relative share of full-time equivalent enrollment
of students who were not Federal Pell Grant recipients who are not
exclusively enrolled in distance education courses prior to the
- 7.5% to defray expenses such as lost revenue, reimbursement for
expenses, technology costs associated with a transition to distance
education, faculty and staff trainings, payroll
- 2.5% to be allocated by the Secretary of Education
Roughly 10% to a “Governor’s Emergency Education Relief Fund” provided
to the Governor of each state to provide grants to local educational
agencies and emergency support through grants to institutions of higher
education. Grants awarded may be used to provide emergency support to
institutions of higher education serving students with the state that
the Governor determines have been most significantly impacted.
Roughly 44% to an elementary and secondary school emergency relief fund.
Funds can be used broadly, however the bill lists items funds cannot be used for, such as paying contractors for pre-enrollment recruitment, endowments, capital outlays for athletics, sectarian instruction, or religious worship. No less than 50% of such funds are to be used as 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, child care). The Secretary of Education may require a report on how the funds were used. ***
Section 18006 of the law states that higher education institutions must, to the greatest extent possible, continue to pay employees and contractors during the period of any disruptions related to coronavirus.
There are separate provisions in the bill that directly benefit students, such as deferral of student loan interest and accommodations to rules that would otherwise disqualify students from being eligible for certain loan forgiveness programs.
**An educated guess on our part of what an institution can expect to receive from this portion of the law is 33 – 35% of the total Pell received in 2018-2019. This estimate is based on the following calculation: $30.75 billion * 46% = $14.145 billion * 90% = $12.73 billion * 75% = $9.5 billion. In 2018-2019, there was approximately $28 billion in Pell awarded. $9.5 / $28 = 34%)
*** A practical way to develop a report on this might be to prepare a budget to actual report.
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