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FAQ: Institutional & Student Funds

 
Q.  What formula will be used to allocate the relief funds?
A.  Allocated amounts will be based 75% on an institution’s Pell FTE enrollment and 25% on an institution’s overall FTE enrollment relative to the national total, except that students who were enrolled exclusively online prior to the pandemic outbreak will not be in the count. Institutions must use 50% of such funds to provide emergency financial aid grants to students for expenses related to the disruption of campus operations due to coronavirus.

The Department of Education issued the formula methodology it used to create individual institutional distribution tables. Colleges and universities can look up their allocation and minimum amount to be distributed to students in this table, alphabetically by institution name.
 
Q.  How will the relief funds be distributed?

UPDATED 7-8-20     A.  Relief funds provided by the CARES Act directed to institutions, including MSIs and HBCUs, will be distributed through the existing Title IV infrastructure to institutions so the funds can be disbursed as quickly as possible. 
 
The Education Department issued instructions on how institutions can access the $6.3 billion for emergency student grants on April 9, 2020. Institutions must submit a certification of agreement before accessing funds. If your institution does not have an account on www.grants.gov, institutions must create an account, which takes 24-48 hours to activate. Once the certification is submitted, funds can be accessed via the Education Department’s G5 distribution system for Title IV student financial aid within about 24-72 hours. The deadline for institutions to submit the certification and agreement for student funds is August 1, 2020.

The process for accessing the institutional portion of the funds follows the same model as the student grants. Institutions must submit a certificate of agreement before applying for funds via www.grants.gov. However, colleges and universities must apply for emergency student grants in order to be eligible to apply for the institutional portion of the funding. Additional tips and instructions for both the student and institutional grants are available on the CARES Act section of the Education Department’s website. The Education Department issued guidance on the institutional funds on April 21, 2020. The deadline for institutions to submit the certification and agreement for institutional funds is August 1, 2020.
 
Institutions should spend funds within a year of the date of the certification and agreement.

On April 30, 2020, the funding for HBCUs, MSIs and Strengthening Institutions portions were made available. The certificate of agreement must be submitted before August 1, 2020 for institutions to receive funds.
 
The FIPSE funds for institutions receiving less than $500,000 in the initial allocation was also made available on April 30, 2020. The certificate of agreement for this portion must also be submitted by August 1, 2020 for institutions to receive funds.
 

Q.  When will the relief funds be made available?

UPDATED 7-8-20     A.  Funds for the student portion were made available on April 9, 2020.  Institutions must apply with a Certification and Agreement via www.grants.gov for the student portion before applying for the institutional portion.  The Education Department has begun the process of distributing to schools.

Funds for the institutional portion were made available on April 21, 2020.

Funds for Historically Black Colleges and Universities, Minority Serving Institutions, and Strengthening Institutions Programs were made available April 30, 2020.

Funds for the FIPSE portion were originally announced on April 30, 2020, but they have not yet been disbursed.

Q.  What expenses can I count in this category?

A.  According to the CARES Act, institutions of higher education can use 50% of the funds for institutional purposes and 50% of the funds for student purposes.  Specifically, the act says, the institutional funds are “to prevent, prepare for, and respond to coronavirus … to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus so long as such costs do not include payment to contractors for the provision of pre-enrollment recruitment activities; endowments; or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship.”  The Education Department issued guidance on the institutional funds on April 21, 2020.
 
With regard to student expenses, the Act states “Institutions of higher education shall use no less than 50 percent of such funds 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 Education Department issued information on these funds April 9, 2020 and released updated guidance on April 21.
 

Q.  How flexible is the 50 percent of funding for students?

A.  In its guidance, the Education Department makes clear that this funding is for emergency cash grants to students. This funding is not to be used by institutions for reimbursement for incurred costs and expenses related to coronavirus previously provided to students unless it meets the requirements for emergency grants to students under the CARES Act and was made after March 27, 2020. It is suggested, but not required, that the neediest students be given grants first. And it is suggested, but not required, that a maximum emergency award mirror the maximum Pell Grant of $6,195.
 

Q. What does it mean when it says an institution "shall to the greatest extent practicable continue to pay its employees and contractors during the period of any disruptions or closures related to coronavirus?

A. Congress uses the term “extent practicable” to express their intent that fund recipients will take reasonable consideration of this goal when making decisions. The fact that this language was used for this fund, while other areas of the bill, such as the business loan sections, have hard employment limits, indicates that Congress was aware they were not providing enough funding to institutions to prevent lay-offs. 
 

Q.  Are the federal grants to students taxable?

A. No.  While unclear initially, the IRS announced that the federal grants to students will NOT be taxed.
 

Q.  Many institutions that have provided refunds to students for room and board, tuition
     and other fees reimburse themselves?

A.  Institutions may not use student funds to reimburse themselves for such expenses.  However, institutions may use institutional funds to provide refunds to students for room and board, tuition, and other fees as a result of the disruption caused by the coronavirus. Refunds provided to students on or after March 13, 2020 are eligible for reimbursement from institutional funds if those refunds were due to significant changes to the delivery of instruction, including interruptions in instruction, because of the coronavirus.
 

Q.  Are students required to submit an application for the funds?

A.  No. Students are not required to submit an application for funding. Whichever process institutions use to determine which students get funds, institutions should document their processes and justifications.
 

Q.  May non-Title IV-eligible students receive emergency grants?

UPDATED 7-8-20     A.  No. A student must be Title IV-eligible to receive funds. This does not mean that a student has to be participating in Title IV, nor does it mean they have to file a FAFSA. Students do need to attest to being eligible for the grant via an institutionally-created application.

The Education Department has made clear its interpretation of “student” as an eligible student under the CARES Act for purposes of receiving an emergency grant is one who is eligible for Title IV federal student aid under Section 484 of the Higher Education Act (HEA). The Interim Final Rule on student eligibility for CARES Act funding makes this regulation enforceable as of June 17, but is not retroactive.  In the meantime, an injunction in the State of Washington currently exempts institutions in that state from the Section 484 restriction.
 

Q.  Can a student chose to use their grant to pay an outstanding tuition or college bill?

A.  Yes, the student controls how to use the funds. If a student wishes to use the emergency grant to pay for a tuition balance, the student must first take the cash grant, then turn around and pay tuition to the school. While this may seem cumbersome, the Education Department believes the extra step is necessary to ensure the student controls the funds.  The Education Department will be reviewing this step through its auditing and accounting processes.
 

Q.  Are students who graduated in Spring 2020 eligible to receive a CARES Act emergency
     grant?

A:  Any student enrolled in an accredited program on March 27, 2020, and is eligible for Title IV funding, is eligible to receive CARES Act emergency grants. Therefore, a student who has recently graduated and meets these requirements, is eligible to receive student emergency grants.
 

Q.  Are graduate students eligible to receive grants?

A. Yes.
 

Q.  Are international students eligible to receive grants?

A.  No. International students are not eligible for funding.
 

Q.  Are DACA students eligible?

A.  No. DACA students are not eligible for funding.
 

Q.  Are students who were enrolled exclusively in online programs prior to the coronavirus
     pandemic eligible?

A.  No.
 

Q.  Can the CARES Act funds for students be used to cover tuition or student account
     balances?

A. Emergency grants to students are intended to be cash awards, not for the institution to use to cover tuition or other account balances. Institutions may provide such cash awards to students via checks, electronic transfer, debit cards, or payment apps, but such distributions must remain unencumbered and cannot be offset against student balances. However, the institution has no oversight or control over how the student spends the money.  Therefore, it is the student who determines how to expend the funds.
 

Q.  Can funds be used as financial aid or scholarships for returning students in FY21?

UPDATED 7-8-20    A.  No. The student portion of the funding are emergency cash grants and are therefore not considered “financial aid” in the traditional sense.  These are not Title IV federal student aid dollars. Institutions may continue to provide emergency grant aid to students in the fall, so long as the funds are used to support students affected by the disruption caused by the coronavirus. Institutions may also use the institutional portion of their CARES Act funding to provide additional emergency grants. Again, these grants are not allowed to cover tuition and fees, but can cover the cost of computers, internet access, online library fees, for example.
 

Q.  Can funds be used as a recruitment tool for new students?

A. No. Institutions may not use funds as a recruitment tool for students.
 

 Q.  Can student funds be used for emergency grants to new students in the summer and
      fall of 2020?

ADDED 7-8-20   A.  Yes. The intent of the emergency grants to students made available in April was for immediate assistance to students for expenses related to the disruption of campus due to the coronavirus. If funds are still available, grants to students who were not enrolled at the time of the declaration of the emergency may receive emergency grants for expenses related to the disruption so they can pursue their education.
 

Q.  Can institutions reimburse themselves for emergency grants already made directly to
     students?

A.  Yes. For the student portion of the funding, institutions can reimburse themselves but only if those emergency grants to students were disbursed on March 27 or later (the date of enactment of the CARES Act).
 

Q.  Can colleges and universities use the institutional funds to provide emergency grants to students in the summer and fall of 2020?

ADDED 7-8-20   A.  Yes. The Education Department recognizes that campus operations and the delivery of education continue to be disrupted due to the coronavirus, and that students will have emergency expenses related to pursuing education. The institutional funds can be used to provide emergency grants to students in the summer and fall terms as long as those students meet the student eligibility requirements under Section 484 of the HEA.
 

Q.  How do schools determine the nature of the expenses the institutional grants will cover?

A.  The institutional funds must be used for costs associated with significant changes to the delivery of instruction due to coronavirus as outlined in the CARES Act. Institutions may use the funds for reimbursement of costs related to refunds made to students for housing, food, or other services that the institution could no longer provide, or for hardware, software, or internet connectivity that the institution may have purchased on behalf of students or provided to students.
 

Q.  Can CARES Act student emergency funds be used in lieu of wages for student campus
     employment that can no longer take place?

A.  Assuming that a student can no longer work on campus due to the campus being shut down and, therefore, a significant disruption to the delivery of instruction, the student funds can be used for an emergency grant to such a student. However, the institution cannot reimburse itself for paying student wages.
 

Q.  Can colleges and universities use the institutional funds to provide emergency grants
     to students in the summer and fall of 2020?

ADDED 7-8-20    A. Yes. Institutions can pay these employees using the institutional portion of CARES funds because of the disruption of campus operations.
 

Q.  If institutions can't use student funds to pay for expenses such as room and board
     reimbursements and purchasing of laptops, can they use the institutional portion of the
     CARES Act funding to do so?

A.  Institutions can only reimburse themselves for emergency grants to students from the student portion of the CARES Act funding if they made such grants on or after March 27 and those grants meet same terms and conditions outlined in the CARES Act. But they can reimburse themselves from the institutional portion of the CARES funding for any room and board refunds issued to students on or after March 13 due to disruptions related to the coronavirus.  Direct purchases for students for items such as laptops or other equipment already purchased for students as a result of the move to online learning are also reimbursable from the institutional share if made after March 13.
 

Q.  What reporting requirements apply to the CARES Act funds?

A.  For emergency student grants, institutions must report how grants were distributed to students, how the amount of each grant was calculated, and any instructions that the institution provided to students about the grants. Institutions also are encouraged to keep detailed records regarding institutional use of funds.  The Education Department expects to publish additional information about CARES Act reporting requirements in the Federal Register.
 

Q.  The Education Department has said that to receive an emergency grant a student must meet the definition of "eligible student" under HEA.  Does the student also have to be enrolled in an HEA "eligible program" to receive such a grant?

A.  Yes, students must be enrolled in an eligible program to receive an emergency grant.

Print the FAQs:  CARES Act Frequently Asked Questions 
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