NAICU Washington Update

Rumors Abound on Potential COVID Relief; Advocacy Still Needed

December 10, 2020

While talks on a COVID relief bill continue to progress in Congress, the White House this week introduced its own relief package, adding another layer of uncertainty to the negotiations in Washington.  

While details have not been released, it is understood that the bipartisan framework Congress is working on includes $20 billion for higher education, which is $6 billion more than the amount provided in the CARES Act.  The bill is also likely to include set-aside funding from the $20 billion for minority-serving institutions. 

It is also rumored that negotiators have agreed to make the distribution formula used to allocate the relief funds based on the total number of students at each institution, rather than fulltime equivalent (FTE) status.  If true, this decision will change how the funding is divided among institutions.  It is understood that, based on the formula, 75% of the overall national funding will be based on an institution’s share of Pell Grant students and 25% on non-Pell students. This is the same proportion provided under CARES.

With virus cases increasing across the country, Congress is feeling the pressure to finalize some relief funding before the session adjourns, and families face the winter holidays.  Additional COVID relief may be considered in the 117th Congress, after the Biden Inauguration. 

Advocacy Still Needed

What is not known is whether institutions will be given increased flexibility on the use of student and institutional funds.  This decision will determine whether colleges can more directly help their students pay for the cost of attendance, and institutions can defray a broad range of costs related to addressing the pandemic on campus. As with CARES, the money an institution will be allocated is rumored to be designated half for students and half for institutions. 

It is very important that you continue your advocacy for funding for higher education by telling your campus story as details can change until the final deal is struck. In particular, make sure you emphasize the need for a more flexible use of funds for both your institutional and student allocations than the CARES Act provided.

Additional Components

The relief proposal includes several additional aspects that will affect students and institutions, including: 
  • For student loan repayment, the bill is expected to include an extension of the student loan forbearance provisions in the CARES Act through April 30, 2021.
  • Funding of $7 billion is rumored to be allocated to the states for COVID testing and tracing, which is particularly important for colleges and universities that are included in their state testing plans. 
  • The bill is expected to allow a second round of Paycheck Protection Program (PPP) loans to small businesses and some non-political 501(c)6 organizations that have been the hardest hit by the pandemic.  There will most likely be very narrow criteria for qualifying, including a limitation for small businesses of 300 employees and revenue loss of at least 30% for one quarter this year, and nonprofits generally may be left out. 
  • The bill could also address a number of tax and employment provisions. 
  • Also rumored to be included is an extension of the time recipients have to spend CARES Act Coronavirus Relief Funds (CRF) from states beyond the current December 30 deadline.  
The White House Jumps into Negotiations
The most recent COVID negotiations were jumpstarted when a bipartisan group of Senators introduced a $908 billion proposal right after Thanksgiving. As they agreed to the framework, and began working out the details this week, the White House offered a $916 billion package, which includes a family stimulus payment that the congressional version does not. This puts the White House firmly at the negotiating table, and signifies the president’s inclination to support another relief package. The big issues that are driving the bill’s entire viability continue to be state and local funding, limited liability protection, extending unemployment benefits, and, now, the family stimulus payment.

Congress is scheduled to pass a continuing resolution (CR) this week to keep the government open until December 18, one week longer than the current CR, to allow negotiations to continue on the COVID relief bill.  If a deal is reached, the CVOID relief bill will be combined with a final FY 2021 omnibus spending bill before adjournment. It is also possible that the bill to redesign the student aid distribution formula for the first time since 1992 will be added to that package.

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