NAICU Washington Update

Department of Education Issues Interim Final Rule on Student Eligibility for CARES Grants

June 18, 2020

The Department of Education this week issued an interim final rule regarding student eligibility for CARES Act emergency grants.  The rule makes guidance issued by the department an enforceable regulation effective June 17.

Under the new rule, only students who meet the definition of “eligible student” under the Higher Education Act are eligible for the emergency grants.  As a result, Deferred Action for Childhood Arrivals (DACA), international, and several other categories of students are prohibited from receiving emergency grants under the CARES Act as of June 17.

While the new rule is consistent with the guidance the department issued on April 21, the establishment of a formal regulation effectively mandates compliance with the agency’s interpretation of the law. Because the regulation is not retroactively effective, however, it does not impact institutions that previously distributed funds to students whom the department has deemed ineligible.

Meanwhile, two different courts have already broadly rejected the department’s defense of its changing guidance on student eligibility and issued preliminary injunctions that prevent it from implementing its guidance and regulations. In both cases, the injunctive relief is limited to the plaintiffs, namely institutions of higher education in Washington State and community colleges in California. It is important to note, however, that the legal reasoning in both decisions provides a roadmap for institutions of higher education that wish to challenge the department’s regulations in their jurisdictions.

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