NAICU Washington Update

Education Department Issues Final Regulations Regarding HBCU Formula

April 23, 2021

The Department of Education  has issued final regulations regarding the 10 percent portion of the formula related to endowment amounts at Historically Black Colleges and Universities (HBCUs), included in the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA).

The final allocation amounts had been held up for technical complexities in the formula. In CRRSAA, $334.7 million was set aside for institutions in the Strengthening HBCU program and the HBCU Masters program. Within the formula based in CRRSAA, 70 percent of the funds are awarded based on Pell grant student enrollment, 20 percent  based on overall enrollment, and 10 percent based on endowment size. 

The Education Department ran into an issue when determining the amount that HBCUs would receive in relation to their endowment size because nine institutions reported zero endowment. In the final rule, the Department decided to consider all HBCUs with a reported endowment size of zero, to have an endowment size of $1 million. This approach is consistent with the language in the American Rescue Plan, and this method keeps the intent of Congress to award most of the funds from the endowment factor to those HBCUs with the smallest endowments. 

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