NAICU Washington Update

HEERF III Funding and Guidance Now Available

May 14, 2021

Exactly two months after enactment of the American Rescue Plan Ac (ARP), the Department of Education issued allocation tables and detailed guidance for the use of Higher Education Emergency Relief Funds, known as “HEERF III.” This third and final tranche of emergency relief brings the total higher education assistance to fight the pandemic on campus to $76.55 billion.  

Below is a summary of the new guidance, including key terms, clarifications related to previous guidance, and information on reporting requirements. 


NEW GUIDANCE – STUDENT FUNDS

The big news in the HEERF III guidance on student funds is that it makes all students eligible for all emergency student grants, going back to the CARES Act. While most institutions have spent CARES Act/HEERF I allocations, if funds remain they can be spent on this new definition of student. Many institutions have not spent all of their CRRSAA/HEERF II funds, thus the new guidance makes clear that these funds also can now be spent on any student. 

Specifically, according to the guidance, eligible students include citizens, permanent residents, refugees, asylum seekers, DACA, DREAMers, and international students. 

The guidance reiterates that all students, including international students, receiving emergency grants should have “exceptional need,” such as being Pell Grant-eligible or have other extraordinary financial circumstances, including food or housing insecurity. 

It is not required that students fill out a FAFSA, but institutions should document the decision-making process used to target funds to those students most in need. The Department strongly encourages institutions to prioritize domestic and undergraduate students when awarding emergency grants. 

Institutions are reminded that students continue to maintain control over the use of the emergency grant. It may be used on any emergency cost related to the pandemic, and it may be used on any component of the cost of attendance. If a student chooses to use grant funds to cover institutional balances, the student must affirmatively tell the institution to apply the grant to the balance. 


NEW GUIDANCE – INSTITUTIONAL FUNDS

Two new policies apply to institutional funds for this tranche of funding only that are specifically from the legislative language of the American Rescue Plan Act. If institutions do not use all institutional funds for additional student emergency grants, then a “portion” of the funds must be used to do two things: 
  1. “Monitor and suppress” the coronavirus on campus, according to “public health guidelines;” and 
  2. Conduct “direct outreach to financial aid recipients” about the opportunity for adjusted federal financial aid. 
If an institution chooses to use all its institutional funds on additional student grants, then these provisions do not apply. 


GUIDANCE ON TERMS

The guidance does not define what portion or percentage of funds should go towards virus mitigation, but it does link to existing federal guidance on Cost Principles which point toward a “reasonable and necessary” amount of the grant for such purposes.  

Monitor and suppress – What the Department means to “monitor and suppress” the coronavirus on campus is covered in the guidance with detailed illustrative examples in four categories, including testing, prevention, reducing barriers to vaccinations, and student support. 

Public health guidelines – With regard to “public health guidelines,” the Department refers to guidance provided by the Centers for Disease Control, and any state and local guidance related to operations in higher education. 

Conduct direct outreach to financial aid recipients – To “conduct direct outreach to financial aid recipients,” the guidance says institutions should actively engage financial aid recipients to ensure they know they have the opportunity to adjust their federal financial aid if they have experienced recent unemployment or other extraordinary financial circumstances. The Department encourages institutions to have financial aid administrators use the “professional judgement” permission allowed under the Higher Education Act to ensure students get the assistance they need.  

Direct outreach – “Direct outreach” means individual students need to be contacted via such means as email, mail, phone, text, webinar, or in-person to engage them in this conversation. Posting a general notice on an institutional website is not enough to meet this effort. 


CLARIFICATIONS

The Department’s guidance also contained clarifications on previous guidance related to issues it repeatedly received questions on from institutions, including: 

Payroll – The guidance clarifies that payroll and employee benefits newly associated with coronavirus can be covered by institutional funds.  This would include new hires or repurposed staff responsibilities, staff unable to work because of campus closures, and additional work and overtime work.   

Construction – The guidance reiterates that funds cannot be used for construction or the purchase of real property, but may be used for “minor remodeling,” renovations, or alterations in an existing building for purposes associated with virus mitigation, including social distancing of students, faculty, and staff. For example, installing or altering HVAC systems for air quality, installing room dividers to separate students in classrooms, or purchasing trailers to provide additional classroom space are acceptable construction activities under the guidance. 

Discharging student account balances – The guidance provides two ways to discharge student account balances using institutional funds. One is by discharging student balances and accounting for them as lost revenue. The other is to provide students with additional emergency grants and get their permission to apply that to the balances. The Department encourages institutions to write off unpaid student balances as lost revenue. 

Recruitment – Institutions are not allowed to use HEERF funds for marketing and recruitment, but can use funds to ensure at-risk students do not drop out. Efforts to engage or re-engage students who might not continue their education or complete their degree is permitted. 


EXPENSES, LOST REVENUE AND REPORTING 

Guidance on the use of institutional funds for expenses or lost revenue did not change from the FAQs issued on March 19

As with the previous HEERF allocations, quarterly and annual reporting is required for HEERF III funds, using the system set up in the CARES Act. The Department is exploring additional reporting requirements on how institutions determined exceptional need for student grants, and for the new institutional grant requirements for virus mitigation and financial aid outreach.  
 

MORE News from NAICU

Top