• CARES Act Provides Some Relief for Higher Ed, AASCU Advocates for Additional Support

    On Friday, March 27, the House passed its third coronavirus legislative package (the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act). The Senate had already passed the bill, and President Donald Trump signed the legislation into law. This federal intervention, which aims to keep the economy afloat while it is significantly shut down to combat the spread of COVID-19, is valued at over $2 trillion—a staggering and unprecedented amount of funding in one piece of legislation.

    The CARES Act is a significant step in the right direction in our national response to the devastating impact of the coronavirus crisis. The legislation was the subject of intense effort by the Washington higher education community, including AASCU, which advocated for federal assistance to colleges and universities. However, AASCU is continuing to advocate for additional action.

    "While we express much thanks for this package and recognize that it will help distressed institutions in the short-term, it still falls short of what is desperately needed on our campuses," said AASCU President Mildred García, Ed.D., in a statement. "We will continue to work with congressional leaders and the administration to develop additional federal policies and strategies to assist state colleges and universities going forward."

    Among its many important features, the bill provides:

    • $30.75 billion in federal funding for education, of which 2% is reserved for Indian Education, grants to governors and administrative expenses
    • 46.3% of the remaining $30.135 billion, or $13.953 billion, is directed at higher education
    • Institutions would receive 90% of that amount ($12.558 billion) based:
      • 75% on their share of FTE Pell recipients and 
      • 25% on their share of FTE non-Pell enrollments.
    • Students enrolled exclusively in online programs before the crisis are excluded from both counts.
    • The funds received by institutions under this formula are to be spent on costs associated with the coronavirus response and may not be used for pre-enrollment and recruitment contracts, capital outlays, athletics, or religious worship.
    • Institutions will be required to spend half of their allotment on emergency aid to students.

    In addition to the formula-driven institutional share, 7.5% of the funds set aside for higher education ($1.047 billion) will be available to Minority-Serving Institutions and 2.5% ($349 million) to FIPSE to assist institutions that are most heavily affected by the crisis.

    The legislation provides an additional $2.953 billion to governors to support education and requires recipient states to assure they would fund education (P-12 and higher education) in fiscal years 2020 and 2021, at least at the average funding level of the three prior years in their respective states. This provision, modeled after a similar requirement in the 2008 stimulus bill, is intended to prevent the states from drastically cutting educational spending, although the CARES Act provides a broad waiver authority for states facing severe budgetary challenges as a result of the coronavirus pandemic.  

    The legislation also includes significant modifications of Title IV rules, including relief from compliance deadlines, the return of Title IV funds, Pell lifetime limits, and Satisfactory Academic Progress rules. Furthermore, the bill suspends all payments due on direct and guaranteed student loans held by the Secretary of Education until September 30, 2020, and has the interest due on such loans covered by the federal government. It instructs the Secretary to include this suspension as counting toward loan forgiveness and loan rehabilitation. It also suspends all involuntary collections activities on defaulted student loans until that date.

    Two other bills proceeded the CARES Act. The first bill, signed into law on March 6 by President Trump, provided a total of $7.7 billion in new discretionary spending and authorized an additional $490 million in mandatory spending through Medicare. That legislation bolstered vaccine development, research and equipment stockpiles. It also boosted state and local health budgets as government officials and health workers continue to fight to contain the outbreak. The second bill, signed into law on March 18, expanded access to free testing (no deductibles or copayments will be assessed). It also provided $1.2 billion in food aid and extended sick leave benefits to vulnerable Americans.

    Congress will almost certainly pass additional legislation to contain the devastating economic effects of the coronavirus. While the Senate is in recess through April 20, it is widely believed negotiations will start on a fourth rescue package this week. 

    AASCU wants to hear from our campuses about their particular needs and the specific impact of the crisis on their institutions and students. In addition, AASCU will continue to monitor the activities of the federal departments of Education and the Treasury as well as other agencies as they move to implement the requirements of the new law. Please contact Luis Maldonado, vice president for government relations and policy analysis, with questions and comments.