• Significant Federal COVID Relief Dollars Provided for Higher Education

    On March 11, President Joe Biden signed the $1.9 trillion American Rescue Plan Act (H.R.1319) into law. This landmark legislation provides $40 billion for institutions of higher education, the largest infusion of COVID-related federal funds yet.

    In an important move that may foreshadow a federal decision to provide future student loan forgiveness, the bill also excludes any amount of federal or private student loan forgiveness from taxation over the next five years. This last item removes a major complication to providing $10,000 in federal student loan relief to each borrower, should Congress or the administration decide to provide such relief in the future. On March 15, Senate Majority Leader Chuck Schumer (D-NY) spoke openly about how this provision would ease the ability for the administration to take action to unilaterally cancel student loan debt, citing the taxation of any amounts forgiven as one of the biggest barriers to implementation.
     

    The bill also adopted the authorizing change contained in the House of Representatives’ bill language that includes all federal funds in the 90% portion of the 90-10 calculation for for-profit institutions. The Senate added a requirement that negotiated rulemaking occur for this provision and for it to become effective in 2023.

    Additionally, the Department of Education issued much-awaited new guidance on allowable uses of the Higher Education Emergency Relief Funds (HEERF II) authorized under the second major COVID relief bill, the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), Public Law 116-260.
     

    AASCU President Mildred García issued a statement of appreciation and an alert to AASCU membership describing the guidance as enormously helpful to institutions for the additional flexibility it provides regarding the use of funds and its retroactivity to the start of the pandemic.

    The department issued a press release on the additional assistance for students and institutions through the HEERF grant program. AASCU encourages institutions to begin drawing down and spending their CRRSAA allocations, keeping in mind the rather tight spend-out deadlines (three days for institutional grants/15 days for student grants) for any funds they draw down.