Emergency Money for Students Arriving Soon

The Education Department is beginning to disperse the $14 billion set aside for higher education in the stimulus package passed by Congress two weeks ago, beginning with $6 billion in funds for institutions to give students through emergency grants.

In addition, Education Secretary Betsy DeVos told reporters the department is working on releasing billions more in stimulus funds to help defray the costs to institutions of dealing with the coronavirus pandemic. The department on Thursday also released how much each institution will get based on a complex formula set by Congress that is weighted toward institutions that enroll the greatest number of low-income Pell Grant recipients. Arizona State University, for example, will get $63 million.

However, DeVos didn’t answer a key question colleges have been asking: How exactly will they be allowed to use their share of the money?

DeVos told reporters the department is working through that question, including whether institutions can use the money to pay for what they’ve already spent to help students or on other coronavirus-related costs as they’ve closed campuses and shifted to online learning.

The $2 trillion coronavirus relief package Congress passed set aside $14 billion for higher education, with half going to help institutions with the cost of dealing with the epidemic. The other half must be used by institutions for emergency grants to students to help pay for costs like food, housing and transportation.

In a news release, DeVos said the department prioritized getting that money out the door.

"What's best for students is at the center of every decision we make," she said. "That's why we prioritized getting funding out the door quickly to college students who need it most. We don't want unmet financial needs due to the coronavirus to derail their learning."

In a letter to college and university presidents on Thursday, DeVos noted the stimulus package, called the CARES Act, gives institutions considerable discretion on how to distribute the grants for expenses related to the disruption of campus operations due to coronavirus. But she said, “I would like to encourage the leadership of each institution to prioritize your students with the greatest need, but at the same time consider establishing a maximum funding threshold for each student to ensure that these funds are distributed as widely as possible.”

She suggested using the same maximum for the grants as the $6,195 limit for Pell.

David Baime, the American Association of Community Colleges’ senior vice president for government relations and policy analysis, praised the department for giving colleges discretion to decide how to disperse the emergency grants. But he said colleges will be disappointed it does not appear the department will allow them to use the money -- at least for the grants -- to reimburse what they have spent already to help displaced students.

The department said colleges will have to certify they’ll use the money for the grants as intended before being able to draw the funds. Higher education stakeholders, who were on a separate call with DeVos and other senior department officials, said after that’s done, the money for the grants could start flowing next week.

Less clear is when the institutions will be able to get their share of the stimulus they’ve been clamoring for, as they deal with unexpected costs from the epidemic like returning money for room and board after closing campuses and residence halls.

Craig Lindwarm, the Association of Public & Land-grant Universities’ vice president for governmental affairs, praised the department for making the funds for emergency grants available. But "institutions are anxious to receive funding to address the urgent needs before them," he said.

“This crisis is causing massive disruption to students, institutional operations and institutional finances. On some campuses, it is creating an existential threat, potentially resulting in closures,” Ted Mitchell, president of the American Council on Education, wrote DeVos last week on behalf of other higher education groups.

“I fear this funding will be for naught for many institutions unless the department can act very quickly to make these funds available,” the letter said.

DeVos told reporters more information will be available within two weeks. "The department, at the secretary's urging, is working to make funds available as quickly as possible," she said.

Reaction From Higher Ed Groups

Terry Hartle, ACE's senior vice president for government and public affairs, said, “At the end of the day, [do] we wish the money [for institutions] was coming out now? You bet. But the department is doing the best it can.”

Still, higher education associations have been hoping for more certainty on how they can use the money, particularly to get back what they’ve already spent to help displaced students and shift from classroom education to online learning. Even though institutions are not able to use the emergency grants to reimburse themselves for help they've already given students, education lobbyists still are hoping they will be able to use the other half of the money to pay back some of what they have spent already.

“It is critical for the department to provide campuses with as much flexibility as possible for distributing these funds on campus, both for emergency grants to students and to help cover institutional refunds, expenses and other lost revenues,” Mitchell’s letter said.

In addition, the associations have said the $14 billion for higher education in the package is not nearly enough to cover their costs related to the epidemic. They had asked for $50 billion and said in a letter to congressional leaders Thursday that they need an additional $47 billion.

Representative Bobby Scott, a Virginia Democrat and chairman of the House education committee, said in a statement that more funding is needed. He called the last stimulus package a "down payment on the immediate and substantial relief that displaced students and cash-strapped institutions need to cope with this crisis."

Scott continued, “While I am pleased that the first $6 billion in emergency funding is now being made available, we must recognize that is just one step in a long and challenging effort to maintain access to education for students across the country.”

DeVos during the call with reporters was asked about a letter four powerful Democratic senators, led by Elizabeth Warren of Massachusetts, sent to the U.S. Department of Education Thursday, requesting clarification on whether it will allow federal stimulus funds to be allocated to for-profit colleges and universities.

The Democratic senators argued the “most legally sound interpretation” of the CARES Act would entirely exclude for-profits. They encouraged the department to target the money to public and nonprofit institutions.

DeVos, though, said nothing in the law precludes those students from getting help.

Meanwhile, she declined to tell reporters when the department will issue the much-anticipated and controversial Title IX rule changing how institutions handle allegations of sexual assault and harassment. With DeVos believing the process for the cases is slanted against the accused, the rule is expected to increase their rights, including requiring that the accused be able to cross-examine accusers.

College leaders and Democratic lawmakers have urged DeVos to hold off on issuing the rule at a time when institutions are busy dealing with the pandemic. “We are sensitive to the situation,” DeVos said. “But we also have to acknowledge that Title IX investigations continue to happen.”