Continued Confusion Over CARES Act Money

In a statement on its website and a court filing over the Memorial Day weekend, the U.S. Department of Education said it does not intend to enforce guidelines it has issued that say only those eligible for regular student aid can get emergency student grants created by the CARES Act.

However, financial aid administrators and associations representing colleges say that still leaves as clear as mud the question of whether colleges can give the grants to undocumented students without fear of being later penalized by the department.

“I don't think it significantly increased the clarity that institutions were seeking,” said Terry Hartle, the American Council on Education’s senior vice president for government and public affairs.

At the same time, Hartle was befuddled by another department move as it distributes money for education in the CARES Act. The department on Friday removed from its website an explanation of how it is distributing other CARES Act funds that were supposed to go to colleges that are in particular distress because of the pandemic. But instead, the money initially was earmarked for small institutions like seminaries and postsecondary schools for meditation, acupuncture and dog training.

The department, faced with the mammoth job of distributing several sources of education funding in the coronavirus relief measure, has done well in giving out the CARES ACT funds designated to institutions, Hartle said. But the distribution of funding for students and for institutions in particular distress “don’t seem to have been handled very well,” he said.

The California community college system and the Washington State attorney general in separate lawsuits are challenging U.S. Education Secretary Betsy DeVos’s interpretation of whom Congress wanted to get emergency grants to help with necessities like housing and food during the pandemic. DeVos drew criticism when the department in guidance documents said only those who qualify for federal student aid can get the grants, excluding not only undocumented and international students, but also those who are ineligible for student aid for a host of other reasons, including having poor grades or having defaulted on student loans.

Last Thursday evening, the department suddenly posted a statement, saying those "guidance documents lack the force and effect of law," which brought confusion among higher education experts about what that means.

On Monday, federal attorneys defending the Education Department reiterated the statement in their response to the suit brought by the California community colleges.

The filing, in the U.S. District Court for the Northern District, argued the case should be dismissed because the community colleges face no harm.

“The guidance is non-binding, and the department has indicated that, in the absence of a final determination issued with the force and effect of law, the department cannot, and will not, enforce the guidance against any institution of higher education. Plaintiffs thus ask for a court order that would allow them to do what they already can do -- distribute the portion of [the CARES Act’s Higher Education Emergency Relief Fund] designated for emergency financial aid grants to students in the manner they choose,” the filing said, but adding a caveat, “subject to other applicable law.”

Later in the filing, the Justice Department reiterated that the Education Department still believes that, aside from what’s in the CARES Act, other federal laws bar undocumented people from receiving federal aid -- including the emergency grants. The attorneys argued the case should be dismissed because the community colleges are unlikely to prove their case that undocumented students should be able to get the grants.

Those dual arguments mean it’s still too risky for Texas A&M University to give the grants to undocumented students, for fear of being told later in an audit that they weren’t eligible, said Joe Pettibon, the university’s vice president for enrollment and academics.

“It raises the question of what’s the risk we’re willing to assume,” he said in an interview. Instead, the university has been giving the grants only to students who have completed financial aid forms and have been judged to qualify.

The Justice Department's lawyers said it’s unclear where the Education Department will land on who is eligible for the grants.

"The department has not completed its decisionmaking process and arrived at a final interpretation of [the CARES Act]," they said in the court filing. "Instead, it has offered only preliminary guidance, which it made available as expeditiously as possible while working to distribute billions of appropriated dollars and to prioritize the multiple congressional objectives set forth in the CARES Act. What is more, the department has explicitly stated that it 'continues to consider the issue of eligibility for HEERF emergency financial aid grants under the CARES Act and intends to take further action shortly.'"

Meanwhile, higher education experts were confused when the department on Friday removed from its website an explanation of how it is divvying up $350 million in CARES Act funding for institutions in hardship.

In its place, the site now says only, “Revisions are being made in the formula allocation table and methodology for this program.” A department spokeswoman did not respond when asked what prompted the revision.

“I don’t know what to make of it. It’s another bit of confusion that’s been injected into the CARES Act funding,” Hartle said.

Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, said the courts may have to resolve the confusion.

"Whether DACA, undocumented or international students can receive emergency grants appears to continue to be an ongoing debate," he said, "and legal matter that may very well be decided in courts, short of additional guidance from the Education Department."