Washington Watch: Yet more new ED guidance on CARES Act funding

U.S. Education Department (Photo: AACC)

The U.S. Education Department (ED) has issued yet further guidance addressing the formula grants under the CARES Act. However, this guidance is mostly good news for community colleges, particularly in how they may spend funds designated for institutional expenses created by the COVID-19 pandemic. 

The information may help the many college officials who have struggled to understand and comply with the CARES Act, while also meeting pressing student, employee and community needs. 

In its announcement, as it had done previously, ED pointed out that its guidance – here in the form of Questions and Answers – is just that, guidance, and therefore lacks the force of law or regulation. (As reported in the CC Daily, ED has just issued an “interim final rule” addressing CARES Act emergency student grants, which does have the force of law.)

Covering lost revenues – if properly documented

The new guidance is probably most beneficial in addressing the concept of lost revenue as an allowable use of the institutional portion of CARES Act formula funds. The law itself says that funds may be used to “cover any costs associated with significant changes to the delivery of instruction due to the coronavirus.” It also says in another area of the education provisions that funds can be used to “prevent, prepare for, and respond to coronavirus.” 

In any case, the new guidance makes two key statements:

“‘Recipient retains discretion in determining how to allocate and use the funds provided hereunder, provided that funds will be spent only on those costs for which Recipient has a reasoned basis for concluding such costs have a clear nexus to significant changes to the delivery of instruction due to the coronavirus.’ The Department considers institutions to have such a reasoned basis with respect to the salaries and benefits for employees that work in dining halls and dorms and who would have otherwise been paid through student housing fees, had COVID-19 not disrupted campus operations.”

The ability of colleges to use institutional CARES Act funds to support employees whose functions were impacted by the instantaneous pivot to remote learning will likely benefit community colleges. The above references to dining halls and dorms would logically apply to other campus activities as well as the new guidance specifies. 

“Upon request from the Department, institutions must provide documents demonstrating year-over-year decreases in revenue that are the result of a decline in enrollment, a decline in student fees including housing fees and meal plans, a decline in parking and facilities revenue, or a decline in revenue from summer programs or other activities disrupted by COVID-19.”

These clarifications, even though they come much later than would have been desirable – almost three months after President Trump signed the CARES Act into law – should help campuses move forward.

Student emergency grants, continued

The guidance also addresses student emergency grants. While it encourages institutions to award emergency grants quickly, it also states unambiguously that colleges have until September 30, 2022, to do so, and specifically states that any unused emergency grants may be allocated to students for the summer or fall term. Note that ED earlier had told institutions that they only had one year to spend the funds.

Many community colleges have already awarded all of their emergency student grant funds. But, given the unknown course of the pandemic, unspent funds may prove useful in coming months.

AACC’s advocacy on further stimulus legislation continues. It is hoped that this legislation will provide significant additional funds for students and institutions, and on favorable terms, as in the House-passed HEROES Act, H.R. 6800. 

AACC is also working to secure dedicated community college job training funds, which were excluded from H.R. 6800.  The legislative timetable for action, however, is highly fluid.  

About the Author

David Baime
David Baime is senior vice president for government relations at the American Association of Community Colleges.