The U.S. Education Department (ED) will likely soon publish an “interim final rule” (IFR) on CARES Act student emergency grant eligibility and related issues. (ED had announced that it would publish the rule on June 15.)
The regulation comes more than two and half months after President Trump signed the legislation and represents the fourth major public communication to colleges on awarding the funds to students that institutions received through a statutorily prescribed formula. (Community colleges received $3.3 billion overall through this formula.)
The IFR has the force of law upon publication, even though it has not undergone the standard notice and comment period generally required of federal regulations.
In the regulation, ED states that “An important policy goal for the Department is to make emergency financial aid grants available to students in the most efficient, effective, and expedient way possible and consistent with Congressional intent.” Community college officials may find that statement at variance with their experience.
Related article: Judge blocks ED’s restrictions for CARES Act funds in Washington state
Under the rule, only students who are or could be eligible to receive federal student aid, as outlined in Section 484 of the Higher Education Act (HEA), may receive the funds. In the regulation, ED states that this decision is a product of its reasoned interpretation of congressional intent. That said, there are numerous public statements and communications — one from congressional Democrats to Education Secretary Betsy DeVos — that this limitation was not desired by many legislators. The CARES Act itself does not explicitly refer to federal student financial aid eligibility as being a condition of receiving emergency grants.
In any case, undocumented students or international students are now definitively rendered ineligible for the CARES Act grants. Approximately 120,000 students who are engaged with the Deferred Action on Childhood Actions currently attend postsecondary education. In 2018-19, more than 86,000 international students attended associate degree-granting institutions.
This week’s poll: What stage is your college in disbursing CARES Act emergency student grant funds?
The regulation displays cynicism about the motivations of institutions in these use of funds, citing this as a reason for restricting institutional discretion. For instance, it states that, “For example, without the title IV eligibility standard, the existence of HEERF (Higher Education Emergency Relief Fund) funding could incentivize individuals who are not qualified and cannot qualify under the title IV standard to enroll as students, and it could incentivize institutions to take advantage of this dynamic to further their bottom lines. If a broad definition of ‘student’ were employed for purposes of emergency financial aid grants to students, unscrupulous institutions could create cheap classes and programming that provides little or no educational value and then use the HEERF grant funding to incentivize individuals not qualified under title IV to enroll as paying students in those classes and programs, thereby qualifying for a grant.”
Two options to receive grants
Colleges now have two primary options for determining who may receive emergency grant awards. (Please note that ED has refrained from instructing colleges on precisely how they should allocate funds among eligible students.) The first is by having a potential awardee complete the Free Application for Federal Student Assistance (FAFSA) application process. This resolves all ambiguity about student eligibility.
However, not all community college students routinely complete the FAFSA filing process (though, increasingly, higher percentages are doing so) and it takes time, particularly if verification is required.
The regulation does authorize another route for institutions to determine Title IV eligibility — they may develop their own document that would require a student attestation that they meet Title IV eligibility conditions, with a penalty of “perjury” for misrepresentations. It is unclear what perjury might mean in this context.
Excluding some non-credit programs
In a further blow to community colleges, the regulation precludes the use of emergency grants to support students enrolled in programs that are not eligible for federal student aid. This will include some non-credit programs that might have been candidates for student support. As with the student eligibility issue, the CARES Act did not directly address the issue of eligible programs; this has been decided by ED.
Previous ED guidance issued in this area will not have the force of law, and colleges that have operated upon their own good faith of what the CARES Act states should be in no jeopardy of future adverse audit findings. ED itself explicitly reaffirmed this generally regulatory principle – that guidance is just guidance – late last month. However, it now behooves institutions to follow closely the regulation.
AACC’s advocacy goals
The advocacy agenda of the American Association of Community Colleges (AACC) for the next stimulus bill (final action on which is not expected until sometime in late July) includes altering aspects of the CARES Act student emergency grants statutory language that has given rise to this problematic situation. It is possible that, with enough action by AACC members, more accommodating and retroactive language could be adopted, though at that point much of the grants funds will be awarded.
AACC remains grateful for the support that Congress provided in the CARES Act for students affected by the cornoravirus and hopes to secure more for that and other purposes.
Please contact AACC’s Office of Government Relations and Policy Analysis with questions or comments about this situation.
