Washington Watch: Updated guidance on CARES Act funds

U.S. Education Department (Photo: Matthew Dembicki)

The U.S. Education Department (ED) has issued a third set of guidance (again in the form of Q&As) on implementing the CARES Act’s Higher Education Emergency Relief Fund.

Although the new information is not quite as substantial as previous regulatory actions, it outlines important items for institutions. For example, on student emergency grants, it clarifies that institutions that awarded funds to non-Title IV-eligible students before the June 17 interim final rule on this topic will not be held liable. Original ED guidance did not include this limitation.

The guidance also indicates that, while colleges have one year to obligate funds from the date of their certification agreement with ED (and 90 days to liquidate them), institutions may seek an extension.

“Changes in enrollment levels, the need to reserve funds in the event that the emergency is prolonged, or other challenges, may render a campus unable to obligate all of their funds by the end of the award year. Consequently, no-cost extensions (NCEs) of up to 12 months are available as provided,” according to the updated guidance.

Dos and Don’ts

In keeping with previous understanding, ED indicated institutional CARES Act funds may go toward purchasing equipment or software, covering online licensing fees or paying for internet service to enable students to transition to distance learning. The guidance also reiterates that colleges cannot use the funds to simply defray revenue losses. However, this may be possible when the “expenses encumbered are a result of significant changes to the delivery of instruction due to the coronavirus,” it said.  

In addition, the guidance states that executive and senior administrators’ salaries would normally have been paid regardless of the coronavirus and do not qualify. This could potentially be an issue at relatively small institutions. The guidance does indicate that colleges can use CARES Act funds to pay individuals hired to do work specifically related to the coronavirus.

Next legislative steps

On a related matter, the American Association of Community Colleges’ advocacy efforts on the next stimulus bill aims to ensure that whatever support is ultimately provided is tendered to make it easy for campuses to deploy. This includes allowing any institutional funds to be used for lost revenues.  

Legislation passed by the House and offered by both Republican and Democratic senators would make these allowable expenditures. The Republican measure would also give colleges greater flexibility in allocating funds between student grants and institutional expenditures than the CARES Act.  

About the Author

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