In a press release issued on April 9 by the U.S. Department of Education, Secretary Betsy DeVos announced that approximately $6 billion allocated to colleges and universities is to be used for direct emergency cash grants to students who are adversely impacted by the pandemic. The funds are part of the over $14 billion designated for higher education as part of the Education Stabilization Fund included in the third coronavirus stimulus package.

It has been reported that funds could be available by Friday, April 17.

Individual allocations to colleges and universities were made available to the public by the Department here (methodology here). The team at Whiteboard Advisors has also created an interactive table that allows users to sort and compare institutional allocations available here, including by state.

The “only stipulation” for colleges to receive the money will be to sign a certification form providing details about how the institution will use the funds in accordance with the law. Institutions have been encouraged by the Department to “promptly and to the greatest extent practicable distribute all of the advanced funds in the form of emergency financial aid grants to students by one year from the date” the institution signs the form.

Institutions are not permitted to use any of the funds to reimburse themselves for any costs or expenses incurred to alter the delivery of instruction or reimburse themselves for previously issued refunds to students. It is expected that the Department will release additional funds from the CARES Act this spring to reimburse institutions for lost revenue.

According to guidance from the Department, funds allocated to institutions can be used for expenses such as food, housing, healthcare, childcare, transportation, and course-related materials.

Also, according to the Department, institutions may “develop their own system and process for determining how to allocate these funds,” which gives colleges and universities an unprecedented amount of flexibility in determining which students receive grants. 

As noted by many who have analyzed the legislation and the guidance, neither the statute or the certification form require that these emergency grant funds be provided to Title IV eligible students, signaling that institutions may be able to distribute funds to students who would otherwise not participate in the federal financial aid programs.

Emergency financial aid grants will not be counted as part of a student’s estimated financial aid (EFA), pursuant to the guidance issued by the Department on April 3.

The letter to college and university leaders recommends that students who have the greatest need are prioritized, suggesting the maximum Pell Grant award ($6,195) as an example of a maximum grant award.

Institutions will have to report to the Secretary how grants were distributed to students, the amount of each grant, how the award was calculated within 30 days from signing the certification, and every 45 days thereafter.

Should an institution determine that their students are not in need of the funding – or the institution has resources remaining after allocating to those in greatest need – they are encouraged to allocate unused resources to other institutions in the state or region.