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What’s Inside the COVID-19 Stimulus Fund for Your College or University?
While the U.S. Department of Education has not finalized the formula grants summarized below, we have provided a rough estimate of distribution of the $12.5 billion based on the guidelines of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)—see what your relief may look like here.*
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) includes various relief and aid measures for colleges and universities as well as students and graduates with federal student loans. The bill creates an education stabilization fund of approximately $31 billion. This stabilization fund is broken down into three components, with one component allocating $13.95 billion directly to higher education.
Under the bill, 90 percent of the $13.95 billion (approximately $12.5 billion) is allocated directly to institutions through formula grants. The allocation formula is based on the following:
- Seventy-five percent according to the relative share of full-time equivalent enrollment of Federal Pell Grant recipients who are not exclusively enrolled in distance education courses prior to the SARS-CoV-2 virus and the incidence of COVID-19 (COVID-19) emergency
- Twenty-five percent according to the relative share of full-time equivalent enrollment of students who were not Federal Pell Grant recipients who are not exclusively enrolled in distance education courses prior to the COVID-19 emergency
Institutions have discretion on covering any costs associated with significant changes due to the disruption caused by COVID-19 and defraying expenses of higher education as long as the following is met:
- No less than 50 percent of such funds can be used to provide emergency financial aid grants to students for expenses related to disruption of campus operations due to COVID-19 (including eligible expenses under a student’s costs of attendance)
- Payments to contractors for pre-enrollment recruitment activities and funds cannot be used for endowments, capital outlays associated with athletic facilities, sectarian instruction or religious worship
The legislation also includes other grant aid that can be distributed by state governor’s discretion and other funds designated for minority-serving institutions as well as those institutions more significantly impacted by COVID-19.
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*Integrated Postsecondary Education Data System (IPEDS) 2018 full list of intuitions and IPEDS enrollment and financial aid reports from National Center for Education Statistics (NCES)