Blog Post 12.11.20
Alert
Alert
01.11.21
The Consolidated Appropriations Act, 2021 (CAA)—the latest COVID-19-related stimulus legislation signed into law on December 27, 2020—makes available almost $81.9 billion for the Education Stabilization Fund (ESF), of which $22.7 billion is set aside as relief funding to be distributed by the U.S. Department of Education (ED) to IHEs through the Higher Education Emergency Relief Fund (HEERF). Section 311(a). These funds are in addition to the relief funding allocated under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as described here and here, and will remain available through September 30, 2022, for IHEs to prevent, prepare for, and respond to the COVID-19 on the postsecondary level.
In addition, the CAA provides $54.3 billion in further relief for K-12 education through the Elementary and Secondary School Emergency Relief Fund (ESSER) and $4.1 billion for the Governor’s Emergency Education Relief Fund (GEERF), also available through September 30, 2022, to prevent, prepare for, and respond to the COVID-19 on the state and school district levels. Like the CARES Act, the CAA establishes a reporting requirement to account for use of these funds.
Some of the CAA’s more noteworthy sections include:
Injection of Additional Funds into HEERF: Section 314 provides that the HEERF, which was implemented by the CARES Act and initially allocated $14 billion, will be topped up with an additional $22.7 billion.
Provision of Additional Funding for ESSER: Section 313 grants an additional $54.3 billion to the ESSER, which was originally endowed with approximately $13 billion by the CARES Act.
Expansion of Eligibility for Maximum Amount of Pell Grants: Section 473 expands the eligibility of families to receive the maximum Pell Grant amount of $6,000 to those who earn less than 175 percent of the federal poverty level. This expansion of eligibility is projected to enable an additional 1.7 million students from lower-income families to receive the full Pell Grant amount and make 555,000 students newly eligible for Pell Grant awards.
Simplification of FAFSA: Title VII of the CAA provides for a simplification of FAFSA application procedures to make it “easier to apply for federal aid” and to make “that aid predictable.” Section 702.
Forgiveness of HBCU Capital Financing Loans: The CAA provides that, not later than 90 days after the effective date of the CAA, the Secretary of Education shall repay the outstanding balances of principal, interest, fees and costs on the disbursed loan amounts for each applicable loan agreement closed by HBCUs affected by the pandemic who could not repay their loans owed to the federal government. Section 706. This relief is forecast to result in the forgiveness of more than $1.3 billion in outstanding loans.
Other Noteworthy Provisions:
Finally, the CAA includes many other provisions within its 5,593 pages that may benefit IHEs, as summarized here, including fiscal year 2021 appropriations for ED. Notably, the CAA provides ED with $2.5 billion for higher education programs—representing an increase of $66 million over the appropriation from 2020. Leadership at IHEs should consider these other elements when assessing the overall impact of the CAA on their institution.
For more information, please contact Jeffrey P. Metzler or Roland C. Reimers.
Pillsbury Winthrop Shaw Pittman LLP’s experienced crisis management professionals are closely monitoring the global threat of COVID-19, drawing on the firm's capabilities in supply chain management, insurance law, cybersecurity, employment law, corporate law and other areas to provide critical guidance to clients in an urgent and quickly evolving situation. For more thought leadership on this rapidly developing topic, please visit our COVID-19 (Coronavirus) Resource Center.