Department of Education Releases Distribution of Stimulus Funds

On Thursday, April 9, 2020, the Department of Education (ED) released the formula it will use to allocate CARES Act funds to IHEs and the amount that each institution will receive. ED also announced that it was prioritizing emergency aid for students and that IHEs can draw down these funds once ED receives a signed Certificate of Funding and Agreement. (Certificates can be returned via grants.gov.)

In announcing the availability of emergency aid for students, Secretary of Education Betsy DeVos provided the following guidance:

• Institutional Discretion: “The CARES Act provides institutions with significant discretion on how to award this emergency assistance to students. This means that each institution may develop its own system and process for determining how to allocate these funds, which may include distributing the funds to all students or only to students who demonstrate significant need.”
• Statutory Requirements: “The only statutory requirement is that the funds be used to cover expenses related to the disruption of campus operations due to coronavirus (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care, and child care).”
• Suggested Distribution: “With that said, I would like to encourage the leadership of each institution to prioritize your students with the greatest need, but at the same time consider establishing a maximum funding threshold for each student to ensure that these funds are distributed as widely as possible. As a point of reference, you might consider using the maximum Federal Pell grant (for the 2019-2020 academic year, $6,195) as that threshold.”
• Sharing Allocations with Other IHEs: “In addition, if you determine that your institution’s students do not have significant financial need at this time, I would ask that you consider giving your allocation to those institutions within your state or region that might have significant need.”

For more information, please contact Jeffrey P. Metzler, Craig J. Saperstein, Barry D. Burgdorf, Roland C. Reimers, Sarah G. Flanagan or Jacob R. Sorensen.

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