CARES Act Allocations Announced for Higher Ed Institutions
On March 27, the $2-trillion CARES Act was signed into law. It includes up to $13.9-billion for post-secondary institutions through the designation of a Higher Education Emergency Relief Fund. Here’s how the funding breaks down:
90% of ($12.6-billion) of the $13.9-billion total will be allocated to institutions through the Title IV distribution system. Amounts are weighted by the relative shares of full-time equivalent (FTE) Pell Grant recipients (75% of the $12.6-billion) and FTE non-Pell recipients (25% remainder), excluding online-only student counts for each institution.
The remaining 10% ($1.4-billion) will be allocated among institutions in further awards and student grants. This funding is designed to “address needs directly related to coronavirus”, such as “lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, [and] payroll” (Coronavirus Aid, 2020). Amounts will be apportioned by an institution’s relative share in the Further Consolidated Appropriations Act of 2020 and to schools deemed to have greatest unmet need related to coronavirus.
Usage-wise, the Act stipulates that at least 50% of the funds awarded must be used for direct emergency financial aid grants to students, such as “grants for food, housing, course materials, technology, health care and childcare” (Coronavirus Aid, 2020).
This is all good news for institutions, but includes one big problem, according to the Chronicle of Higher Education: a lack of accurate and specific data for the variables used in the calculation. First, while Pell Grant recipient numbers are tracked, they are reported on distinct headcount rather than FTE. Second, determining what students are exclusively online – is “imprecise and a few years out of date.” (Blumenstyk, 2020).
Regardless of fuzzy data concerns, on April 9, the Department of Education released a breakdown of allocations by institution and made $6.3-billion immediately available. The Department emphasized in their press release that these initial funds should be disbursed to students.
Below is the fund allocation data set from the Department of Education visualized in Tableau Desktop and published with Tableau Public. The range of funding is vast: from more than $63.5-million for Arizona State University to just $291 for the Institute of Professional Careers. The median allocation across the 5,136 named institutions is $758-thousand.
To perform its allocation calculations, the Department of Education stated that it used “the most recent data available from the Integrated Postsecondary Education Data System (IPEDS) and Federal Student Aid (FSA)” (U.S. Department of Education, 2020, April 9). In the case of IPEDS, this refers to 2017-2018 data. Acknowledging the limitations of their methodology, the Department of Education stated in the details of its methodology that it was reserving $50 million “to be provided in a subsequent award”: about 0.4% of the $12.6-billion total (U.S. Department of Education, 2020 April 10).
The $13.9-billion Higher Education Emergency Relief Fund is noteworthy for its size and speed of initial disbursement: 15-days from its signing into law. However, the relief the Fund actually provides will vary significantly by institution. This may be partly due to the methodology the Department of Education implemented that quantifies need using data outdated by a year at best. Calculation quibbles aside, even those institutions receiving millions in funding will find only short-term amelioration. Some institutions are already closely monitoring enrollment indicators for both new and returning students. Expect the education sector as a whole to pursue additional avenues for more funding if the impact of the pandemic extends social distancing measures into the fall.
American Council on Education (2020, April). Assumptions for the simulated allocation of Section 18004-rev2. Retrieved April 9, 2020, from https://www.acenet.edu/Documents/Methodology-CARES-Act-emergency-funding-simulation.pdf
American Council on Education (2020, April). Coronavirus Higher Education Relief Fund: Simulated Distribution of Funds Under the Care Act. Retrieved April 8, 2020, from https://www.acenet.edu/Policy-Advocacy/Pages/HEA-ED/CARES-Act-Higher-Education-Relief-Fund.aspx
American Council on Education (2020, April). Summary of Higher Education Provisions in H.R. 749, The Coronavirus Aid, Relief, and Economic Security (CARES) Act. Retrieved April 9, 2020, from https://www.acenet.edu/Documents/Summary-CARES-Act-HigherEd-Provisions-032620.pdf
Blumenstyk, Goldie (2020, April 8). The Pandemic is Already Hitting Sectors Unevenly, Never Mind the Hitches in Federal Relief. The Chronicle of Higher Education. Retrieved April 8, 2020, from https://www.chronicle.com/article/The-Pandemic-Is-Already/248454
Coronavirus Aid, Relief, and Economic Security Act of 2020, H.R.748. Retrieved from https://www.congress.gov/bill/116th-congress/house-bill/748/text
U.S. Department of Education (2020, April 9). Secretary DeVos Rapidly Delivers More than $6 Billion in Emergency Cash Grants for College Students Impacted by Coronavirus Outbreak. Retrieved April 9, 2020, from https://content.govdelivery.com/accounts/USED/bulletins/285b376
U.S. Department of Education (2020, April 10). Methodology for Calculating Allocations per Section 18004(a)(1) of the CARES Act. Retrieved April 10, 2020 from https://www2.ed.gov/about/offices/list/ope/heerf90percentformulaallocationexplanation.pdf