CARES Act: US Department of Education Releases Guidance on Higher Education Emergency Relief Fund

May 04, 2020

The US Department of Education is now accepting applications from qualifying postsecondary institutions for emergency grants from funds that have been allocated under the CARES Act. The Department has issued instructions about how to apply for the grants, as well as guidance aimed at assisting institutions in realizing the benefits of the CARES Act.

The Coronavirus Aid, Relief and Economic Security (CARES) Act established a Higher Education Emergency Relief Fund providing $14 billion to support postsecondary education, including $6.28 billion available to colleges and universities for emergency cash grants to cover expenses such as course materials, technology, housing, food, healthcare, and childcare, as described in a press release issued by the US Department of Education (Department) on April 9, 2020. The secretary of the Department issued instructions for institutions to apply for funds under the CARES Act, and the Department maintains a webpage with additional information relating to registration and application.

The Federal Student Aid Office of the Department issued guidance with respect to the CARES Act and how—during the coronavirus (COVID-19) pandemic national emergency only—the Department proposes to enforce the requirements of Title IV of the Higher Education Act of 1965.

As the Department has provided guidance rather than binding policies, colleges and universities must carefully document actions taken as a result of the COVID-19 pandemic. The CARES Act is intended to apply and provide flexibility to schools for the period beginning March 5, 2020 and continuing through June 1, 2020 (subject to certain exceptions described in the guidance), and the guidance is intended to assist institutions, lenders, and students in realizing the benefits of the CARES Act. The below provides a high-level summary of issues; institutions should refer to the Department guidance to apply to specific circumstances.

Academic Provisions

Academic Calendars. In order to enable a student to complete a term, institutions may modify programming to nonstandard or nonterm programming to accommodate certain COVID-19 impacts. Any reduction below 30 weeks of academic instruction for the year requires Department approval.

Approved Leaves of Absences. An institution may approve a student leave of absence due to COVID-19 concerns or limitations, and the institution may retain the Title IV funds for such student when the student resumes enrollment.

Enrollment Status Changes. The Department will not require recalculation of any Pell Grant due to a change in enrollment status; however, all students must be enrolled at least half-time at the time of disbursement of any William D. Ford Federal Direct Loan.

Distance Learning. The Department issued broad approval for institutions to temporarily use distance learning modalities without formal Department approval for programs beginning between March 1, 2020 and June 1, 2020, and to enter into agreements with other Title IV institutions while allowing their home institutions to award credit. Institutions must continue to work with their accrediting agencies and the Department is encouraging accreditors to develop new policies and procedures for rapid approval. The Student Privacy Policy Office issued guidance on continuing compliance with the Family Educational Rights and Privacy Act in connection with virtual learning.

Reporting, Cash Management, and Financial Aid Provisions

Compliance Audits and Audited Financing Statements. The Office of Management and Budget extended the due date for the single audit to the Federal Audit Clearinghouse (additional guidance is expected from the Department).

Compliance with the Clery Act. While institutions must continue to comply with the Clery Act, the Department guidance provides an interpretation of what information is not required to be reported in order to comply with the Clery Act.

Cash Management. Institutions must continue to comply with cash management regulations, but, if unable to do so, should carefully document the inability to do so as a result of COVID-19.

Perkins Loans. Institutions holding Perkins Loans may provide zero interest, suspend payment obligations, and grant forbearance through September 30, 2020.

Pell, Iraq and Afghanistan Service, and TEACH Grants and William D. Ford Federal Direct Loan Program. The April 2020 warning and de-obligation process was cancelled for Pell Grants and will be reevaluated by the Department for July 2020 and October 2020. While there are some nuances and certain rights to request (but not receive) extensions, institutions must generally report information as required under applicable programs.

Federal Work Study. Students who began a federal work study job prior to the declaration of the national emergency are entitled to receive an amount equal to or less than the amount of federal work study wages such students would otherwise receive, even if they were unable to work their hours due to COVID-19. The requirement to apply a portion of federal work study funds to compensate students employed in community service may be waived by the Department, but institutions must submit a waiver request.

Financial Aid Disbursements. Financial aid may be disbursed based on the institution’s original academic schedule.

Students with Disabilities

General Support. While the Department guidance recognizes the challenges of providing accommodations, academic adjustments, auxiliary aids, and services, reasonable modifications to policies, practices, and procedures must be provided where doing so would not impose an undue burden on the institution or cause a fundamental alteration.

Technology. Whether online or on campus, institutions must ensure students are provided with an equal opportunity to access educational programs.

Office for Civil Rights Supports. The Office for Civil Rights has made a webinar available to assist with compliance.

Additional Guidance Expected

Foreign Schools. Programs may be offered by foreign institutions via distance education through programs that would be otherwise eligible. The guidance separately addresses agreements between domestic and foreign institutions for enrollment of foreign students in domestic programs. The Department expects to issue additional guidance with respect to Section 3510 of the CARES Act relating to foreign institutions.

Return of Title IV Funds (R2T4) and Reporting Requirements. The Department is still reviewing the provisions of the CARES Act regarding return of Title IV Funds.

Campus Security Reporting and Equity in Athletics. The Department will provide guidance as it continues to monitor COVID-19 developments.

Compliance Audits and Audited Financing Statements. While the Office of Management and Budget authorized a due date extension, the Department expects to issue guidance.

Satisfactory Academic Progress. The CARES Act is intended to provide flexibility regarding incomplete credits and the Department intends to provide additional guidance on how such flexibility should be implemented.

Filing Deadline for Fiscal Operations Report and Application to Participate. The Department will provide guidance as it continues to monitor COVID-19 developments.

Supplemental Education Opportunity Grant. Students who would have otherwise received federal work study wages had they started their jobs prior to the national emergency may be entitled to receive grants and the Department will issue guidance on allocations.

Coronavirus COVID-19 Task Force

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If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Deborah Davidson

Scott McBride

New York
Christopher Dlutowski
Martha Stolley

Klair Fitzpatrick
Kathleen A. Keyser
Ali Kliment

Washington, DC
Gregory L. Needles
Brad Nes
Robert Smyth