Last week, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The sweeping $2 trillion package provides relief in the form of small business loans, assistance to hard-hit industries, and direct cash payments to American households. The bill also contains provisions designed to help students and institutions of higher education.
$30 billion in emergency funding to the education sector
The CARES Act sets aside $30 billion in the Educational Stabilization Fund to support K-12 education, postsecondary education, and governors’ emergency education costs. Roughly half of the stabilization fund goes toward higher education efforts.
$14 billion for colleges and universities
About 46% ($14 billion) of the Educational Stability Fund is allotted to “institutions of higher education,” or IHEs, to “prevent, prepare for, and respond to coronavirus.” The Department of Education is responsible for distributing the aid to institutions using a formula that prioritizes funding for the schools with the greatest numbers of full time Pell-eligible students.
From there, IHEs are required to give 50% of their aid directly to their students in the form of emergency grants and assistance. The other 50% of their aid can be used for a variety of COVID-19-related expenses including technological support, health care costs, or to replace lost revenue.
According to a memo from the Congressional Research Service (CRS), Florida IHEs are expected to receive an estimated $760.9 million in federal aid money.
Using IPEDS data, the American Council on Education (ACE) has compiled a searchable database on projected CARES Act funding for all institutions that receive federal financial aid dollars.
Using these data, FCAN calculates that Florida College System institutions are eligible for a potential $254.7 million, with the most money directed towards Miami Dade College ($47.4 million). The ACE database also includes information for Florida technical centers and colleges as well as Independent Colleges and Universities of Florida (ICUF)-affiliated institutions.
Based on ACE data, the State University System institutions are expected to receive $251.2 million with totals ranging from $47.6 million to the University of Central Florida to just under $1 million to New College of Florida.
Additionally, the Educational Stabilization Fund sets aside roughly $1 billion for institutions serving large populations of minority students, with priority given to institutions receiving less than $500,000 from the Educational Stabilization Fund’s general IHE aid calculation.
$3 billion for governors
Understanding that states may need flexibility in education relief spending, the CARES Act allocates roughly $3 billion (9.8% of the total Educational Stabilization Fund) to state governors to be used at their discretion to support public and private K-12 and postsecondary institutions as needed. Governor Ron DeSantis is expected to receive $173.674 million or 5.88% of the $3 billion to support education during this unprecedented time.
Temporary suspension of student loan payments
In addition to providing relief to postsecondary institutions, the CARES Act contains crucial measures to protect students from financial fallout. Federal student loan payments will be suspended through September and will not accrue interest during this time. If a student does continue payments, each month will still count as a qualifying payment toward a borrower’s loans.
Relief for students who withdraw
Even with support from the federal and state government, some students affected by COVID-19 may need to withdraw from classes for a period of time. Typically, students who receive Title IV funds (Pell Grants, Iraq and Afghanistan Service Grants, TEACH Grants, Direct Loans, Direct PLUS Loans, Federal Supplemental Educational Opportunity Grants [FSEOGs] and Federal Perkins Loans) must abide by certain requirements in the event they withdraw from classes, such as the partial repayment of assistance money.
The CARES Act relaxes the rules for students who are forced to withdraw for reasons related to the COVID-19 pandemic. For example, affected students receiving Pell Grants or other forms of financial aid will not be required to return any amount of their assistance money. Any semesters that a student is unable to complete because of COVID-19 will not count against the time limits for Pell Grants or federal subsidized loans.
Federal Work Study Relief
For the academic years 2019-2020 and 2020-2021, postsecondary institutions will not be required to meet their matching requirements for the Federal Work Study (FWS) and Federal Supplemental Educational Opportunity Grant (FSEOG) programs. Any unexpended FWS funds may be transferred to the institution’s FSEOG allotment, which may be used to offer financial aid to undergraduate and graduate students. Students participating in FWS program will also be given leniency during the pandemic. The CARES Act allows institutions to continue paying FWS students who are unable to fulfill their duties due to COVID-19 for up to one academic year.
Given the evolving situation around COVID-19 and the impacts on postsecondary education, FCAN will continue to update our COVID-19 resources page with new developments and information.