Coronavirus (COVID-19) Emergency Package ProposalsNote: This LAW Alert includes information as of March 24, 2020. Negotiations in Congress are ongoing and changes to the proposed legislations are likely. Votes on a phase 3 legislation are expected sometime this week. Congressional leaders in the Senate and House are negotiating a large emergency stimulus package in response to the national coronavirus (covid-19) outbreak. This package will be a phase 3 legislative response. The first and second phases were 1) $8.3 billion emergency spending package for authorities fighting the spread of COVID-19, passed on March 6th; and
2) the Families First Coronavirus Response Act enacted into law on March 18th. This LAW alert provides highlights from the proposed phase 3 package as it pertains to higher education institutions and students. Senate: Coronavirus Aid, Relief, and Economic Security Act (CARES Act)The CARES ACT has been introduced by Senate Republicans. Senate and House Democrats oppose the bill in its current form and two procedural votes to move the bill to the floor have failed (one Sunday afternoon, one Monday). Negotiations on this bill are ongoing. This bill seeks to: - Establish an Education Stabilization Fund and appropriate $20 billion to prevent, prepare for, and respond to coronavirus, domestically or internationally.
- Allocate $6 billion for higher education emergency relief.
- 90% of funds would be distributed to all colleges and universities (public, private nonprofit, and private for profit) using a formula based on 75% of their Pell full-time equivalency (FTE) of students and 25% of non-Pell FTE.
- 5% of funds would be set aside for Historically Black Colleges and Universities (HBCUs) & minority servicing institutions (MSIs).
- 5% of funds would be set aside for Fund for the Improvement of Postsecondary Education (FIPSE).
- Institutions would be able to use these funds to cover any costs associated with campus closure or significant changes to the delivery of instruction due to the coronavirus.
- At least 50% of such funds would be required to provide emergency grants to students for expenses directly related to coronavirus and the disruption of campus operations.
- Provide $2 billion for a state flexibility fund that states could allocate based on the needs of elementary and secondary schools, as well as institutions of higher education in their state.
Other proposed provisions in the bill include to:- Provide the Secretary of Education with broad authority to provide waivers from the Elementary and Secondary Education Act, the Higher Education Act, and the Carl D. Perkins Career and Technical Education Act, except for civil rights laws.
- Allow the Secretary of Education to defer student loan payments, including principal and interest, for 3 months without penalty to the borrower. Allow the Secretary to defer payments for an additional 3 months if necessary pursuant to the public health emergency
declaration.
House: Take Responsibility for Workers & Families ActAfter the CARES Act failed to move forward Sunday March 22nd, House Speaker Pelosi announced House Democrats would move forward with drafting their own phase 3 legislation. This bill was introduced late Monday March 23rd and seeks to: - Establish a State Fiscal Stabilization Fund and appropriate $50 billion to prevent, prepare for, and respond to coronavirus.
- At least 30% of funds (~$15 billion) would be allocated for public institutions of higher education using a formula based on their share of Pell FTE and non-Pell FTE.
- Institutions could use these funds for education and general expenditures.
- Institutions could also use the funds for grants to students for expenses directly related to coronavirus and the disruption of campus operations (including emergency financial aid to cover housing, food, technology, healthcare, and childcare costs).
- Institutions could use funds for technology and services needed for distance learning and training of faculty & staff.
- Provide an additional $1.5 billion for HBCUs and MSIs.
- Provide $8 billion for FIPSE for public and private nonprofit institutions.
- Institutions that receive funding through the State Fiscal Stabilization Fund would not be allowed to receive additional funds through FIPSE.
- $1 million minimum grants would be for private non-profit institutions.
Other proposed provisions in the bill include to:- Require the Secretary of Education to make payments on behalf of student loan borrowers including those in the Federal Family Education Loan (FFEL), Perkins, and Direct Loan programs for each month during the national emergency period.
- Require the Secretary of the Treasury to make payments on behalf of private student loan borrowers.
- Provide all student loan borrowers with up to $10,000 in debt relief during these monthly payments.
Other Higher Education Provisions
Proposed in Both Bills:- Waive the institutional matching requirement for campus-based aid programs.
- Allow institutions to transfer unused work-study funds to be used for supplemental grants.
- Allow institutions to award additional supplemental education opportunity grant (SEOG) funds to students impacted by COVID-19.
- Allow institutions to issue work-study payments to student who are unable to work due to work-place closures.
- For students who dropped out of school as a result of
COVID -19, exclude the term from counting toward lifetime subsidized loan eligibility, and lifetime Pell eligibility.
- Students impacted by COVID -19, would not be required to return Pell grants or student loans to the Secretary of Education.
- Students impacted by COVID-19 would not have their grades for affected terms calculated into their satisfactory academic progress (SAP) requirements to continue to receive Pell Grants or student loans.
- Waive the requirement that institutions calculate the amount of grant or loan assistance that the institution must return to the Secretary of Education for students who dropped out of school as a result of COVID-19.
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