Senate Agreement on Coronavirus Aid, Relief, and Economic Security Act (CARES Act)Note: This LAW Alert includes information as of March 25, 2020. Votes on the CARES Act are expected as early as today. The CARES Act is phase 3 of Congress’ legislative response to the national coronavirus (COVID-19) outbreak. The first and second phases were 1) $8.3 billion emergency spending package for authorities fighting the spread of COVID-19, enacted into law on March 6th; and 2) the Families First Coronavirus Response Act enacted into law on March 18th. This LAW alert provides highlights of the bill as it pertains to higher education
institutions and students. After five days of negotiating and two failed procedural votes to move the bill to the floor, Senate leadership announced they reached a bipartisan agreement on the CARES Act. Below you will find highlights of the updated language. This bill seeks to: - Establish an Education Stabilization Fund and appropriate $30.75 billion to prevent, prepare for, and respond to coronavirus, domestically or internationally.
- Allocate approximately $14 billion for higher education emergency relief.
- Approximately $12.5 billion would be distributed to all colleges and universities using a formula based on 75% of their Pell full-time equivalency (FTE) of students and 25% of non-Pell FTE.
- Approximately $1 billion would be set aside for Historically Black Colleges and Universities (HBCUs) & minority serving institutions (MSIs).
- Approximately $349 million would be set aside for the Fund for the Improvement of Postsecondary Education (FIPSE).
- Institutions would be able to use these funds to cover any costs associated with campus closures 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 approximately $3 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.
- Establish a maintenance of effort (MOE) requirement that states receiving this aid maintain their own educational funding this year and next year at least at the average level of the three preceding years. However, the Secretary of Education can waive this requirement.
Other proposed provisions in the bill include to:- 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 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 Return of Title IV (R2T4) funds requirement for institutions and students as it relates to students who dropped out of school as a result of COVID-19.
- Allow the Secretary of Education to waive many federal requirements under the Elementary and Secondary Education Act, and
the Higher Education Act.
- Allow the Secretary of Education to defer federal 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.
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