As 2020 disappears in the rear-view mirror, a glimmer of good news has appeared in the form of federal financial assistance for K-12 and higher education.
We’re all aware that the Consolidated Appropriations Act of 2021 passed on Dec. 21, 2020, but the financial support it offers to K-12 and higher ed institutions can seem difficult to sort out.
Within this $2.3 trillion spending bill is $1.4 trillion in appropriations that will keep the government running for the upcoming year, plus a $900 billion relief fund (referred to as COVID IV), specifically directed at the economic impact of COVID-19.
It would take too long to give a granular breakdown of all the funding designated for education in the larger Act – from K-12 institutions through colleges and universities – so we’ve put together a high-level review in an FAQ format and this shareable infographic.
Keep in mind that the information below is based on our analysis at this time; if changes happen, we’ll do our best to make updates.
And, as always, administrators and other school officials should rely on trusted legal advisors to understand the details and impact of funding, spending, and any administrative decisions.
COVID-19 relief funding Q&A
Q: How much funding is available to colleges and universities?
A: The Act provides just shy of $82B to support the Education Stabilization Fund. Of that, about $27B is intended for higher education. Big numbers, but still smaller than many education officials had hoped for, given the financial impact of COVID-19.
Q: How much funding is available to K-12 schools?
A: The Act provides just shy of $82B to support the Education Stabilization Fund. Of that, about $54B will be given directly to K-12 schools, with an additional $818M designated for outlying areas and tribal education. Again, smaller than many education officials had hoped for.
Q: How will funding be distributed?
A: Available funds will be split between two pools, both established under the CARES Act of 2020:
- The Higher Education Emergency Relief Fund (HEERF)
- the Governor’s Emergency Education Relief Fund (GEERF)
Q: How much funding will go through HEERF, and how will it be shared?
A: HEERF will receive about $23B, to be distributed via the G5 System, same as under the CARES Act. The total amount will be shared among the following:
- $20.2B in institutional funding
- $1.7B in additional aid for Historically Black Colleges and Universities (HBCUs) and Minority-Serving Institutions (MSIs)
- $113M in supplementary emergency grants
- $908M for student financial aid at for-profit institutions
Q: How much funding will go through GEERF, and how will it be shared?
A: $4.05B will be provided via GEERF. These funds are distributed state-by-state, using the same formula as the CARES Act, which – in the most basic terms – looks something like this:
- 60% based on a state’s relative population of 5- to 24-year-olds
- 40% based on a state’s eligible student population, as determined by the Education and Secondary Education Act (ESEA)
Q: How will GEERF funding be distributed among schools?
A: $2.75B will go to private K-12 schools.
The remaining $1.3B in GEERF funds will be at the discretion of state governors, who can decide (within federal guidelines) how much goes to public or private institutions, as well as how much to K-12 or higher ed institutions.
Q: How is this funding different from the CARES Act?
A: Here are four main differences between this round of funding and CARES:
- The Act offers higher education roughly $8B more than CARES did.
- Act funds are not available to for-profit colleges (except, as mentioned above, for student financial aid). This means a larger share of funding is available to nonprofit institutions.
- This round of funds has a broader range of uses. Under CARES, funding via HEERF could be used only to cover costs related to remote instruction. Under this Act, schools can use funds to provide student services related to the pandemic. We believe the broader definition will now include HVAC and other facilities improvements that can help students return to campus more safely.
- Also, the Act’s new funding formula will include part-time students, while the CARES Act counted only full-time students. This means (potentially) more funds directed to community colleges in particular, since they typically enroll more part-time students.
Q: What can the new funding be used for?
A: Nonprofit educational institutions, both public and private, can use COVID IV funds for any of the following:
- Institutional expenses related to COVID-19, for example, intensified cleaning and disinfecting programs, air quality improvement, and projects related to social distancing and virus mitigation.
- Student support services related to COVID-19, including student housing, food, and healthcare facilities
- Student financial aid, including tuition
Q: What can COVID IV funding not be used for?
A: The limitations on COVID IV funding uses are a lot like the CARES Act. Educational institution receiving these funds cannot use them for:
- Senior administrators’ salaries, bonuses, benefits, incentives, contracts, or cash benefits of any kind
- Stock buybacks, dividends, options, or capital distributions
- Marketing or recruitment
- Capital improvements to athletic facilities or facilities for sectarian instruction or worship
Q: What if we have unspent CARES funds?
A: Good news. Unspent CARES funds now fall under the expanded uses of this Act. The only caveat? At least half of total CARES funding received still has to be used as financial aid grants to students.
Q: What else should we know about COVID IV funding?
A: There’s more than we can talk about here, including further relief funding from the incoming federal administration, student financial aid, work study programs, the Paycheck Protection Program, and requirements about paying employees and contractors. You can review the Consolidated Appropriations Act of 2021 here.
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