The CARES Act –What it is and is it enough?
Focus Area Financial Wellness Policy and Advocacy Community Regions Public Policy Division Professional Level AVP or "Number Two" Mid-Level New Professional Senior Level Undergraduate VP for Student Affairs
May 11, 2020
The Coronavirus Aid Relief and Economic Security (CARES) Act was passed on March 27, 2020 in response to the unprecedented impact of the COVID-19 pandemic on the United States. Within the $2 trillion dollar package was significant funding for higher education. The Act includes several key areas of relief for institutions, current students, and graduates with student loans. Below is a quick overview of what the CARES Act supports, and the questions that student affairs professionals, like myself are weighing at this time.
Within the package is a $30 billion Education Stabilization Fund. This money will go to both K-12 and Higher Education institutions.
- $3 billion of this is for governors to support the K-12 school districts, colleges, and universities most affected by the pandemic.
- $12.5 billion is designated for higher education institutions of which 50% of this must be used for direct emergency aid for students. Emergency aid can cover such essentials as food, housing, health care, and child care as well as education related costs such as technology and course materials and will not be considered taxable income by the IRS. The remaining funds can be used to cover institutional expenses related to shifting instruction on-line. The US Department of Education allocated 75 % of these funds for institutions based on the number of Pell Grant eligible students with the remaining 25% allocated based on total enrollment.
- An additional $349 million will be allocated by the Secretary of Education for schools that received less than $500,000 from the institutional funding formula (mostly benefitting smaller institutions).
- $1.047 billion of the funds will be dedicated for emergency aid to Historically Black Colleges and Universities and Minority Serving Institutions.
The CARES Act also provides Student Loan relief measures, mostly for borrowers with federally held loans. This will include a suspension of payments, involuntary collections, accrual of interest, garnishing of wages, and offsets of tax refunds through September 30, 2020. This also covers all borrowers in the Public Loan Forgiveness and Income-Driven Repayment programs.
Other benefits for students include:
- Emergency aid for students in the form of Federal Supplemental Educational Opportunity Grants which will not impact the cost of attendance formulas.
- The continuation of Work-Study payments to students who were not able to continue to work due to campus closures.
- Satisfactory Academic Progress Requirements waivers in order to help students continue to receive federal financial aid regardless of academic standing.
- Exemption from lifetime aid limits for students who were not able to complete the semester due to emergency circumstances, for recipients of Pell Grants, loans, and other aid and exemptions for institutions regarding the return of Title IV funds for students who withdrew due to the pandemic (this would usually result in the student owing money to the institution for that portion of the bill covered by the aid).
What does this all mean for our institutions, our students, and higher education in general? What does this mean for the students, like international and undocumented students, who are left out of this funding? Will this aid be enough to prevent institutions from making the drastic cuts or even closing as we saw after the 2008 financial crisis? Will our current students return to campus and will incoming students come to us this fall as this pandemic continues with no vaccine in sight?
I imagine that many of you reading this post know colleagues who have been furloughed, or perhaps even been furloughed yourself. What will this mean for the future of the student affairs profession with so many institutions freezing hiring for open positions and possibly not bringing back staff members who have been furloughed? Will our institutions ever bring our staffing levels back to pre-coronavirus levels? Or, will the value that we provide to ensure the health, safety, and community standards of our campuses become even more valued in the wake of this pandemic?
Only time will tell, but fortified with information about the resources available to our institutions and to our students, we will be able to better perform our roles and provide the leadership and service on our campus that is the hallmark of student affairs professionals everywhere.