Major Updates

• Major Coronavirus Relief Bill (CARES Act) Passes | Provides Financial Aid Relief, $30B+ Stabilization Fund for Education
  After temporarily stalled negotiations, Congress has passed a $2.2 trillion stimulus package in response to the Covid-19 crisis, the CARES Act, the largest package of its kind ever passed into law. Higher education advocates, including UPCEA, felt that the assistance included for students and institutions in the CARES Act is far below what is essential to respond to the financial disasters confronting higher education. And so we are asking Congress for additional legislation with more robust support, and are hopeful that will occur in the coming weeks.
  
  Some of the major provisions included in the CARES Act that are related to higher education include:

• A $30B Education Stabilization Fund 
  • Approximately $14B of which was set aside for higher education specifically, with 90% of that amount going directly to institutions via a calculation based on current financial aid funding to non-distance education students. At least 50 percent of funds (or $6.279 billion) awarded to institutions must be used to provide direct emergency aid to students, including “grants to students for food, housing, course materials, technology, health care, and child care.” Institutional use for the other portion of the funds are less specific, and can be used to “defray expenses for institutions of higher education, such as lost revenue, technology costs associated with a transition to distance education.” However, there has been recent discussion about whether partnering with an Online Program Management provider would disqualify the institution for reimbursement. Recipients of funds must also retain current employees to the “maximum extent practicable.” In addition to asserting more funding is needed overall, UPCEA and others have asked the Department to issue these funds quickly. 
    • UPDATE – The Department of Education has released the final calculations of how much institutions will receive from these funds and more information about distribution of these funds, and will begin distributing the student portion of the funding as early as next week. Click here to access the Department’s website. The American Council on Education (ACE) has attempted a calculation of what the distribution of funds may look like for every institution eligible, but the details of the exact amounts and calculations have not been released by the Department of Education, so we caution that this is merely ACE’s estimate based on available information (methodology explained here). 

• • Governors and states will be provided with $3B of this fund to specifically use as they see fit to further K-12 or postsecondary education. These funds will be distributed to states to make their own judgement on what is most important for educational needs in their respective states.

 

• Federal Work Study, Financial Aid, suspension of certain loan payments and other impacts. Other major provisions include allowing an institution to provide existing Federal Work Study dollars to a student who is unable to work due to workplace closures; allows for deferment of federal student loan payments, principal, or interest for six months; does not require an institution to return Title IV funds if a student leaves school early due to COVID-19, and also does not impact the student’s satisfactory progress or lifetime eligibility calculation for Pell Grants for a limited time.

 

• A waiver authority originally included in draft language, allowing for the Secretary of Education to waive certain regulations or deadlines, did not make it into the final bill. Meaning absent new legislation, statutory and regulatory deadlines will go unchanged. We are hoping that this authority is granted in a future bill.

 

• SBA Paycheck Protection Program + Treasury Loan Program – One of the major portions of the bill which is not directly related to higher education but may be accessible to institutions is the Small Business Administration fund for loans to organizations with less than 500 employees, which will be “fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities”. The program has been so popular, the next relief package may be dedicated to allocating another $250 million dedicated to this initiative. See more details on the Paycheck Protection Program here. The CARES Act also provides $500 billion via the Treasury for loans to eligible organizations with between 500 and 10,0000 employees. The program will not charge interest rates on the loans higher than two percent per year, and payments will only be due six months after receiving the loan. See more details on the Treasury’s loan program here.

 

• Proposed Regulations Released from US Department of Education on CBE, RSI, Credit Hour and more; Comments due May 4th
  Proposed regulations stemming from the 2018-2019 negotiated rulemaking sessions where consensus was reached, have been released. This is the third release in what is expected to be four total, and addresses important topics such as: 
  • definition of a correspondence student (one who takes over 50% correspondence courses) and how that calculates into an institution’s ability to receive Title IV funds; 
  • amending the definition of “distance education” to better reflect modern technologies; 
  • providing specificity and structure around “regular and substantive interaction” by defining integral pieces and providing clarity on what the terms “regular,” “substantive,” and “instructor” mean); 
  • competency-based education; 
  • the definition of a credit hour becomes more lenient; 
  • federal loan disbursement for subscription based models; 
  • clarify and simplify the requirements for direct assessment programs, including how to determine equivalent credit hours

 

The Department released these regulations and said the Covid-19 crisis underscored and accelerated the need for these proposed rules to move forward to help institutions better connect with students, though some critics feel the Department had already waited too long and that the proposed changes were overdue.

The regulations are dense, the period to comment is limited, and your input is important. As always, we encourage our members to comment, through your institution, by coordinating with your President’s and government affairs office, and/or on your own private time as a concerned citizen. These public policies will be created after review of all of the comments gathered over the next month. The final rule will be released by the department following this comment period later this year, and will go into effect July 1, 2021. The public comment period deadline is May 4. Click here to comment on these regulations. 

Read the full press release from the Department of Education

Click here to view the full set of proposed regulations

• Further Updated US ED Guidance on COVID-19 Interruptions.
  The Department of Education has followed up with more specifics in regards to its March 5th guidance for institutions regarding interrupted studies due to Covid-19. The guidance specifies the period in time in which the guidelines apply (until June 30, 2020), except as otherwise stated in the document. Regarding the broad approval for online and distance education programs: “the Department provides broad approval to institutions to use distance learning modalities without going through the standard Department approval process, even if the institution would normally be required to seek Departmental approval for the use or expansion of distance learning programs. At this time, this flexibility applies only to payment periods that overlap with the Department’s March 5, 2020, guidance or that begin on or between March 5 and June 1, 2020. If an institution chooses to continue offering a new program or using distance education in a manner requiring the Department’s approval after that point, it may be required to obtain approval under the Department’s and its accrediting agency’s applicable policies and procedures.”

We recommend that all institutions document any and all actions taken in regards to these measures, or any other changes occurring due to Covid-19 disruption, as they will be helpful upon accreditation or Departmental review. If you have questions about this guidance, the Department has created an email address which you can use to get a response – [email protected]. 

Click here to read the full letter.  

 

Further Reading

• State-by-State COVID 19 Education Legislation Tracker (Georgetown University)
• Colleges Get Billions in Coronavirus Relief, but Say Deal Falls Short of Needs (New York Times)
• College groups push for suspension of financial responsibility scores as feds release distance ed rule (Inside Higher Ed)
• The CARES Act: Summary of provisions impacting higher education institutions and borrowers (Thompson Coburn LLP)