Can the School Reimburse Itself From the CARES Act HEERF I Student Share?

This AskRegs Knowledgebase Q&A has been updated to reflect the U.S. Department of Education's (ED's) clarification of its own guidance in the April 21, 2020 Frequently Asked Questions about the Emergency Financial Aid Grants to Students under Section 18004 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Under the CARES Act, the Higher Education Emergency Relief Fund (HEERF) is divided into two shares--the HEERF I Student Share and the HEERF I Institutional Share. This AskRegs Q&A only addresses the HEERF I Student Share.

Item 2 in the Recipient’s Funding Certification and Agreement for Grants to Students reads (bolded for emphasis), "Recipient agrees to promptly make available emergency financial aid grants from the advanced funds directly to students for their expenses related to the disruption of campus operations due to coronavirus, such as food, housing, course materials, technology, health care, and child-care expenses. Recipient shall not use the advanced funds to reimburse itself for any costs or expenses, including but not limited to any costs associated with significant changes to the delivery of instruction due to the coronavirus and/or any refunds or other benefits that Recipient previously issued to students."

Under the April 21, 2020 Frequently Asked Questions, whether the school can reimburse itself from the HEERF Student Share depends on the type of reimbursement.

Emergency Grants From Institutional Funds: Institutions may use HEERF Student Share funds to reimburse themselves if they provided emergency grants to students, but only if the institutional emergency grant:

1. Was made to cover authorized expenses (noted above) related to the disruption of campus operations due to COVID-19;
2. Was made to students eligible to receive HEERF Student Share funds, as noted in AskRegs Knowledgebase Q&A, How Do We Apply Title IV-Eligible Student Guidance For CARES Act Grants To Students?; and
3. Was made on or after March 27, 2020--the date the CARES Act was enacted.

An institution must document that reimbursements for institutionally funded emergency grants to students are made in accordance with the CARES Act. In such instances, ED would consider the institution to have made an advance payment of HEERF dollars to students in anticipation of the receipt of the federal deposit.

The school cannot reimburse itself from the HEERF Student Share for institutional emergency loans to students. Of course, you can award new funds from the HEERF Student Share to the same students who were already awarded institutional emergency funds.

Any Other Institutional Costs: The school cannot reimburse itself from the HEERF Student Share for any other funds it has spent on students related to COVID-19, including but not limited to:

• Refunds of institutional charges, such as tuition, fees, room, board, etc.;
• Costs for other resources the school provided directly to students, such as giving a student a computer or internet hotspot, or filling an on-campus food pantry;
• Costs associated with significant changes to the delivery of instruction; or
• Any other refunds or benefits the school previously issued to students.

The HEERF Student Share funds must go directly from the school to the student, and the student can then use their grant to cover the COVID-19 related expenses. Schools may use the HEERF Institutional Share to reimburse themselves for refunds made to students on or after March 13, 2020, issued for room, board, tuition, fees, etc. as a result of significant changes to the delivery of instruction due to COVID-19.

Note: For Emergency Federal Supplemental Educational Opportunity Grant (FSEOG) guidance, see AskRegs Q&A, How Can Schools Use Campus-Based Funds As Emergency Aid?