What Factors Do We Consider When Awarding HEERF I Student Grants Under the CARES Act?

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This AskRegs Knowledgebase Q&A was updated on May 17, 2021 to include guidance in the May 11, 2021 Higher Education Emergency Relief Fund (HEERF) III Frequently Asked Questions and the May 14, 2021 Final Rule as it relates to HEERF I grants under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), HEERF II grants under the 2021 Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA, Section 314 of the Consolidated Appropriations Act, 2021), and HEERF III grants under the American Rescue Plan Act of 2021 (ARP).

These are the factors that schools must consider when awarding HEERF I grants to students under the CARES Act.

Use of Funds: Until passage of the CRRSAA, under the CARES Act, and as stated in the Recipient's Funding Certification and Agreement for Grants to Students, HEERF I grants to students were intended to go 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. Any application process or policies and procedures that you had needed to meet this singular goal.

The April 21, 2020 Frequently Asked Questions made it clear that HEERF I grants to students could not be applied toward the student's outstanding balance at the school, stating, "The disbursement of the emergency financial aid grant to the student must remain unencumbered by the institution; debts, charges, fees, or other amounts owed to the institution may not be deducted from the emergency financial aid grant." This meant that you could not pay outstanding charges on the student's account even if you had the student's permission to do so.

Change in Guidance with Passage of the CRRSAA on December 27, 2020: According to Q&A #11 and #12 in the HEERF III Frequently Asked Questions, students can opt in to voluntarily provide written affirmative authorization to allow schools to apply leftover HEERF I student grants (unspent as of December 27, 2020), HEERF II student grants, and HEERF III student grants to student ledger account charges for any component of the student’s cost of attendance (COA) or for emergency costs that arise due to Coronavirus, such as tuition, food, housing, health care (including mental health care), or child care. The charges or costs do not have to be related to a disruption in campus operations.

This is true even in cases where the charges were posted to the student's account prior to December 27, 2020 and for an outstanding balance consisting of those allowable costs. This is also true for costs that were incurred by the student prior to December 27, 2020 and for which the school is delivering the HEERF grant funds directly to the student. However, as indicated in Q&A #12 in the revised HEERF II Frequently Asked Questions, "Institutions have this expanded flexibility to use unliquidated (unspent) funds effective December 27, 2020 (the date of enactment of the CRRSAA), for costs incurred on or after March 13, 2020, the date on which the President declared a national emergency due to the COVID-19 pandemic (85 FR 15337)."

Student Eligibility: HEERF funds are not Title IV federal student aid funds. According to the May 14, 2021 Final Rule, any individual who is or was enrolled at an eligible institution on or after March 13, 2020 is now eligible for HEERF I, HEERF II, and HEERF III student grants. According to the above-referenced HEERF III FAQs and the Final Rule, this is true regardless of whether the student completed a FAFSA or is eligible for Title IV federal student aid. And, it applies retroactively to all students and for all three HEERF programs.

It means that, in addition to U.S. citizens and permanent residents, refugees, asylum seekers, Deferred Action for Childhood Arrivals (DACA) recipients, other DREAMers, and similar undocumented students are also eligible for student grants from all three HEERF programs. This also means that schools can award HEERF I, HEERF II, and HEERF III to students who are not enrolled in Title IV-eligible programs. This includes nondegree, noncredit, and continuing education students, students who are simultaneously enrolled in high school and college, students who have graduated or withdrawn, and so on.

The HEERF III FAQs also explicitly notes that international students can receive these funds, but that institutions still must ensure that they prioritize awarding of funds to students with exceptional need. Institutions are encouraged in the guidance to prioritize domestic undergraduate students in awarding these grants, but graduate students are eligible nonetheless.

This guidance and Final Rule represents a break from the Trump administration's previous interpretation, which held that students needed to be Title IV-eligible students in Title IV-eligible programs to qualify for HEERF grants, and that 8 USC 1611(a) of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) prohibited nonqualified aliens from receiving federal benefits, including HEERF grants. See AskRegs Q&A, Must a Student Be Title IV-Eligible To Receive a HEERF I, HEERF II, or HEERF III Grant?, for historical background information.

Reference the Final Rule and Q&As #7 and #8 in the HEERF III FAQ.

Student Grant Applications or Forms: Institutions must identify students who have incurred expenses related to the disruption of campus operations due to COVID-19. There is no requirement in the law to have an application or a form to apply for these grants. You only need to be able to justify that the student has expenses related to the disruption of campus operations due to Coronavirus. Whether you create an application or a form for your students is up to your school. Likewise, any signature requirements are up to your school, and because this is not our area of Title IV expertise, NASFAA does not review or approve signatures or signature processes. Refer to AskRegs Q&A, Are Electronic Signatures Acceptable For Non-Loan Financial Aid Documents?

That said, there are circumstances where an application is likely necessary. In her cover letter to College and University Presidents, the Secretary of Education, wrote, “The CARES Act provides institutions with significant discretion on how to award this emergency assistance to students. This means that each institution may develop its own system and process for determining how to allocate these funds, which may include distributing the funds to all students or only to students who demonstrate significant need.” Even if schools are thinking about awarding the grants to all students instead of on a case-by-case basis, what schools are running up against is the fact that they need to be able to justify their assumption that every single student has an expense related to the disruption of campus operations due to coronavirus. If you can do that, you should not need an application or a form.

It may be easier to identify groups or categories of students that you know had or have specific expenses that would qualify.

Student Expense Categories: You are permitted to have categories of students for purposes of awarding HEERF grants, but only if you are sure everyone in that category has the same types of COVID-19 related expenses. For example, students in a fine arts program that is now offered via distance education may need to purchase additional supplies that normally would have been provided at the school. If the school can identify these students and document this extra expense itself, an application or a form would not be necessary.

As another example, you could create a category for all students who were forced to move out of the dormitories and who had the same types of relocation expenses. You then could create an average expense for everyone in that category for having to relocate off campus.

If you can document how you established the category of students, your rules for awarding HEERF grants to students in that category, and how you determined that everyone in that category had the same types of COVID-related expenses, then you would not need to document it on a student-by-student basis for all students in that category; you would not need an application or a form.

Student-By-Student Documentation: If you cannot create categories of students as indicated above, then you likely will need to document on a case-by-case basis that each student had extra COVID-19 related expenses. This does not mean you have to document an itemized list of expenses for each student; there is no requirement in the law for that.

Documentation can be an application or a form signed by the student and allowing the student to just check off a box that says something like, "I've incurred at least $500 in extra housing costs due to COVID-19." It can be a signed statement from the student indicating he, she, or they incurred a specified total amount of extra expenses due to the COVID-19 related disruption. It can be a signed statement from the student listing the extra COVID-19 related expenses they incurred. It could include receipts for expenses, but:

In the end, the documentation is solely at the school’s discretion.

Professional judgment (PJ) requirements under Section 479A of the Higher Education Act of 1965 (HEA) [20 USC 1087tt(a)], as amended, do not apply when awarding these funds. There is confusion around PJ because it is specifically mentioned in the Certification and Agreement related to the calculation of the student’s expected family contribution (EFC). NASFAA has confirmed with ED that the April 3, 2020 Electronic Announcement is correct and that federal and state emergency aid is not included as income in the EFC calculation so there is no need to use PJ to exclude it.

Grant Amounts:  It is up to the school alone to determine the amount of each HEERF grant awarded to its students. ED encourages institutions to prioritize awarding of emergency grants to students with the greatest need, and suggests using the maximum annual Federal Pell Grant amount for the applicable award year as the maximum emergency grant, but these are not requirements. Other than a suggested grant amount, HEERF eligibility is not tied to Pell eligibility in any way--for example, the student does have to be Pell-eligible to receive a HEERF grant. Refer to the Certification and Agreement.

Awarding Students: Again, HEERF grants are not Title IV funds, so Title IV awarding/packaging rules do not apply. The April 3, 2020 Electronic Announcement states that federal and state emergency aid (in the form of grants and low-interest loans) shall not be counted as income for calculating a student's expected family contribution (EFC), and it is not included as estimated financial assistance (EFA) when packaging the student with Title IV aid. As such, HEERF grants can exceed the student’s cost of attendance (COA) because they are neither Title IV aid nor EFA.

According to Q&A #17 in the HEERF III FAQs, you cannot include HEERF student grants in the student's financial aid package or in a Title IV financial aid offer. HEERF student grant award notifications must be sent separately.

Paying Grants to Students: See AskRegs Q&A, How Must Schools Pay HEERF I, HEERF II and HEERF III Grants To Students?

Sample Applications: Visit NASFAA's Member-Generated Content Library for COVID-19 Emergency Grant Application Samples. Also, you may want to consult with your peer institutions to exchange ideas and/or forms.

Reporting Requirements: Whatever its policies and procedures, the school will need to be able to meet the reporting requirements in section 4(c) of the Certification and Agreement, which requires that schools report the following information:

Refer to AskRegs Q&A, What Are the Reporting Requirements For Higher Education Emergency Relief Fund Grants To Students?, for more information on the reporting requirements. Additional ED guidance is forthcoming on those.

Remember: As explicitly stated in the Certification and Agreement, HEERF I student grants cannot be used to reimburse the school 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 the school previously issued to students. There is one exception. See AskRegs Q&A, Can the School Reimburse Itself From the Higher Education Emergency Relief Fund Student Share?

If any of this guidance changes, we will update this AskRegs Knowledgebase Q&A and post it in Today's News.

Update Notes:

AskRegs Q&As represent NASFAA's understanding of regulatory and compliance issues. They are FOR INTERNAL USE ONLY. While NASFAA believes AskRegs Q&As are accurate and factual, they have not been reviewed or approved by the U.S. Department of Education (ED). If you should need written confirmation of AskRegs information for audit or program review purposes, please contact your ED School Participation Division. NASFAA shall not be liable for technical or editorial errors or omissions contained herein; nor for incidental or consequential damages resulting from the furnishing, performance, or use of this material.