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 January 22, 2021 simply to note that the guidance outlined in this Q&A applies only to Higher Education Emergency Relief Fund (HEERF) grants under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (HEERF I funds). A separate Q&A provides guidance for awarding HEERF funds under the 2021 Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA, Section 314 of the Consolidated Appropriations Act, 2021) (HEERF II funds). At the time of this update, NASFAA does not yet know if the student eligibility requirements in the June 17, 2020 Interim Final Rule still apply to leftover HEERF I funds awarded after December 27, 2020.

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

Use of Funds: Under the CARES Act, and as stated in the Recipient's Funding Certification and Agreement for Grants to Students, HEERF grants to students are 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 have need to meet this singular goal.

The April 21, 2020 Frequently Asked Questions makes it clear that HEERF grants to students cannot 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 means you cannot pay outstanding charges on the student's account even if you have the student's permission to do so.

Not Title IV Funds But the Student Must Meet Title IV General Student Eligibility Criteria: HEERF funds are not Title IV federal student aid funds, but only students who are or could be eligible to participate the Title IV programs under Section 484 in Title IV of the Higher Education Act of 1965, as amended (HEA) [20 USC 1091(a)] may receive these funds. Effective with publication of the June 17, 2020 Interim Final Rule, the Title IV eligibility criteria is now enforceable by law. The Interim Final Rule also requires the student to be enrolled in a Title IV-eligible program at the institution, and it explicitly prohibits undocumented students, Deferred Action for Childhood Arrivals (DACA) students, and international students from receiving HEERF grants to students.

See AskRegs Q&A, Must a Student Be Title IV-Eligible To Receive a Higher Education Emergency Relief Fund Grant? for more information on the:

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 included as estimated financial assistance (EFA) when packaging the student with Title IV aid.

If the school chooses to use its financial aid management system (FAMS) to award these grants, the appearance of overawards may occur systematically. It is our understanding that HEERF grants can exceed the student’s cost of attendance (COA) because they are neither Title IV aid nor EFA. However, we have asked ED to confirm our understanding. Until we hear back from ED, you might want to delay any adjustments to your system rules to remove these grant funds from any overaward calculation within the system.

Paying Grants to Students: See AskRegs Q&A, How Must Schools Pay Higher Education Emergency Relief Fund 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 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.

Note: This AskRegs Q&A was previously updated to point out the June 17, 2020 Interim Final Rule, which requires students who receive HEERF student grants under Section 18004 of the CARES Act to be Title IV-eligible students enrolled in Title IV eligible programs. The Title IV eligibility requirement is enforceable as of the June 17, 2020 publication date.

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