This AskRegs Knowledgebase Q&A was updated on May 13, 2021 to include guidance in the May 11, 2021 Higher Education Emergency Relief Fund (HEERF) III Frequently Asked Questions, as it relates to leftover 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).
HEERF I Funds Remaining Unspent as of December 27, 2020, Remaining HEERF II Funds, and HEERF III Funds
For HEERF I student funds that remained unspent as of the enactment of the CRRSAA on December 27, 2020, HEERF II student funds, and HEERF III student funds, schools must expend those grant funds within one year from the date when ED processed the most recent obligation of funds for each grant. In other words, schools that received a HEERF III award under the ARP have one year from the latest Grant Award Notification (GAN) for the ARP to spend all remaining HEERF I, HEERF II, and HEERF III funds. That information will appear in Box 6 on the school's GAN. This represents a change in guidance. See Q&A #39 in the above-referenced HEERF III Frequently Asked Questions.
Schools could reserve a portion of their unspent HEERF I funds, HEERF II funds, and/or HEERF III funds to award students in a later term or payment period (e.g., incoming freshmen in fall 2021, etc.). Leftover HEERF I funds, HEERF II funds, and HEERF III funds can be used to make grants to students for any component of the student’s cost of attendance (COA) or for emergency costs that are related to the Coronavirus. That is, the expense does not have to be directly related to a disruption of campus operations due to Coronavirus.
Furthermore, the school can apply leftover HEERF I grants, HEERF II grants, or HEERF III grants to a student's account as long as the student opts-in with a written authorization to credit the grant funds to their student account and receipt of the grant is not conditioned on such an authorization or conditioned on continued or future enrollment.
In addition, the U.S. Department of Education’s (ED’s) Final Rule, broadens the group of students eligible for HEERF I, HEERF II, and HEERF III to include any individual who is or was enrolled at an eligible institution on or after March 13, 2020. Reference Q&A #11 in the HEERF III Frequently Asked Questions.
HEERF I Funds Spent Before December 27, 2020
Yes. Even though the Recipient’s Funding Certification and Agreement for Emergency Financial Aid Grants to Students does say that the school “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…,” it also gives schools up to one year to spend its HEERF I grant funds. It is NASFAA's understanding that you can hold and spend some funds for summer 2020 and/or the 2020-21 award year, but remember, any grants you make to those students still have to be based on a disruption of campus operations due to Coronavirus and can only be used to pay COVID-related expenses such as food, housing, course materials, technology, health care, and child-care expenses. And, also remember that you cannot use these grant funds to pay a student’s outstanding balance from regularly assessed charges for the summer or fall.
Per Q&A #2 in the Supplemental Frequently Asked Questions under Section 18004 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (published June 30, 2020 and updated August 6, 2020):
"Are emergency financial aid grants to students (made available under the HEERF in the CARES Act) available only to students who were enrolled during the semester or quarter in which the national emergency was declared?
No. Institutions must spend 50 percent of funds received under Section 18004(a)(1) for emergency financial aid grants to students. Section 18004(c) of the CARES Act states that the emergency financial aid grants for students are for “expenses related to the disruption of campus operations due to coronavirus,” and students may incur expenses related to the disruption of campus operations due to coronavirus after the semester or quarter in which the national emergency was declared. Although the intent of the CARES Act is to make emergency financial aid grants immediately available to students, if funds remain after making these immediate disbursements, eligible students enrolled during subsequent terms may receive emergency financial aid grants even if they were not enrolled during the spring 2020 term."
Update Note: This Q&A was updated on January 22, 2021 to reflect requirements under the CRRSAA. Unless specifically indicated, the CRRSAA rules applied to both leftover HEERF I under the CARES Act after December 27, 2020 and to new funds under the CRRSAA (HEERF II funds).
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