Can We Hold HEERF Student Grants For an Upcoming Term Or Award Year, Or For Incoming Freshmen?

KA-34818 Helpfulness Rating 1,616 page views

This AskRegs Knowledgebase Q&A was updated on January 22, 2021 to reflect requirements under the 2021 Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA, Section 314 of the Consolidated Appropriations Act, 2021). Unless specifically indicated below, the CRRSAA rules apply to both leftover Higher Education Emergency Relief Fund (HEERF) grants under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (HEERF I funds) after December 27, 2020 and to new funds under the CRRSAA (HEERF II funds).

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."

Remaining HEERF I Funds HEERF II Funds Spent on or After December 27, 2020
For HEERF I student funds that remained unspent as of the enactment of the CRRSAA on December 27, 2020, and HEERF II student funds, schools still have one calendar year from the date of their award notification to expend those funds, respectively.  HEERF I funds must be spent within one year of the school’s original Grant Award Notification (GAN) for those funds, so it may be a best practice to spend HEERF I funds before HEERF II funds. HEERF II funds have a later “spend by” date--that is, one year from the school's supplemental grant award notification for those funds.

Again, schools could reserve a portion of their unspent HEERF I funds and/or HEERF II funds to award students for a later term (e.g., incoming freshmen in fall 2021, etc.). However, HEERF I funds under the CARES Act that remained unexpended as of December 27, 2020 and HEERF II funds authorized under the CRRSAA 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, leftover HEERF I grants or HEERF II grants to students paid under the CRRSAA allow a student to consent to the application of the grant funds to their student 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 as a condition of continued or future enrollment.

Per Q&A #8 in the Higher Education Emergency Relief Fund (HEERF) II Public and Private Nonprofit Institution (a)(1) Programs (CFDAs 84.425E and 84.425F) Frequently Asked Questions:

What are the requirements for making financial aid grants to students?

Unlike the CARES Act, the CRRSAA requires that institutions prioritize students with exceptional need, such as students who receive Pell Grants, in awarding financial aid grants to students. However, students do not need to be only Pell recipients or students who are eligible for Pell grants. In addition, the CRRSAA explicitly provides that financial aid grants to students may be provided to students exclusively enrolled in distance education.

Institutions may not (1) condition the receipt of financial aid grants to students on continued or future enrollment in the institution, (2) use the financial aid grants to satisfy a student’s outstanding account balance, unless it has obtained the student’s written (or electronic), affirmative consent, or (3) require such consent as a condition of receipt of or eligibility for the financial aid grant.

Institutions should carefully document how they prioritize students with exceptional need in distributing financial aid grants to students, as the Department intends to establish reporting requirements regarding the distribution of financial aid grants to students consistent with section 314(e) of CRRSAA.”

Be sure to review the Supplemental FAQs for additional guidance related to HEERF grants. See also AskRegs Q&A, What Is the Deadline for Distributing Higher Education Emergency Relief Funds?

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.