On December 27, 2020, President Donald Trump signed the Coronavirus Response and Relief Supplemental Appropriations Act (“Appropriations Act”), within which the Department of Education (ED) provided an additional $21.2 billion to institutions of higher education (IHEs) to serve students and ensure education continues through the COVID-19 pandemic.
The Higher Education Emergency Relief Fund II, or HEERF II, presents similar requirements to the first-round Higher Education Emergency Relief Fund (HEERF I), permitting IHEs to use their awards for financial aid grants to students, student support activities and certain institutional costs. As with HEERF I, IHEs have one calendar year from the award date to expend the funds. They must also provide the same amount in financial aid grants to students under HEERF II that was disbursed or required under HEERF I. Grants can be used for the student’s cost of attendance or for emergency costs caused by the coronavirus, including tuition, food, housing, healthcare and child care. The money may be used to cover costs incurred on or after December 27, 2020.
Differing from its predecessor, HEERF II requires IHEs to prioritize students with exceptional need (e.g., those who receive Pell Grants) and authorize grants to students who are exclusively enrolled in distance education. Additionally, the institutional piece of the funds under HEERF II may be used for expenses associated with the COVID-19 pandemic but can now include lost revenue. The ED has not yet provided guidance or examples of the lost revenue concept, so expect additional information to be forthcoming.
A fact sheet comparing HEERF I and HEERF II, issued by the ED, can be found here.
The Appropriations Act also made changes to the Employee Retention Credit (ERC) by removing Paycheck Protection Program disqualifications, extending the credit through June 30, 2021, and changing eligibility criteria for 2021, all modifications that could offer significant opportunity for IHEs. More information related to the ERC can be found here.
If your organization needs help reviewing and discussing treatment of the HEERF I, HEERF II or ERC, or navigating the Appropriations Act, please reach out to a member of Schneider Downs Higher Education Industry Group.
