Explaining the Federal COVID-19 Relief and Year-End Funding Package
The federal government passed a substantial year-end funding package in late December 2020. One part of that package contains $900 billion…
The federal government passed a substantial year-end funding package in late December 2020. One part of that package contains $900 billion in stimulus relief under the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, 2021, the first COVID-19 relief package passed since the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. The package also included the Consolidated Appropriations Act, 2021, a $1.4 trillion omnibus spending bill that will fund the government through the rest of FY21 (which ends on September 30, 2021) and contained several higher education provisions that are relevant to our work.
The Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, 2021
Utilizing the structure created by the CARES Act, the CRRSA Act provides nearly $82 billion for a slightly modified Education Stabilization Fund that includes three main funding streams: the Elementary and Secondary School Emergency Relief Fund, the Higher Education Emergency Relief Fund and the Governor’s Emergency Education Relief Fund. As in CARES, 1% of these funds will be allocated to the Education Stabilization Fund for the Outlying Areas and the Bureau of Indian Education. The remainder of the funds will flow through the Elementary and Secondary School Emergency Relief Fund, Higher Education Emergency Relief Fund, and the Governor’s Emergency Education Relief Fund and have already been made available to eligible recipients as of this writing. Any entity that receives funds shall, to the greatest extent practicable, continue to pay its employees and contracts during the pandemic, and states must provide an assurance that they will commit to K-12 and higher education spending levels that are at least the same proportion of overall spending by the state during FY2018-2020.
$54.3 billion in federal funding
$22.7 billion in federal funding
$4.05 billion in federal funding
Other legislative provisions passed within the Act include simplifying the Free Application for Federal Student Aid (FAFSA), enacting federal Pell Grant restoration for those who were defrauded by predatory for-profit colleges, and repealing the ban on Pell eligibility among students who are incarcerated.
The bill restructures the current federal financial aid formula in a few different areas. It eliminates the term “expected family contribution (EFC)”, replacing it with the “Student Aid Index (SAI),” and makes other changes to the process for students and families. The SAI is similar in structure but would reduce the total questions on the FAFSA to 36 from 108; lower the filing burden for individuals who have received means-tested benefits; and specifically mandate most of the questions by law; specifically eliminate Question 23 pertaining to prior drug convictions, eliminating that barrier to aid; institute more robust income protection allowances for applicants; and set federal poverty thresholds for receiving a Pell Grant and a maximum Pell Grant in ways that are likely to increase the number of students who will receive the maximum Pell Grant.
The bill also lifted the ban on students who are incarcerated receiving a Pell Grant. Students enrolled in programs offered by public and nonprofit private institutions who meet certain quality and transparency standards can receive Pell Grants. Those standards include being approved by the appropriate state carceral agency or the Federal Bureau of Prisons; ensuring that the credits earned by students who are incarcerated can be transferred to at least one institution; ensuring that the program must satisfy applicable requirements for professional licensure or certification; and ensuring that institutions that participate have not been subject to adverse action from a state agency or their accreditor in the previous five years.
Finally, the bill also did the following: eliminated the 150% cap on subsidized undergraduate student loans; discharged capital financing loans owed to the federal government by HBCUs; and restored Pell Grant eligibility for defrauded or misled students who successfully pursue a borrower defense to repayment claim.
The simplification of the FAFSA and changes to the federal financial aid formula are scheduled to take effect in 2023, while other provisions, including the lifting of the Pell ban, could take effect as soon as this calendar year.
This part of the bill is best understood as the annual process by which the federal government appropriates funds to ensure its continuous operation. In this part of the bill, relevant provisions include the overall funding of the U.S Department of Education at $73.5 billion, a $785 million increase from FY2020. The bill includes small funding increases for Title I grants, Individuals with Disabilities Education, Title II teacher professional development state grants, Title IV Student Support and Academic Enrichment Grants, Early Childhood Education, Career and Technical Education State Grants, among other educational programs, and a $150 increase to the maximum Pell Grant award.