Last week, President Joe Biden signed into law the $1.9 trillion American Rescue Plan (ARP) Act of 2021. Approved by Congress on Tuesday, this most recent coronavirus relief package provides an additional $40 billion to the Higher Education Emergency Relief Fund (HEERF) established in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Of the nearly $40 billion in funds committed to higher education, the new package allocates 91% to public and private nonprofit institutions in the form of direct grants. It directs 7.5% of the funds to programs for minority serving institutions, 1% to for-profit schools, and reserves the remaining 0.5% for the Fund for the Improvement of Postsecondary Education. The ARP allocates the direct grants utilizing the same formula used under the CRRSAA. This formula prioritizes institutions with higher percentages of Pell Grant recipients who were not enrolled in distance learning before the pandemic relative to all other eligible institutions. Like the first two relief bills, the ARP requires institutions to spend at least half of their allocation on emergency financial aid grants for students.
An additional provision in the ARP requires institutions receiving aid from the HEERF to use a portion to conduct direct outreach to financial aid applicants about the opportunity to receive a professional judgement adjustment due to the recent unemployment. A guidance from earlier this year reminded institutions of their ability to use documentation of unemployment to reduce or adjust to zero an unemployed individual’s income earned from work and adjusted gross income in the federal methodology formula.
The aid for higher education surpasses the $14 billion institutions received in the CARES Act last March and the $22.7 billion received in the Consolidated Appropriations Act.
Sources:
NASFAA: American Council on Education Estimates New HEERF III Allocations
NASFAA: Provision in Latest Covid Package Requires Institutions to Conduct Outreach Regarding Use of Professional Judgment
Lexology: What Colleges and Universities Can Expect from the American Rescue Plan
University Business: Biden signs 1.9 trillion American Rescue Plan into law