Congress Gave Colleges A $14 Billion Lifeline. Here's Where It's Going

May 18, 2020
Originally published on May 18, 2020 12:15 pm

College dorms are closed. Athletic events are canceled. Classes have moved online. Like so many sectors of the U.S. economy, higher education is taking a hit from the coronavirus pandemic. In March, Congress set aside more than $14 billion to help colleges and universities weather the outbreak. Here's where most of that money has gone and why many colleges are holding out for more:

The coronavirus rescue package, known as the CARES Act, created three buckets of funding for higher education: $12.5 billion to help with coronavirus-related expenses for schools that participate in federal financial aid; $1 billion for minority-serving institutions, including historically black colleges and universities; and a smaller pot of nearly $350 million for colleges that didn't get much from those first two buckets and still had "significant unmet needs."

The largest bucket — that $12.5 billion — was designed to be the main vehicle for getting funds directly to colleges and students. The U.S. Department of Education allocated this money to colleges using a formula that favors institutions serving full-time, low-income students. According to the department, it has distributed more than $10 billion to colleges so far. The CARES Act says schools have to give at least half of that money — more than $6 billion — directly to students whose lives have been disrupted by the pandemic and are having trouble making ends meet.

Schools are required to publicly report what they've done with the money. But there isn't much guidance on what these emergency grants for students should look like, and it's up to schools to figure out how to distribute the funds.

"The fact is, to give somebody emergency aid is actually pretty difficult," Sara Goldrick-Rab, a professor of higher education and sociology at Temple University, told Inside Higher Ed. That may be why some universities have yet to begin the process of handing the money out. Eastern Michigan University, which was allotted nearly $14 million in federal aid, said that as of mid-May it still hadn't distributed any money to students because it was working on plans to do so. The law allows institutions one year to give out the money, and EMU plans to have a program in place by late summer or early fall, according to a statement.

And there's another wrinkle: Three weeks after the CARES Act was signed into law, the Education Department issued guidance that said only students who are eligible for federal student aid programs can qualify for these emergency grants. That means, according to the department, international students and undocumented students — including those who are protected under the Deferred Action for Childhood Arrivals program — are not eligible for any emergency aid.

In a statement to NPR, the department said this was how Congress wrote the law: "There is no persuasive legal support for the proposition that Congress intended the CARES Act to create an entitlement for DACA recipients and others who are otherwise ineligible for Federal public benefits."

Democratic lawmakers have expressed concern about the guidance and the impact it will have on immigrant students. And at least one college system says the new guidance is illegal: Earlier this month, California Community Colleges filed a federal lawsuit against Education Secretary Betsy DeVos, calling the aid restrictions "arbitrary" and "unlawful."

From the beginning, higher ed leaders have said the $14 billion lawmakers set aside in the CARES Act wouldn't be enough to save the country's colleges and universities. The American Council on Education, a higher education lobbying group, has called the money "woefully inadequate" and said schools would need about $46.6 billion more.

On Friday, House lawmakers passed a Democratic proposal that would put about $37 billion more toward higher education. Most of that money would go to governors to distribute to public colleges, and about $10 billion would go to schools with pandemic-related needs. The money is part of the $3 trillion HEROES Act, which Senate Republicans have already said they won't support.

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How are colleges spending their relief money from the federal government? Congress set aside $14 billion for colleges, universities and their students, and it matters a lot how they use that money. Colleges not only shut down this spring but face uncertainty about the fall semester. The president of Brown University told us recently that some universities could go out of business if they fail to reopen this fall. NPR's Elissa Nadworny has been following the money. Good morning.


INSKEEP: What are education leaders saying about that $14 billion that they received?

NADWORNY: So from the beginning, they said $14 billion was not enough. The American Council on Education, a higher ed lobbying group, called the money woefully inadequate. We're seeing colleges with massive budget shortfalls. There's hiring freezes and furloughs and cuts to programs.

INSKEEP: Although there is the $14 billion. Where's the money going?

NADWORNY: So the majority of that money was in a bucket of about $12.5 billion. It went directly to colleges. The law requires that each school give half that money directly to students whose lives have been disrupted by the pandemic. They're facing financial challenges, struggling to make ends meet.

INSKEEP: Oh, that's interesting. So the universities don't necessarily get a lot for teacher salaries or something like that; the students get a lot or what seems like a lot. Are they benefiting?

NADWORNY: So it really depends on what school you go to whether or not you've seen that money yet. So it's been up to the schools to distribute the money, which means they make an application; they decide who gets it. And there's a lot of need right now on college campuses, and there's only so much money in the pot (ph).

And then there's this larger question about eligibility. So several weeks ago, the Ed Department said only students who were eligible for federal student aid were allowed to get the coronavirus relief. That essentially excludes international students and undocumented students, including those protected under DACA. The community college system in California has actually sued Education Secretary Betsy DeVos over those restrictions, calling them arbitrary and unlawful. But the Ed Department told NPR in a statement that if Congress wanted to include non-U.S. citizens, they would have explicitly said so.

INSKEEP: I'm glad you mentioned Education Secretary DeVos because she's been a subject of some of your other reporting on a portion of the CARES Act, this relief bill that is used - been used to boost small private colleges. What's the news there?

NADWORNY: That's right. So there was a bucket of money, a smaller bucket, about $350 million for the secretary to top off schools that hadn't gotten much relief from other parts of the bill. And we now know that money went mostly to small private schools, many of them religious. So one example is Winebrenner Theological Seminary in Ohio. They have about 150 students, certificates and graduate degrees, and they're in the process of receiving about half a million dollars. Brent Sleasman, the president there, told me it'll be about a third of their budget for next year, and they plan to use it to offset tuition.

BRENT SLEASMAN: We are a smaller school, and we have a very focused mission. It's to equip leaders for service in God's kingdom, which is not a shared mission. However, there is great possibility in the number of students we could reach through the creativity that these funds allow.

NADWORNY: You know, this comes at a time when public colleges, especially community colleges, are really hurting. They've served tens of thousands of students, and that's in comparison to these smaller some schools that serve, you know, in some cases, 100 students.

INSKEEP: OK. So questions about the distribution of the money and the amount as well, and we'll surely hear more on this subject Elissa, thanks so much.

NADWORNY: Thanks, Steve.

INSKEEP: That's NPR's Elissa Nadworny. She covers higher education.