Colleges’ Compliance With and Use of Federal CARES Act Emergency Grants: A Look at 100 Colleges

In the face of a global health and economic crisis, Congress quickly provided colleges with resources to support students facing unexpected costs stemming from sudden campus closures. This analysis finds that many colleges are not compliant with requirements to post information about how resources are being spent, and highlights variation in how funds are being spent at colleges where information is available.

The onset of the COVID-19 pandemic wreaked havoc on college students and the colleges that enrolled them. On March 27, Congress provided emergency grants through the CARES Act for postsecondary education students and institutions across the country. These emergency grants known as the Higher Education Emergency Relief Fund (HEERF) provided almost $14 billion in direct support to colleges, a little less than half of which ($6.28 billion) was specifically allocated for emergency grants to help students cover unexpected expenses related to any disruptions to their education due to the campus closures triggered by COVID-19. To receive the student aid funding, colleges were first required to submit an application and receive approval from the U.S. Department of Education (Department).

According to the Department, the vast majority of funds earmarked for emergency aid were allocated to colleges in April. With very few restrictions imposed by Congress – with the exception of the Department imposing widely criticized eligibility restrictions that are being challenged legally – institutions have had a great deal of flexibility with how they allocate HEERF grants. After 30 days of receiving approval for funds, and every 45 days after that, institutions must file reports with the federal government documenting how they are distributing funds to their students, including the amount of aid granted to each student and any guidelines given to students on how to apply for funding. Colleges are also required to post this information on their websites.

To better understand how institutions have been allocating funds and providing required information, we randomly selected 100 schools (25 each of public 2-year, public 4-year, nonprofit, for-profit) slated to receive CARES Act funding to analyze trends across institutions. Through visits to colleges’ websites, we found significant variation in the amount and usability of the information posted, as well as differences in how colleges were allocating resources.

Is there publicly available information?

Most of the surveyed colleges (75) had at least some information about CARES Act emergency aid available on their website, as required. However, 23 of the 100 colleges – 16 of which were for-profit colleges – did not have any information publicly available online. Two colleges, both nonprofits, declined to receive CARES funds.

What kind of information is available?

For colleges with information about CARES emergency aid, the type of information provided varied significantly.

• Among colleges where public-facing information was available, a little more than half (42 of 75) described the process students must follow to receive it and one-third (26 of 75) proactively offered guidance to students seeking aid. Public 4-year colleges were most likely to do both.
• The vast majority of colleges (67 of 75) described student eligibility criteria, which typically reflected eligibility restrictions imposed by the Department’s guidance.
• More than half of public colleges described how individual students’ award amounts were determined, compared to less than half of private colleges.

How are colleges allocating emergency grants?

Among colleges with information available, most described an application process in which the college asked students experiencing hardship or unexpected costs to complete an application. Many others chose to use an automatic process through which the colleges automatically determined which students were eligible for awards. A small number of schools allocated dollars both ways.

Most of the colleges allocated different award amounts to students based on financial criteria. For schools that used the students’ EFC to determine their grant awards, students with lower EFC were given more aid. Similarly, schools that assessed students’ COVID-induced financial hardships through their CARES aid applications awarded more dollars to students who expressed higher needs. A minority of the schools in our sample disbursed the same amount of aid to each eligible student.

Recommendations:

Under the weight of the magnitude of the pandemic and managing additional large sums of federal funding, institutions found themselves in unfamiliar territory figuring out how to process and distribute emergency aid efficiently and effectively, and the Department’s evolving guidance on the CARES Act emergency aid resulted in unnecessary confusion and delays. While some confusion remains understandable, there are lessons to glean for both CARES Act funding as well as any future funding provided to support students during the COVID-19 pandemic.

Based on our analysis, and to ensure students most in need of resources can access them, we recommend that colleges:

• Comply with requirements that information about the CARES Act emergency aid be posted publicly, including any instructions or guidance given to students. Making the information readily available to students and the public, including any family and friends supporting students, will support students’ access to aid.
• Colleges should quickly get the money out to students who need it most. Providing equal amounts of aid to every enrolled and eligible student, or creating burdensome verification processes, is a disservice to students hardest hit by the crisis.
• Use the CARES Act communications to ensure students know about other resources, beyond limited CARES Act federal funding, that could support students with unexpected costs or needs during the crisis and beyond. These resources could include, but are not limited to, institutional financial aid, campus food pantries and community food banks, and student-focused campus organizations with resources to offer.

We recommend that the U.S. Department of Education:

• Enforce compliance with reporting requirements. As part of colleges routine reports on CARES spending, the Department should ask colleges for the web page where information is posted and monitor them to ensure the required details are present.
• Rescind its interim final rule that restricts millions of students from receiving CARES Act emergency grants. The restrictions imposed by the Department are harmful and unnecessary.
• For any future funds made available, issue any necessary guidance and reporting requirements prior to funds being distributed. The Department’s evolving guidance on the CARES Act emergency aid resulted in unnecessary confusion and delays in a time of crisis.

For any future resources allocated directly to colleges through the Department, we recommend that Congress:

• Allocate relief funds through a formula based on total student enrollment rather than continuing to allocate funds through the CARES Act formula, which is based on full-time equivalent (FTE) enrollment. Basing allocation on total enrollment will ensure that community colleges receive their appropriate share of funding; using FTE disproportionately favors four-year institutions.
• Explicitly specify that it is solely up to institutions to decide which students receive emergency aid funds and explicitly prohibit the Education Department from placing further restrictions on which students can receive funds.