May 12, 2021
HEERF III Allocations and Guidance Released
On Tuesday, the U.S. Department of Education (“Department”) announced it is making available to postsecondary institutions the majority of the nearly $40 billion in education stabilization funds appropriated in the American Rescue Plan Act of 2021 (“ARP”). These funds are the third and most recent round of funding under the Higher Education Emergency Relief Fund (“HEERF III”). Although much of the guidance released yesterday is similar to the previous HEERF I and II programs, there are a few significant additions, including a new certification form for proprietary institutions and expanded student HEERF grant eligibility to all students, including undocumented students
The Department released various documents that are several hundred pages in length as part of the HEERF III announcement. Although CECU continues to review these documents, below is our initial analysis.
INSTITUTION ALLOCATIONS
The HEERF III allocates approximately $36 billion to public and private non-profit institutions; approximately $3 billion to HBCUs, tribal colleges and universities, Hispanic serving institutions and other MSIs; approximately $198 million to institutions of higher education with unmet need; and approximately $396 million to proprietary institutions.
CECU converted the Department’s HEERF III allocation tables to a sortable and searchable format for proprietary institutions and public and non-profit institutions. Each document downloads in Microsoft Excel.
PROPRIETARY INSTITUTIONS
Like HEERF II, HEERF III funds allocated to proprietary institutions can only be used to provide financial aid grants to students, which can include students exclusively enrolled in distance education. Emergency financial aid grants may be used by students for any component of their cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, health care (including mental health care), or child care.
For proprietary institutions that received HEERF II funds, HEERF III funds will be made available without requiring a new application. However, the Department requires that all proprietary institutions complete and submit the Required Proprietary Institution Certification Form to “assist with management and oversight” before the Department makes HEERF III funds available. Each institution must email a completed certification form to HEERFproprietary@ed.gov before the Department will make a supplemental award to the institution’s existing Proprietary Institution Grant Funds for Students Award under HEERF II in G5. Institutions must submit the certification form by August 11, 2021 or risk losing their HEERF III allocation.
Proprietary institutions should be aware the certification form mentioned above is a new requirement from the Biden-Harris Administration that is unique to proprietary institutions. The institution’s president or chief executive officer and all owners with at least 25 percent interest in the institution must sign the form.
CECU encourages institutions to discuss the certification form with counsel before submission to the Department. Institutions that wish to keep such ownership information confidential may want to consider attaching a cover letter to the form to indicate if they believe any information is a trade secret and is subject to protection from public release under the Freedom of Information Act.
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On Tuesday, the U.S. Department of Education (“Department”) announced it is making available to postsecondary institutions the majority of the nearly $40 billion in education stabilization funds appropriated in the American Rescue Plan Act of 2021 (“ARP”). These funds are the third and most recent round of funding under the Higher Education Emergency Relief Fund (“HEERF III”). Although much of the guidance released yesterday is similar to the previous HEERF I and II programs, there are a few significant additions, including a new certification form for proprietary institutions and expanded student HEERF grant eligibility to all students, including undocumented students
The Department released various documents that are several hundred pages in length as part of the HEERF III announcement. Although CECU continues to review these documents, below is our initial analysis.
INSTITUTION ALLOCATIONS
The HEERF III allocates approximately $36 billion to public and private non-profit institutions; approximately $3 billion to HBCUs, tribal colleges and universities, Hispanic serving institutions and other MSIs; approximately $198 million to institutions of higher education with unmet need; and approximately $396 million to proprietary institutions.
CECU converted the Department’s HEERF III allocation tables to a sortable and searchable format for proprietary institutions and public and non-profit institutions. Each document downloads in Microsoft Excel.
PROPRIETARY INSTITUTIONS
Like HEERF II, HEERF III funds allocated to proprietary institutions can only be used to provide financial aid grants to students, which can include students exclusively enrolled in distance education. Emergency financial aid grants may be used by students for any component of their cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, health care (including mental health care), or child care.
For proprietary institutions that received HEERF II funds, HEERF III funds will be made available without requiring a new application. However, the Department requires that all proprietary institutions complete and submit the Required Proprietary Institution Certification Form to “assist with management and oversight” before the Department makes HEERF III funds available. Each institution must email a completed certification form to HEERFproprietary@ed.gov before the Department will make a supplemental award to the institution’s existing Proprietary Institution Grant Funds for Students Award under HEERF II in G5. Institutions must submit the certification form by August 11, 2021 or risk losing their HEERF III allocation.
Proprietary institutions should be aware the certification form mentioned above is a new requirement from the Biden-Harris Administration that is unique to proprietary institutions. The institution’s president or chief executive officer and all owners with at least 25 percent interest in the institution must sign the form.
CECU encourages institutions to discuss the certification form with counsel before submission to the Department. Institutions that wish to keep such ownership information confidential may want to consider attaching a cover letter to the form to indicate if they believe any information is a trade secret and is subject to protection from public release under the Freedom of Information Act.
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March 2021
Please read the following government relations update carefully. The following update is not and should not be considered legal advice. CECU recommends that all institutions consult legal counsel about their options.
BACKGROUND
Section 2013 of the American Rescue Plan Act of 2021 proposes to change what counts toward the “90” portion of the 90/10 rule to include “federal education assistance funds” which are “federal funds that are disbursed or delivered to or on behalf of a student to be used to attend such institution.” The bill does not further define that term, nor does the bill include an explicit effective date.
Proponents of Section 2013 on Capitol Hill have told CECU that this provision must go through negotiated rulemaking, as prescribed in the Higher Education Act, prior to it becoming effective. Under this reasoning and given the current expected enactment timeline, this would mean that the provision would likely become effective, at the earliest, on July 1, 2023, if the Department published a final rule prior to November 1, 2022. However, it appears that the Department may not have the authority to delay implementation as the bill is currently written.
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Please read the following government relations update carefully. The following update is not and should not be considered legal advice. CECU recommends that all institutions consult legal counsel about their options.
BACKGROUND
Section 2013 of the American Rescue Plan Act of 2021 proposes to change what counts toward the “90” portion of the 90/10 rule to include “federal education assistance funds” which are “federal funds that are disbursed or delivered to or on behalf of a student to be used to attend such institution.” The bill does not further define that term, nor does the bill include an explicit effective date.
Proponents of Section 2013 on Capitol Hill have told CECU that this provision must go through negotiated rulemaking, as prescribed in the Higher Education Act, prior to it becoming effective. Under this reasoning and given the current expected enactment timeline, this would mean that the provision would likely become effective, at the earliest, on July 1, 2023, if the Department published a final rule prior to November 1, 2022. However, it appears that the Department may not have the authority to delay implementation as the bill is currently written.
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UPDATE ON THE HOUSE EDUCATION AND LABOR COMMITTEE MARKUP |
February 2021
Today, the House Education and Labor Committee began marking up legislation pursuant to the budget resolution at 3 PM ET. Approximately the first six hours of the markup was consumed debating numerous Republican amendments relating to reopening K-12 schools and the minimum wage. At approximately 9:30 PM, Rep. Virginia Foxx (R-NC) offered an amendment related to the 90/10 rule. After the Foxx amendment was debated, at approximately 9:50 PM, Rep. Fred Keller (R-PA) offered an amendment to increase funding for students in the sector. The summaries of each amendment are below.
FOXX AMENDMENT ON 90/10 (begins at roughly the 3-minute mark in the video)
The base bill adds all "federal education assistance funds" to the "90" portion of the 90/10 rule. Rep. Foxx offered an amendment that would remove GI Bill benefits from the 90/10 equation entirely, meaning that it would not count as revenue for the purposes of the 90/10 rule (remove GI Bill benefits from both the “90” and “10” portion of the rule).
Rep. Foxx began the debate by dismissing the argument that the 90/10 rule is an indicator of quality and described it as a “flawed accounting metric.” She also made the point that many public schools are heavily reliant on government funding and that democrats do not seem to take issue with how those institutions are funded. She described her amendment as a “compromise,” claiming that it would remove any purported perverse incentives that may exist for proprietary institutions to heavily recruit or “target” veterans.
Rep. Mark Takano (D-CA), Rep. Lucy McBath (D-GA), and Rep. Suzanne Bonamici (D-OR) all spoke against the amendment.
Rep. Foxx asked for a roll call vote on the amendment, which will be rolled until the end of the markup. CECU expects that the amendment will not be adopted and that the vote will be along party lines. The markup is likely to last into the early hours of the morning, so we will not have an official vote tally until tomorrow.
KELLER AMENDMENT INCREASING FUNDING FOR STUDENT IN THE SECTOR
(begins at roughly the 24-minute mark in the video)
The base bill provides roughly $40 billion for higher education. The bill provides that 1% of the total amount for students attending proprietary institutions or $395.85 million. Rep. Keller’s amendment would increase the amount provided to our students from 1% to 3%, which would bring total funding for our students to $1.19 billion.
Rep. Keller argued that this funding allocation is consistent with the allocation provided to the sector in the Coronavirus Response and Relief Supplemental Appropriations Act or HEERF II, which provided 3% of the total funding for students attending propriety institutions. He said that Democrats should stick to the deal that they made in that package and emphasized that the amendment would not provide for direct funding for proprietary institutions. Lastly, he said that the pandemic does not discriminate based on what school you attend and that democrats are playing politics with relief funding.
Rep. Jamaal Bowman (D-NY) and Rep. Lucy McBath (D-GA) spoke against the amendment.
Rep. Keller asked for a roll call vote on the amendment, which will be rolled until the end of the markup. CECU expects that the amendment will not be adopted and that the vote will be along party lines. The markup is likely to last into the early hours of the morning, so we will not have an official vote tally until tomorrow.
Sources and Corresponding Proprietary Student Funding
For questions or concerns related to CECU's government relations efforts, please contact Steve Gonzalez, Senior Vice President of Government Relations, at Steve.Gonzalez@career.org or John Huston, Director of Government Relations, at John.Huston@career.org.
Today, the House Education and Labor Committee began marking up legislation pursuant to the budget resolution at 3 PM ET. Approximately the first six hours of the markup was consumed debating numerous Republican amendments relating to reopening K-12 schools and the minimum wage. At approximately 9:30 PM, Rep. Virginia Foxx (R-NC) offered an amendment related to the 90/10 rule. After the Foxx amendment was debated, at approximately 9:50 PM, Rep. Fred Keller (R-PA) offered an amendment to increase funding for students in the sector. The summaries of each amendment are below.
FOXX AMENDMENT ON 90/10 (begins at roughly the 3-minute mark in the video)
The base bill adds all "federal education assistance funds" to the "90" portion of the 90/10 rule. Rep. Foxx offered an amendment that would remove GI Bill benefits from the 90/10 equation entirely, meaning that it would not count as revenue for the purposes of the 90/10 rule (remove GI Bill benefits from both the “90” and “10” portion of the rule).
Rep. Foxx began the debate by dismissing the argument that the 90/10 rule is an indicator of quality and described it as a “flawed accounting metric.” She also made the point that many public schools are heavily reliant on government funding and that democrats do not seem to take issue with how those institutions are funded. She described her amendment as a “compromise,” claiming that it would remove any purported perverse incentives that may exist for proprietary institutions to heavily recruit or “target” veterans.
Rep. Mark Takano (D-CA), Rep. Lucy McBath (D-GA), and Rep. Suzanne Bonamici (D-OR) all spoke against the amendment.
Rep. Foxx asked for a roll call vote on the amendment, which will be rolled until the end of the markup. CECU expects that the amendment will not be adopted and that the vote will be along party lines. The markup is likely to last into the early hours of the morning, so we will not have an official vote tally until tomorrow.
KELLER AMENDMENT INCREASING FUNDING FOR STUDENT IN THE SECTOR
(begins at roughly the 24-minute mark in the video)
The base bill provides roughly $40 billion for higher education. The bill provides that 1% of the total amount for students attending proprietary institutions or $395.85 million. Rep. Keller’s amendment would increase the amount provided to our students from 1% to 3%, which would bring total funding for our students to $1.19 billion.
Rep. Keller argued that this funding allocation is consistent with the allocation provided to the sector in the Coronavirus Response and Relief Supplemental Appropriations Act or HEERF II, which provided 3% of the total funding for students attending propriety institutions. He said that Democrats should stick to the deal that they made in that package and emphasized that the amendment would not provide for direct funding for proprietary institutions. Lastly, he said that the pandemic does not discriminate based on what school you attend and that democrats are playing politics with relief funding.
Rep. Jamaal Bowman (D-NY) and Rep. Lucy McBath (D-GA) spoke against the amendment.
Rep. Keller asked for a roll call vote on the amendment, which will be rolled until the end of the markup. CECU expects that the amendment will not be adopted and that the vote will be along party lines. The markup is likely to last into the early hours of the morning, so we will not have an official vote tally until tomorrow.
Sources and Corresponding Proprietary Student Funding
- HEERF II, as enacted: $680.91 million, or 3 percent
- HEERF III, Committee Mark: $395.85 million, or 1 percent
- HEERF III, with proposed amendment: $1.19 billion, or 3 percent
For questions or concerns related to CECU's government relations efforts, please contact Steve Gonzalez, Senior Vice President of Government Relations, at Steve.Gonzalez@career.org or John Huston, Director of Government Relations, at John.Huston@career.org.