Third Federal Stimulus Package: Education Provisions

AACTE Responds to COVID-19

On March 25, 2020, the U.S. Senate passed the bipartisan third stimulus bill known as the Coronavirus Aid, Relief, and Economic Security Act, aka the CARES Act. The U.S. House of Representatives will take up the measure on March 27, sending it to the president for his signature.  At this point in time, conversations are beginning on whether or not a fourth stimulus package is necessary.

Read the full CARES Act.

Read the Title-by Title Summary

The CARES Act includes the following  in regard to education:


Education Stabilization Fund:  This includes flexible funding that will get out the door quickly and go directly to states, local school districts, and institutions of higher education to help schools, students, teachers, and families with immediate needs related to the coronavirus, including:

  • Elementary and Secondary Education: $13.5 billion in formula funding directly to states, to help schools respond to coronavirus and related school closures, meet the immediate needs of students and teachers, improve the use of education technology, support distance education, and make up for lost learning time
  • Higher Education: This includes $14.25 billion in funding to institutions of higher education to directly support students facing urgent needs related to the coronavirus, and to support institutions as they cope with the immediate effects of the coronavirus and school closures. The funding provides targeted formula funding to institutions of higher education, as well as funding for minority serving institution sand HBCUs.
  • State Flexibility Funding: $3billion in flexible formula funding allocated by states based on the needs of their elementary and secondary schools and their institutions of higher education

Project SERV: $100 million in targeted funding for elementary and secondary schools and institutions of higher education to respond to the immediate needs of coronavirus and the effect on students

Howard University: $13 million in direct support for this federally-chartered HBCU, including support for affected students

Gallaudet University: $7 million in direct support for this federally-chartered university, including support for affected students

Student Aid Administration: $40 million for administrative expenses to support changes (both those carried in the bill and those made administratively) to student aid programsto help students and borrowers

Office of Inspector General: $7million for audit and oversight of activities funded in this measure

COVID-19 Pandemic Education Relief Act of 2020

The following is an overview of this section in the CARES Act; as always, please be reminded that the devil is in the details. As necessary, this blog will be updated or other blogs drafted as additional details and/or interpretations emerge. (This was written within approximately 12 hours of the measure passing the Senate, and analysis is ongoing.)

Often the words “qualifying emergency” are included in the overview—this term is specifically defined in this portion of the bill. When the term “Secretary” is used, it means the Secretary of Education.

Support for Teachers

 Critical for the profession, the CARES Act grants the Secretary the ability during a qualifying emergency to modify the categories of extenuating circumstances under which a recipient of a TEACH grant who is unable to fulfill all or part of the recipient’s service obligation may be excused from fulfilling that portion of the service obligation. In addition it requires the Secretary to consider teacher service that is interrupted due to a qualifying emergency to be full-time service and to fulfill the obligations.

In addition, the measure modifies the Teacher Loan Forgiveness program to permit that during a qualifying emergency the interrupted service is considered consecutive as long as the individual resumes teaching and completes the 5 year requirement. (This program requires 5 consecutive years of service to be eligible for loan forgiveness.)

Campus-Based Aid Programs

 The measure provides waivers around matching funds for campus-based aid programs, as well as the ability to transfer funds from Federal Work-Study (FWS) to Federal Supplemental Education Opportunity Grants (FSEOG). In addition, FSEOG grants can be used to offer emergency financial aid grants to assist undergraduate and graduate students for unexpected expenses and unmet financial need as the result of a qualifying emergency. Students in FWS programs who cannot fulfill their obligation due to a qualifying emergency can receive payments.

Federal Financial Aid

 The bill also adjusts the federal subsidized loan usage limits, as well as excluding a student’s Pell Grant duration limit any semester (or equivalent) that the student does not complete due to a qualifying emergency.

A waiver is granted to institutions of higher education on the amount of grant or loan assistance to be returned if a student withdraws from an institution as a result of a qualifying emergency. A report is required on such waivers. The bill also requires that the Secretary waive the amounts the students are required to return if they withdraw from an institution due to a qualifying emergency, as well as cancellation of loan obligation. Leave of absences for students are also covered in this section of the measure.

The bill addresses the satisfactory academic progress required for federal student financial aid—the institution may exclude attempted credits that were not completed due to a qualifying emergency.

For student loan borrowers, the CARES Act suspends all payments due for loans made under part D and part B of Title IV of HEA that are held by the U.S. Department of Education through September 30, 2020. This suspension will not affect the ability to participate in loan forgiveness programs or loan rehabilitation programs. In addition, there is a suspension of involuntary collections through September 30, 2020.

For continuing education at affected foreign institutions the bill offers the option of distance education and specifies the eligibility requirements.

National Emergency Education Waivers

 The CARES Act grants national emergency education waivers in portions of the Elementary and Secondary Act (ESEA), (such as for assessments, accountability, and related reporting requirements) and other waivers can be requested with specific requirements. The Secretary may not waive any statutory or regulatory requirements under civil rights laws.

This section includes very specific reporting requirements. The Secretary is also required to report to key committees in the House and Senate on potential waivers that might be necessary for IDEA, the Rehabilitation Act, ESEA, and the Perkins Career & Technical Education Act.

Minority-Serving Institutions

 Historically Black Colleges and Universities can receive loan deferment if the institution has received a loan under part D of Title III of the Higher Education Act.

The CARES Act also waives certain requirements for institutions of higher education receiving assistance under Title III, Title V, and subpart 4 of part A of Title VII, which impacts minority-serving institutions.

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Deborah Koolbeck

Senior Director of Government Relations, AACTE