CARES Act Higher Education Provisions

CARES Act Higher Education Provisions

Updated July 8, 2020
CARES Act Higher Education Provisions
President Donald J. Trump declared a U.S. national
Federal Student Loan Modifications
emergency on March 13, 2020, in response to the COVID-
Loans to support students’ postsecondary educational
19 pandemic. The Coronavirus Aid, Relief, and Economic
pursuits are currently available under the William D. Ford
Security Act (CARES Act; P.L. 116-136) was enacted on
Federal Direct Loan (Direct Loan) program. Loans were
March 27, 2020, to address income, health, and economic
previously available through the Federal Family Education
security in response to the national emergency. This In
Loan (FFEL) program and the Federal Perkins Loan
Focus provides brief descriptions of several higher
program, and some of those loans remain outstanding.
education provisions included in the law.
Adjustment of Subsidized Loan Usage Limits. New
Student Aid Provisions
borrowers on or after July 1, 2013, may only borrow Direct
To provide postsecondary education student relief, several
Subsidized Loans for a period not to exceed 150% of the
provisions in the CARES Act temporarily modify the
published length of the academic program in which they are
requirements of existing student aid programs, such as
enrolled. If a borrower remains enrolled beyond this limit,
those authorized under Title IV of the Higher Education
he or she will lose the interest subsidy on such loans. The
Act (HEA).
CARES Act permits any semester (or equivalent) that the
student does not complete due to a qualifying emergency to
Modifications to Campus-Based Financial Aid
be excluded from the 150% limits.
Programs
The Federal Supplemental Educational and Opportunity
Temporary Relief for Student Loan Borrowers. For all
Grant (FSEOG) program and the Federal Work-Study
Direct Loan program loans and for FFEL program loans
(FWS) program are two campus -based financial aid
held by the Department of Education (ED), the CARES Act
programs authorized under the HEA. Under the programs,
(1) suspends all payments due and counts such suspended
federal funds are awarded to institutions of higher education
payments towards specified loan forgiveness programs
(IHEs) that administer the programs.
(e.g., Public Service Loan Forgiveness) and loan
rehabilitation, (2) halts interest accrual, and (3) suspends
Use of FSEOG for Emergency Aid. Under the FSEOG
involuntary collections on defaulted loans, through
program, IHEs provide grants to undergraduate students
September 30, 2020.
who demonstrate exceptional financial need. The CARES
Act authorizes expansion of the FSEOG program to allow
Institutional Refunds and Student Loan Flexibility. If a
IHEs to provide emergency grants to undergraduate and
student withdraws from an IHE before the end of a period
graduate students for unexpected expenses and unmet
of enrollment for which HEA Title IV federal student aid
financial need as a result of a qualifying emergency.
funds were disbursed, the IHE and/or the student may be
required to return grants and student loans received for that
FWS During a Qualifying Emergency. Under the FWS
period to ED. The CARES Act requires the Secretary of
program, IHEs provide part-time employment opportunities
Education to waive the requirement that IHEs and students
for eligible undergraduate, graduate, and professional
do so in the case of students who withdraw from the IHE as
students. The CARES Act permits IHEs to continue paying
a result of a qualifying emergency.
students who participated in the FWS program but were
unable to fulfill their work-study obligation due to a
Modifications to Teacher Loan Forgiveness
qualifying emergency. IHEs are permitted to make
Requirements. The HEA authorizes loan forgiveness of up
payments as a one-time grant or as multiple payments.
to $17,500 for borrowers who teach for five consecutive
complete years in eligible low-income schools. The CARES
Waivers of Campus-Based Aid Matching Requirements.
Act permits the Secretary to waive requirements that
Under FSEOG and FWS, IHEs provide institutional funds
qualifying teaching service be completed in consecutive
to match federal funds received. The CARES Act requires
years under two conditions: (1) if a recipient’s teaching
that the Secretary of Education waive the matching
service is temporarily interrupted due to a qualifying
requirement under the FSEOG and FWS programs for
emergency, and (2) following such interruption, if the
funds made available for award years 2019-2020 and 2020-
borrower resumes teaching and completes five years of
2021, except that private for-profit organizations that
teaching service, including teaching performed before,
employ FWS students continue to be required to provide a
during, and after the qualifying emergency.
match in funds. IHEs are also permitted to transfer up to
100% of their FWS allocation to the FSEOG program
Continuing Education at Affected Foreign Institutions.
during a period of a qualifying emergency.
Educational programs offered via distance education (e.g.,
online education) by foreign IHEs, and those offered in
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CARES Act Higher Education Provisions
whole or in part in the United States by foreign IHEs, are
Act (ESEA), as amended, that, among other things,
ineligible to participate in the Direct Loan program. The
provides funds to IHEs. The CARES Act authorizes $100
CARES Act authorizes ED to permit both types of
million for Safe Schools and Citizenship Education to
programs offered by foreign IHEs to be eligible for Direct
prevent, prepare for, and respond to coronavirus, including
Loans for the duration of a qualifying emergency.
disinfecting affected schools, and assisting in counseling
and distance learning.
Exclusion from Federal Pel Grant Duration Limit
Pell Grants provide grant aid to financially needy
Historical y Black Col eges and Universities
undergraduate students. Students are generally limited to
(HBCU) Capital Financing Program Modifications
the equivalent of no more than 12 full-time semesters of
The HBCU Capital Financing Program, authorized under
Pell Grant awards. The CARES Act permits any semester
the HEA, assists HBCUs in obtaining low-cost capital
(or equivalent) that the student does not complete due to a
financing for campus maintenance and construction
qualifying emergency to be excluded from such limit.
projects. The CARES Act authorizes the Secretary of
Education to grant a deferment during a qualifying
Service Obligations for TEACH Grant Program
emergency to an institution that has a loan under the
The Teacher Education Assistance for College and Higher
program. During the period of the deferment, the Secretary
Education (TEACH) Grant program provides recipients
is required to pay the required principal and interest due. At
with grants to pursue coursework that leads to a
the end of the deferment, the IHE is required to repay the
certification in teaching in exchange for a four-year
Secretary for payments made on its behalf.
teaching service obligation in a high-need field and low-
income school. The CARES Act permits the Secretary of
Direct Appropriations to Certain IHEs
Education to excuse TEACH Grant recipients from
Some colleges receive annual direct appropriations for
fulfilling any part of their teaching service obligation that
ongoing support. The CARES Act provides $78,000 to the
they are unable to complete during a qualifying emergency.
Institute of American Indian and Alaska Native Culture and
Additionally, any teaching service that is part-time or
Arts Development to prevent, prepare for, and respond to
temporarily interrupted due to a qualifying emergency shall
coronavirus. In addition, the CARES Act appropriates $7
count toward fulfilling the service obligation.
million to Gallaudet University and $13 million to Howard
University to prevent, prepare for, and respond to
Modifications to Satisfactory Academic Progress
coronavirus, and to enable grants to students for expenses
To be eligible for federal student aid as authorized under
directly related to coronavirus and the disruption of
Title IV of the Higher Education Act (HEA), a student must
university operations. The funds are available through
make satisfactory academic progress as measured through
September 30, 2021.
qualitative and quantitative standards. The CARES Act
excludes attempted credits that were not completed due to a
Waiver Authority for Minority Serving Institutions
qualifying emergency from the quantitative component.
HEA Title III-A, Title III-B, Title V, and Title VII-A-4
authorize what are collectively referred to as the Minority-
Institutional Aid Provisions
Serving Institutions (MSIs) programs to equalize
Several CARES Act provisions provide support to IHEs to
educational opportunity. The CARES Act authorizes the
maintain operations and continue supporting students.
Secretary of Education to waive several of the eligibility
and reporting requirements that are generally applicable to
Education Stabilization Fund
IHEs participating in the MSI programs.
The CARES Act establishes a $30.750 billion Education
Stabilization Fund that is composed of a Governor’s
Modifications for Certain HEA Grant Programs
Emergency Relief Fund, an Elementary and Secondary
The CARES Act authorizes the Secretary of Education,
School Emergency Relief Fund, and a Higher Education
upon request by an affected institutional grantee, to modify
Emergency Relief Fund. The Governor’s Emergency Relief
the required and allowable uses of funds under the MSI
Fund provides $3.0 billion to governors to provide
programs, TRIO programs, and Gaining Early Awareness
emergency funds to local educational agencies (LEAs),
and Readiness for Undergraduate Programs (GEAR UP).
IHEs serving students within the state, and other education
The CARES Act further authorizes the Secretary to modify
related entities within the state for a broad array of purposes
the financial matching requirement for the MSI programs
including those under various federal education laws, social
and any HEA competitive grant program as a result of a
and emotional support, and the protection of education-
qualifying emergency at the request of the grant recipient.
related jobs. The Higher Education Emergency Relief Fund
Such modification may be in effect through September 30
provides for the distribution of approximately $14 billion to
of the fiscal year following the end of the qualifying
IHEs to address needs directly related to coronavirus,
emergency.
including, but not limited to, transitioning courses to
distance education and grant aid to students for their
Cassandria Dortch, Coordinator, Specialist in Education
educational costs such as food, housing, course materials,
Policy
health care, and child care.
Joselynn H. Fountain, Analyst in Education Policy
Safe Schools and Citizenship Education
Alexandra Hegji, Analyst in Social Policy
Safe Schools and Citizenship Education is a program
Rita R. Zota, Analyst in Education Policy
authorized under the Elementary and Secondary Education
IF11497
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CARES Act Higher Education Provisions

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https://crsreports.congress.gov | IF11497 · VERSION 3 · UPDATED