The Heroes Act: Education-Related Provisions

The Heroes Act: Education-Related Provisions

The Heroes Act: Education-Related Provisions
August 26, 2020
In response to the rapidly evolving Coronavirus Disease 2019 (COVID-19) pandemic, Congress
and the Administration have taken several actions to support the continued education of
Cassandria Dortch,
elementary, secondary, and higher education students and to protect student loan borrowers and
Coordinator
educational institutions from related economic hardship. The Secretary of Education has issued
Specialist in Education
several informational and guidance documents to help education providers respond to COVID-
Policy
19-related disruptions to services and administration. The Coronavirus Aid, Relief, and

Economic Security (CARES) Act (P.L. 116-136, as amended), enacted on March 27, 2020,
Rebecca R. Skinner
supported efforts to address the COVID-19 emergency across the federal government. The
Specialist in Education
CARES Act education provisions authorized the Secretary of Education to grant flexibilities and
Policy
waivers of various statutory and regulatory provisions; provide relief to postsecondary education

students and student loan borrowers; and provide financial support to states, local educational
agencies (LEAs), and institutions of higher education (IHEs).
Kyle D. Shohfi
Analyst in Education Policy
On May 15, 2020, the House passed the Heroes Act (H.R. 6800) to further the federal response to

the COVID-19 emergency through provisions to support the economy, public health, state and
Alexandra Hegji
local governments, individuals, and businesses.
Analyst in Social Policy

The Heroes Act would appropriate $146.7 billion for several education-related initiatives. The
Secretary of Education would distribute $90.0 billion through the State Fiscal Stabilization Fund
Joselynn H. Fountain
Analyst in Education Policy
(SFSF) to states for distribution to LEAs and public IHEs. LEAs and public IHEs could use the

SFSF funds for several purposes not necessarily related to the COVID-19 emergency. An
additional $10.2 billion would be available for allocation to public and private nonprofit IHEs,
Kyrie E. Dragoo
minority-serving IHEs (MSIs), and other specified IHEs to provide grants to students for eligible
Analyst in Education Policy
expenses and to defray select IHE expenses incurred as a result of the COVID-19 emergency. An

appropriation of $45.0 billion would be available to the Secretary of the Treasury to make private
Benjamin Collins
student loan payments on behalf of economically distressed borrowers and to forgive up to
Analyst in Labor Policy
$10,000 of their private student loan debt. In addition, the Federal Communications Commission

(FCC) would receive $1.5 billion for the Emergency Connectivity Fund to support elementary
schools, secondary schools, and libraries in purchasing equipment and services, including wi-fi

hotspots, modems, routers, connected devices, and advanced telecommunications and
information.
Since enactment of the CARES Act, some Members of Congress and other stakeholders have raised concerns over its
implementation and identified limitations that may be inhibiting assistance. The Heroes Act would address certain of these
issues, including those regarding limitations on eligibility for postsecondary student grants and the provision of equitable
services for non-public school students and teachers. The act would, for example, specify that postsecondary student grants
funded under the CARES Act Higher Education Emergency Relief Fund (HEERF) would be available to undocumented
students and to other students that are ineligible for the federal student aid programs authorized by Title IV of the Higher
Education Act (HEA). The act would establish a new formula for LEAs subject to equitable services requirements under the
CARES Act Governor’s Emergency Education Relief (GEER) Fund or the Elementary and Secondary School Emergency
Relief (ESSER) Fund for determining the share of funds that must be reserved by LEAs to serve non -public, elementary and
secondary school students and teachers.
Other key provisions of The Heroes Act would expand on the temporary federal student loan benefits made available under
the CARES Act. It would extend authorization of CARES Act student loan payment suspension through September 2021 and
interest accrual suspension through the later of September 2021 or after specified labor metrics show initial signs of recovery.
The Heroes Act would also authorize new loan benefits to borrowers. Specifically, it would permit the Secretary of Education
and, as applicable, the Secretary of Health and Human Services, to suspend loan payments, interest accrual, and collections
for federal student loan types not covered under the CARES Act; and to cancel or repay up to $10,000 of loans for
economically distressed borrowers. The act would also allow more loan payments to count toward the required payments for
loan forgiveness under income-driven repayment (IDR) plans and Public Service Loan Forgiveness (PSLF), and provide
borrower defense to repayment relief to specified cohorts of borrowers.
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Contents
Introduction ................................................................................................................... 1
Supplemental Appropriations ............................................................................................ 2
State Fiscal Stabilization Fund ..................................................................................... 3
The Emergency Connectivity Fund............................................................................... 4
Higher Education Funding .......................................................................................... 5
Fund for the Improvement of Postsecondary Education .............................................. 6
Minority Serving Institutions Programs ................................................................... 6
Direct Appropriations to Select Universities ............................................................. 8
Department of Education Office of the Inspector General ................................................ 8
CARES Act Amendments and Related Provisions ................................................................ 8
Education Stabilization Fund ....................................................................................... 8
Competitive Grants............................................................................................... 9
Assistance to Non-public Schools ........................................................................... 9
Higher Education Emergency Relief Fund.............................................................. 11
Campus-Based Financial Aid Programs....................................................................... 12
Waivers of Campus-Based Aid Matching Requirements ........................................... 12
FWS During a Qualifying Emergency ................................................................... 12
Tax Treatment of Student Grants ................................................................................ 13
Funding for the Historically Black Colleges and Universities Capital Financing
Program............................................................................................................... 13
Strengthening HBCU Program .................................................................................. 13
Minority Science and Engineering Improvement Program (MSEIP) ................................ 14
Student Loan Provisions................................................................................................. 14
Private Student Loan Relief....................................................................................... 14
Payments on Behalf of Borrowers ......................................................................... 15
Paying Down Private Student Loan Debt ............................................................... 16
Federal Student Loan Relief ...................................................................................... 16
Suspension of Payments and Interest Accrual, and Other Relief ................................. 16
Paying Down Federal Student Loan Debt ............................................................... 18
Consolidating Federal Student Loans and Loan Forgiveness ..................................... 18
Addressing Borrower Defense to Repayment .......................................................... 19
Automatic Closed School Loan Discharge.............................................................. 20
HEA Title IV Administrative Provisions ........................................................................... 21
Modifications to FAFSA and Need Analysis Procedures ................................................ 21
Emergency Financial Aid Grants Excluded From Need Analysis................................ 21
Facilitating Access to Financial Aid for Recently Unemployed Students ..................... 21
Definition of Distance Education ............................................................................... 22
COVID-19 Provisional Program Participation Agreements and Funding .......................... 23
Carl D. Perkins Career and Technical Education Act of 2006 and Adult Education and
Family Literacy Act: Additional Flexibilities .................................................................. 24

Tables
Table 1. The Heroes Act Supplemental Appropriations for Education-Related Provisions ........... 2
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Table 2. MSI Program Al ocations Under the CARES Act and Estimated Al ocations
Under the Heroes Act.................................................................................................... 7

Table A-1. Estimated State Grants and the Al ocation of Funds Within Each State for the
State Fiscal Stabilization Fund Program at an Appropriations Level of $90 Billion ............... 27

Appendixes
Appendix. Estimated State Fiscal Stabilization Fund Grant Allocations ................................. 26

Contacts
Author Information ....................................................................................................... 29

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Introduction
In response to the rapidly evolving COVID-19 pandemic, Congress and the Administration have
taken several actions to support the continued education of elementary, secondary, and higher
education students and to protect student loan borrowers and educational institutions from related
economic hardship. On January 31, 2020, the Secretary of Health and Human Services declared a
public health emergency under Section 319 of the Public Health Service Act (42 U.S.C. §247d). 1
On March 13, the President declared the COVID-19 outbreak a national emergency, beginning
March 1.2
Since early March 2020, the Secretary of Education (hereinafter referred to as the Secretary) has
issued several informational and guidance documents to help education providers respond to
COVID-19-related disruptions to services and administration.3 For example, on March 4, the
Department of Education (ED) Office of Civil Rights reminded schools and educators to take
special care to ensure that al students are able to study and learn free from bias or discrimination
related to racial or ethnic stereotypes associated with COVID-19 infection.4 ED’s guidance has
included information on various existing legislative and regulatory flexibilities and waivers
available to state educational agencies (SEAs), local educational agencies (LEAs), institutions of
higher education (IHEs), higher education accrediting agencies, and student loan borrowers to
facilitate their response to the emergency and to ameliorate impacts.5 For example, on March 5,
ED’s Office of Postsecondary Education provided guidance on flexibilities available to IHEs to
help students complete the term in which they were enrolled.6
The Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136, as amended)
was enacted on March 27, 2020, to authorize the Secretary to grant flexibilities and waivers of
various statutory and regulatory provisions due to the COVID-19 emergency; to provide relief to
postsecondary education students and student loan borrowers; to provide financial support to
states, LEAs, and IHEs to maintain operations and continue supporting students; and to assist
other purposes not directly related to education.7

1 U.S. Department of Health and Human Services (HHS), “Secretary Azar Declares Public Health Emergency for
United States for Coronavirus Disease 2019,” press release, January 31, 2020, https://www.hhs.gov/about/news/2020/
01/31/secretary-azar-declares-public-health-emergency-us-2019-novel-coronavirus.html.
2 T he White House, “ Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease
(COVID-19) Outbreak,” March 13, 2020, https://www.whitehouse.gov/presidential-actions/proclamation-declaring-
national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/, also at U.S. President (T rump),
“Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID–19) Outbreak,” 85 Federal
Register 53, March 18, 2020.
3 See U.S. Department of Education, COVID-19 (“Coronavirus”) Information and Resources for Schools and School
Personnel, available at https://www.ed.gov/coronavirus?src=feature.
4 Letter from Kenneth L. Marcus, Assistant Secretary for Civil Rights, Department of Education, to Education Leaders,
March 4, 2020, https://content.govdelivery.com/accounts/USED/bulletins/27f5130.
5 See U.S. Department of Education, COVID-19 ("Coronavirus”) Information and Resources for Schools and School
Personnel, available at https://www.ed.gov/coronavirus?src=feature.
6 U.S. Department of Education, Office of Postsecondary Education, Guidance for interruptions of study related to
Coronavirus (COVID-19) (Updated March 20, 2020), March 5, 2020, htt ps://ifap.ed.gov/electronic-announcements/
030520Guidance4interruptionsrelated2CoronavirusCOVID19 .
7 For more information, see CRS In Focus IF11509, CARES Act Elementary and Secondary Education Provisions; and
CRS In Focus IF11497, CARES Act Higher Education Provisions.
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The House passed the Heroes Act (H.R. 6800) on May 15, 2020. The act is intended to continue
supporting the nation’s response to the COVID-19 pandemic throughout the federal government,
including its response via several education-related programs.
This report provides brief summaries of key provisions in the Heroes Act that would affect
elementary, secondary, and higher education students and student loan borrowers. The report
begins by describing supplemental funding the act would make available to educational providers
and in support of broadband educational infrastructure. This is followed by sections describing
amendments that would be made to CARES Act education-related provisions, and sections
describing Heroes Act provisions that would provide relief to private and federal student loan
borrowers. The report concludes with descriptions of bil provisions that would authorize new
waivers and flexibilities pertaining to existing legislative requirements in the Higher Education
Act of 1965 (HEA), as amended; the Carl D. Perkins Career and Technical Education Act of 2006
(Perkins), as amended; and the Adult Education and Family Literacy Act (AEFLA), as amended.
Several of the Heroes Act provisions would appropriate funds. As shown in Table 1, the
supplemental appropriations for education-related provisions would sum to approximately $146.7
bil ion. A portion of the Emergency Connectivity Funds would support libraries.
Table 1. The Heroes Act Supplemental Appropriations for Education-Related
Provisions
(Dol ars in thousands)
Program/Activity
Heroes Act Section
Appropriation
State Fiscal Stabilization Fund
Division A, Title VI
$90,000,000
Forgiving Private Student Loan Debt
Division K, Title V
$45,000,000
and Protecting Student Borrowers
Higher Education
Division A, Title VI
$10,150,000
Emergency Connectivity Funda
Division M, Title III
$1,500,000
Department of Education Office of
Division A, Title VI,
$7,000b
the Inspector General
Section 10602
Total

$146,657,000
Source: CRS analysis of The Heroes Act (H.R. 6800), as passed by the House on May 15, 2020.
a. The Emergency Connectivity Fund would provide funds to schools and libraries.
b. H.R. 6800 would rescind the $7 mil ion appropriation provided by the CARES Act for the Office of the
Inspector General and then would appropriate the same amount.
Supplemental Appropriations
The Heroes Act (H.R. 6800) would provide appropriations for new and existing education
programs and other programs that would affect elementary, secondary, and postsecondary
schools. The appropriations would supplement state and local funding for LEAs and public IHEs,
support broadband infrastructure for schools and other facilities, assist private nonprofit IHEs,
fund grants for students enrolled in public and private nonprofit IHEs, and supplement the ED
Office of the Inspector General.
The Heroes Act would establish additional requirements of the Secretary on the use of funding.
The Secretary would be prohibited from establishing priorities or preferences or imposing limits
on the use of funds unless specified in the act when al ocating and awarding the supplemental
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Heroes Act: Education-Related Provisions

appropriations.8 ED and other federal agencies would be required to report to Congress on the use
of al COVID-19-related funding in the Heroes Act and other acts.9
State Fiscal Stabilization Fund
The Heroes Act would provide $90.0 bil ion for a new State Fiscal Stabilization Fund (SFSF) to
prevent, prepare for, and respond to COVID-19 by supplementing state and local funding for
elementary, secondary, and postsecondary education.10 The program would be administered by
ED. The funds would remain available through September 30, 2022. The Secretary would be
required to issue a notice inviting applications for the program within 15 days of enactment of the
act.
After reserving up to 0.5% of the total appropriation for the outlying areas,11 0.5% for the Bureau
of Indian Education (BIE), and $30.0 mil ion for administration and oversight activities
conducted by ED, the remainder of the funds would be awarded by formula to governors of the
50 states, the mayor of the District of Columbia, and the governor of Puerto Rico (hereinafter
referred to as governors) for elementary, secondary, and postsecondary education and, as
applicable, for early childhood education and services.12 The funds would be awarded to
governors based on two formula factors: (1) 61% would be awarded based on each state’s share
of individuals ages 5 through 24 relative to the total number of individuals ages 5 through 24 in
al states; and (2) 39% would be awarded based on each state’s share of children counted under
Section 1124(c) of the Elementary and Secondary Education Act (ESEA) relative to the total
number of children counted in Section 1124(c) for al states.13 Each state would then be required
to al ocate 65% of the funds it received to LEAs and 30% to public IHEs. The remaining 5%
could be used by the governor for statewide elementary, secondary, and postsecondary education
activities. The governor would be required to return to the Secretary any funds that the governor
does not award to LEAs or public IHEs or otherwise commit within two years. The Secretary
would be required to redistribute the funds among the states using the aforementioned formula.
Governors would be required to use state grants and subgrants to “maintain or restore State and
local fiscal support for elementary, secondary, and postsecondary education.”14 Funds provided to
LEAs could be used for a multitude of purposes. LEAs could use them for any activity authorized
by the ESEA, the Individuals with Disabilities Education Act (IDEA),15 the Adult Education and
Family Literacy Act (AEFLA),16 the Carl D. Perkins Career and Technical Education Act (Perkins

8 H.R. 6800, §10606
9 H.R. 6800, §11001.
10 H.R. 6800, Division A.
11 T he term outlying areas is not defined in the act.
12 Although this would be a formula grant program, each state or entity would be required to apply in accordance with
the notice inviting applications.
13 Section 1124(c) references the count of formula children used to determine grants under T itle I -A. For information
about the ESEA and T itle I-A, see CRS Report R45977, The Elem entary and Secondary Education Act (ESEA), as
Am ended by the Every Student Succeeds Act (ESSA): A Prim er.
14 H.R. 6800, Division A.
15 For information about IDEA, see CRS Report R44624, The Individuals with Disabilities Education Act (IDEA)
Funding: A Prim er.
16 For information about AEFLA, see CRS Report R43789, Adult Education and Family Literacy Act: Major Statutory
Provisions.
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Act),17 and the McKinney-Vento Homeless Education program.18 A state or LEA also could use
funds for an array of other authorized purposes, such as supporting online learning, planning and
implementing activities related to supplemental afterschool programs and summer learning,
addressing learning gaps that were created or exacerbated by long-term closures, and supporting
the operation and continuity of services in LEAs, including maintaining employment of existing
personnel and receiving reimbursement for eligible costs incurred during the national emergency.
Public IHEs would be required to use funds for the following:
 education and general expenditures, including defraying expenses due to lost
revenue, reimbursement for expenses already incurred, and payroll;
 grants to students for expenses directly related to COVID-19 and the disruption
of campus operations, which could include emergency financial aid to students
for purposes such as tuition, food, housing, and technology;19 or
 the acquisition of technology and services directly related to the need for distance
education and the training of faculty and staff to use such technology and
services.
Public IHEs also could use funds to support hourly workers. They would be prohibited from
using funds to increase their endowments or for capital outlays associated with facilities related to
athletics, sectarian instruction, or religious worship.
Any state receiving funds under the SFSF would be required to meet several maintenance of
effort requirements related to its percentage of total spending and state support for elementary,
secondary, and higher education relative to prior fiscal years, and would also be required to meet
a maintenance of effort requirement related to spending for public higher education per full-time
equivalent student. The Secretary would not have the authority to waive any of these provisions.
The SFSF also includes several other requirements that would apply to grant recipients. These
requirements would limit the use of funds to assist students to attend private elementary or
secondary schools, require that a recipient of funds “to the greatest extent practicable, continue to
pay its employees and contractors during the period of any disruptions or closures related to
coronavirus,” and require collective bargaining agreements to be maintained.20 Also, any state
receiving a grant would be required to submit a report to the Secretary that provides information
on the uses of funds made available under the SFSF.
The Emergency Connectivity Fund
The Emergency Connectivity Fund21 would be one of two emergency connectivity funds that
would be established by the Heroes Act. The fund would be administered by the Federal

17 For information about Perkins, see CRS Report R45446, Reauthorization of the Perkins Act in the 115th Congress:
The Strengthening Career and Technical Education for the 21st Century Act.
18 For information about the McKinney-Vento Homeless Education program, see CRS Report RL30442,
Hom elessness: Targeted Federal Program s.
19 Students would not be required to repay this aid. Section 150110 of T he Heroes Act would prohibit the Secretary
from establishing student eligibility criteria on any financial aid grants provided by IHEs from the appropriation and
would establish eligibility for students who are unauthorized immigrants.
20 T his would apply to collective-bargaining agreements as defined by Section 2(5) of the National Labor Relations Act
or any analogous state law. States also would be required to maintain the terms and conditions of employment set forth
in such agreements.
21 H.R. 6800, §130201.
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Communications Commission (FCC) and would be designed to prevent, prepare for, and respond
to the COVID-19 pandemic.22 It would provide elementary schools, secondary schools, and
libraries23 with funds for the purchase of equipment and services, including wi-fi hotspots,
modems, routers, connected devices, and advanced telecommunications and information services,
for FY2020 through FY2021.
The Emergency Connectivity Fund would be administered through FCC’s Universal Service
Fund (USF) schools and libraries (E-Rate) program.24 Unlike the current USF E-Rate program,25
the provisions of the Heroes Act related to the Emergency Connectivity Fund would al ow funds
to be used to support remote learning by al owing for the purchase of equipment and services for
students and school personnel at locations other than schools, and for library patrons at locations
other than libraries.
A school or library that purchases equipment with money from the Emergency Connectivity
Fund26 may continue to use that equipment after the emergency period for which the support is
received. However, the school or library may not sel or otherwise transfer the equipment
purchased with Emergency Connectivity Fund dollars in exchange for anything (including a
service) of value.27
The Heroes Act would provide an immediate $1.5 bil ion for the Emergency Connectivity Fund,
to be administered through FCC’s USF E-Rate program, and it would authorize an appropriation
of $5.0 bil ion for the Emergency Connectivity Fund for FY2020, to remain available through
FY2021.28
Higher Education Funding
The CARES Act provided approximately $14.0 bil ion for a Higher Education Emergency Relief
Fund (HEERF), of which the Secretary was required to al ocate funds to IHEs through three
programs: Direct Grants to IHEs; Programs for Minority Serving Institutions29 (MSI programs);
and the Fund for the Improvement of Postsecondary Education (FIPSE) program. The Higher

22 T he Emergency Broadband Connectivity Fund (H.R. 6800, §130301), the second fund that would be created by the
Heroes Act, would provide reimbursements to internet service providers that provide eligible households with
discounted internet service offerings. An “ eligible household,” must meet at least one of several criteria. One qualifying
criterion, relevant to education and public school students, is having at least one member of the household who has
applied for and been approved to receive benefits through the free and reduced price lunch program under the Richard
B. Russell National School Lunch Act (42 U.S.C. §1751 et seq.) or the school breakfast program under Section 4 of the
Child Nutrition Act of 1966 (42 U.S.C. §1773).
23 T he act requires 5% of these funds to be set aside for tribal elementary schools, tribal secondary schools, or tribal
libraries.
24 T he FCC oversees a number of programs through its Universal Service Fund (USF) aimed at promoting access to
high-speed internet, including the E-Rate program. For more information on USF programs, including the E-rate
Program, see CRS Report RL30719, Broadband Internet Access and the Digital Divide: Federal Assistance Program s.
25 T he USF E-rate program provides subsidies for eligible elementary and secondary schools and libraries for internet
access, internal network connections, and telecommunications services. E-rate only supports projects within school or
library buildings or that connect schools and libraries to broadband.
26 Equipment purchased by a school or library may include devices intended t o be loaned to students and their families.
27 T he exception to this prohibition is that a school or library may exchange equipment purchased through the
Emergency Connectivity Fund for upgraded equipment of the same type.
28 Division A, T itle III of the Heroes Act would provide the immediate appropriation. Division M, T itle II of the act
would authorize an appropriation.
29 For more information on Minority Serving Institutions, see CRS Report R43237, Programs for Minority-Serving
Institutions Under the Higher Education Act.
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Education Act (HEA), as amended 30 (the primary legislative vehicle for federal higher education
support and oversight), authorizes the MSI programs (HEA, Title III-A, Title III-B, Title V, and
Title VII-A-4) and FIPSE (HEA, Title VII-B). Additional appropriations were also provided for
select IHEs—the Institute of American Indian and Alaska Native Culture and Arts Development,
Gal audet University, and Howard University—under the CARES Act.31
The Heroes Act would provide approximately $10.2 bil ion for supplemental appropriations for
IHEs through FIPSE and the MSI programs, and for select IHEs.32 The higher education funds
could be used to provide grants to students for eligible expenses and to defray select IHE
expenses incurred as a result of the COVID-19 emergency. The act would prohibit the Secretary
from establishing student eligibility criteria for the grants and would establish eligibility for
students who are unauthorized immigrants.33
Fund for the Improvement of Postsecondary Education
The CARES Act directed the Secretary to al ocate approximately $348.8 mil ion for FIPSE for
public and private nonprofit IHEs that the Secretary determined to have the greatest unmet needs
related to the COVID-19 emergency. Funds disbursed under FIPSE may be used to provide grants
to students for eligible expenses and to defray select IHE expenses.
The Heroes Act would provide $8.4 bil ion for FIPSE, $7.0 bil ion of which would be al ocated to
private nonprofit IHEs through a formula based on each IHE’s enrollment of students who were
not exclusively enrolled in distance education courses prior to the COVID-19 emergency. From
that $7.0 bil ion, the Secretary would be required to reserve an amount for each private nonprofit
IHE that has a total enrollment of at least 500 students but that would not otherwise receive a
grant of at least $1.0 mil ion according to the formula, for a minimum grant that is the lesser of
either $1.0 mil ion or the total loss of revenue and increased costs associated with the pandemic.34
The remaining $1.4 bil ion of appropriated funds for FIPSE would be awarded competitively to
public and private nonprofit IHEs with unmet need related to the pandemic.
Minority Serving Institutions Programs
The CARES Act directed the Secretary to al ocate approximately $1.0 bil ion among the MSI
programs according to each program’s proportional share of funds al ocated under the Further
Consolidated Appropriations Act, 2020 (P.L. 116-94). The CARES Act did not specify how
program funds should be distributed to each eligible MSI.
The Heroes Act would provide over $1.7 bil ion for the MSI programs according to each
program’s proportional share of funds al ocated under P.L. 116-94. The process for distributing
funds among IHEs would vary by program in accordance with HEA provisions. For example,
funds for IHEs eligible to participate in the Strengthening Historical y Black Colleges and
University (HBCU) program would be al ocated by a formula based on each IHE’s enrollment of
students and endowment size. Funds for IHEs eligible to participate in the Strengthening

30 For a description of the HEA, see CRS Report R43351, The Higher Education Act (HEA): A Primer.
31 For more information on the CARES Act HEERF, see CRS Report R46378, CARES Act Education Stabilization
Fund: Background and Analysis.
32 H.R. 6800, Division A.
33 H.R. 6800, §150110.
34 T here appears to be a drafting error in H.R. 6800 in which the provisions regarding the reserve makes reference to
the second to last provision, when it appears it should reference the fifth to last provision.
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American Indian Tribal y Controlled Colleges and Universities (TCCU) program would be
al ocated according to the HEA formula used to al ocate funds for the TCCU program.35 Funds
for the Strengthening Institutions Program would be al ocated to eligible IHEs that apply for
funds and demonstrate unmet need. Table 2 provides the amount provided for MSI programs
under the CARES Act and estimates of the amount that would be provided under the Heroes Act.
Table 2. MSI Program Allocations Under the CARES Act and Estimated Allocations
Under the Heroes Act
(Dol ars in thousands)
Allocation
Estimated
Under the
Allocation Under
Program
CARES Act
the Heroes Act
Strengthening Institutions Program (HEA, Title III-A)
$148,619
$248,494
Strengthening American Indian Tribal y Control ed Col eges and
$50,469
$84,402
Universities (HEA, Title III-A)
Strengthening Alaska Native and Native Hawai an-Serving Institutions
$24,735
$42,209
(HEA, Title III-A)
Strengthening Predominantly Black Institutions (HEA, Title III-A)
$17,818
$30,406
Strengthening Native American-Serving, Nontribal Institutions (HEA,
$6,000
$10,239
Title III-A)
Strengthening Asian American and Native American Pacific Islander-
$6,123
$10,239
Serving Institutions (HEA, Title III-A)
Strengthening Historical y Black Col eges and Universities (HBCUs)
$447,466
$748,315
(HEA, Title III-B)
Strengthening Historical y Black Graduate Institutions (HEA, Title III-B)
$115,720
$193,523
Developing Hispanic-Serving Institutions (HEA, Title V-A)
$193,180
$329,656
Promoting Postbaccalaureate Opportunities for Hispanic Americans
$17,333
$29,579
(HEA, Title V-B)
Masters Degrees at HBCUs (HEA, Title VII-A-4)
$13,716
$22,938
Subtotal
$1,038,057
$1,708,000
Reserve for subsequent awards
$8,381
—
Total
$1,046,438
$1,708,000
Source: Al ocations published by the U.S. Department of Education (ED), Formula Al ocations for Section
18004(a)(2) of CARES Act, at https://www2.ed.gov/about/offices/list/ope/al ocationshbcutccumsisip.xlsx; and CRS
analysis of the ED supplemental appropriations for the Higher Education account in Division A of the Heroes Act
(H.R. 6800).
Notes: In FY2020, the Minority Science and Engineering Program (MSEIP) authorized under HEA Title III-E
received $12.8 mil ion in discretionary appropriations. The Heroes Act would not authorize the Secretary to
al ocate funds to the MSEIP; thus, the program was excluded when determining the estimated share of funding
that would be al ocated to each program.

35 T he formula is provided in Section 316(d)(3) of the HEA.
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Direct Appropriations to Select Universities
Under annual appropriations acts, four IHEs regularly receive a direct appropriation for ongoing
support: Gal audet University, Howard University, the Institute of American Indian and Alaska
Native Culture and Arts Development (IAIA), and the National Technical Institute for the Deaf
(NTID).36 The CARES Act provided $7.0 mil ion to Gal audet University, $13.0 mil ion to
Howard University, and $78,000 to IAIA to prevent, prepare for, and respond to COVID-19, and,
as specified, to enable grants to students for expenses directly related to the pandemic and the
disruption of university operations.
The Heroes Act would appropriate $11.0 mil ion to Gal audet University, $20.0 mil ion to
Howard University, and $11.0 mil ion to NTID for grants to students for expenses, and to help
defray IHE expenses, related to the pandemic.37
Department of Education Office of the Inspector General
Under the CARES Act, $7.0 mil ion was appropriated for the Office of the Inspector General
(OIG) “to prevent, prepare for, and respond to coronavirus, domestical y or international y.”
Among other purposes, funds could be used for “salaries and expenses necessary for oversight
and audit of programs, grants, and projects” funded under the CARES Act in response to the
pandemic. The funds are to remain available until September 30, 2022.
The Heroes Act would rescind the appropriations made available under the CARES Act and make
them available under the Heroes Act.38 The funds would be available for the same purposes and
authorities for which they were original y appropriated under the CARES Act and, as added by
the Heroes Act, also would be available for investigations. The funds would remain available
until expended and would be in addition to any other funds available for such purposes.
CARES Act Amendments and Related Provisions
The Heroes Act would amend several CARES Act education-related provisions. The Heroes Act
would also require IHEs and ED to provide more frequent or extensive reporting to the
congressional authorizing committees on
 the implementation of provisions under the CARES Act and the Heroes Act; and
 modifications and waivers of HEA legislative provisions, regulations, or
guidance intended, granted, or denied that were not authorized by the CARES
Act.39
Education Stabilization Fund
The CARES Act authorized almost $30.8 bil ion for the Education Stabilization Fund (ESF),
which is administered by ED. The ESF is distributed through competitive grants; a Governor’s

36 Rochester Institute of T echnology is the sponsoring institution of the National T echnical Institute for the Deaf.
37 Section 150110 of t he Heroes Act would prohibit the Secretary from establishing student eligibility criteria on any
financial aid grants provided by IHEs from the appropriation and would establish eligibility for students who are
unauthorized immigrants.
38 H.R. 6800, §10602.
39 H.R. 6800, Division O, T itle I-D.
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Emergency Education Relief (GEER) Fund; an Elementary and Secondary School Emergency
Relief (ESSER) Fund; and a Higher Education Emergency Relief Fund (HEERF).40
Competitive Grants
The CARES Act requires the Secretary to reserve 1% of the total appropriation for the ESF to
provide competitive grants to the states with the “highest coronavirus burden” to support
activities under the ESF. The statutory language does not define “highest coronavirus burden” or
indicate how this should be determined. On April 27, 2020, ED announced two types of
competitive grants: (1) $180.0 mil ion for Education Stabilization Fund—Rethink K12 Education
Models Grants (ESF-REM Grants), and (2) $127.5 mil ion for Education Stabilization Fund—
Reimagining Workforce Preparation Grants (ESF-RWP Grants).41 Some observers have expressed
concerns about the inclusion of microgrants,42 viewed by some as private school vouchers, as one
of three priorities under the ESF-REM grants.43
The Heroes Act would strike the reservation of 1% of funds under the ESF for competitive
grants.44 In effect, this would increase the overal amount of funding available under the GEER
Fund, ESSER Fund, and HEERF.
Assistance to Non-public Schools
Under the CARES Act, an LEA that receives funds under the GEER Fund or the ESSER Fund is
subject to equitable services requirements. More specifical y, LEAs receiving such funds must
reserve the required amount of funding to provide equitable services in the same manner as under
Section 1117 of the ESEA to students and teachers in non-public schools. The provision of
services to such students and teachers must be determined in consultation with representatives of
non-public schools.

40 For more information on the CARES Act ESF, see CRS Report R46378, CARES Act Education Stabilization Fund:
Background and Analysis.
41 U.S. Department of Education, “Secretary DeVos Launches New Grant Competition to Spark Student -Centered,
Agile Learning Opportunities to Support Recovery from National Emergency,” press release, April 27, 2020,
https://www.ed.gov/news/press-releases/secretary-devos-launches-new-grant -competition-spark-student -centered-agile-
learning-opportunities-support-recovery-national-emergency.
42 SEAs have the option to apply to use the funds to provide microgrants to parents to meet the educational needs of
their school-age children, through increased access to high-quality remote learning to support their educational needs.
A microgrant is defined as “ an account established for a parent that provides funds directly to service providers to
expand educational choice. T he parent must have easy access to and visibility into the acco unt and it must allow the
parent to select particular education services, expenses, or materials, to expand the ability to choose high -quality
educational opportunities to meet their needs.” U.S. Department of Education, Notice Inviting Application (NIA) for the
FY 2020 Education Stabilization Fund —Rethink K-12 Education Models (ESF-REM) Discretionary Grant Program ,
Notice for posting in the Federal Register, April 27, 2020, p. 17, https://oese.ed.gov/files/2020/04/ESF-REM-Notice-
Inviting-Applications.pdf.
43 See, for example, Andrew Ujifusa, “Betsy DeVos Introduces Grants to ‘Rethink’ Learning During COVID -19,”
April 27, 2020, https://blogs.edweek.org/edweek/campaign-k-12/2020/04/
betsy_devos_coronavirus_grants_rethink_learning.html; and Letter from National Coalition for Public Education t o
T he Honorable Mitch McConnell, Senate Majority Leader; T he Honorable Charles Schumer, Senate Minority Leader;
T he Honorable Nancy Pelosi, Speaker of the House; and T he Honorable Kevin McCarthy, House Minority Leader;
June 2, 2020, http://go.politicoemail.com/?qs=
0d351c67e8c9f87c1c2bdc47f943dc845a8ec52208d43f1e312a86baaa9c37c900d7193f680cfc94ffc31099a9b5e9a4.
(Letter made available by Politico in Politico’s Pro Morning, June 3, 2020 edition.)
44 H.R. 6800, §10603.
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The calculation that LEAs should use to implement this provision has been a topic of
disagreement.45 ED initial y released non-binding guidance46 that would require LEAs to
determine the amount of funds to be reserved based on the enrollment of al private school
students in private schools located in the LEA.47 This stood in contrast to the usual calculation
used to determine the reservation of funds under the Section 1117 provision, which is based on
the number of private school students from low-income families who reside in the school
attendance area of a public Title I-A school. In response to a letter from the Council of Chief State
School Officers48 asking ED to clarify its guidance, ED indicated that it plans to issue a rule
related to its guidance on equitable services under the ESF.49
On July 1, 2020, ED published an interim final rule providing LEAs with three ways to
implement the equitable services provision.50 Under one option, an LEA can determine the
proportional share based on enrollment in participating non-public elementary and secondary
schools in the LEA compared to the total enrollment in public and participating non-public
elementary and secondary schools in the LEA (total enrollment option).
The remaining options are available to LEAs only if they agree to use those funds available for
public education to serve exclusively students and teachers in public Title I-A schools. If this
condition is met, the LEA may determine the share of funds to be reserved to serve students and
teachers in non-public schools by either (1) using the proportional share of Title I-A funds
calculated by the LEA under Section 1117(a)(4)(A) of the ESEA for the 2019-2020 school year,
or (2) determining the number of children ages 5-17 who are from low-income families and
attend each non-public school in the LEA that wil be participating in a CARES Act program
compared to the total number of children ages 5-17 who are from low-income families in Title I-
A schools and participating non-public elementary and secondary schools in the LEA. In addition,
if an LEA chooses to implement one of the latter two options, it must comply with the supplement

45 See, for example, Andrew Ujifusa, “Sen. Alexander Splits From Betsy DeVos on COVID-19 Aid to Help Private
Schools,” Education Week, May 21, 2021, http://blogs.edweek.org/edweek/campaign-k-12/2020/05/alexander-devos-
COVID-aid-private-schools-CDC-reopening.html, and Letter from Robert C. “ Bobby” Scott, Chair, Committee on
Education and Labor, U.S. House of Representatives, Rosa L. DeLauro, Chair, Committee on Appropriations,
Subcommittee on Health and Human Services, Labor, and Education and Other Related Services, U.S. House of
Representatives, and Patty Murray, Ranking Member, Committee on Health, Education, Labor, and Pensions, U.S.
Senate, to T he Honorable Betsy DeVos, Secretary of Education, May 20, 2020, https://edlabor.house.gov/imo/media/
doc/2020-5-20%20Ltr%20to%20DeVos%20re%20Equitable%20Services.pdf .
46 ED has removed the guidance from its website as the guidance does not match the Interim Final Rule that ED
published in July. T he guidance is available from the authors of this report upon request.
47 For a more detailed discussion of the calculation of the reservation of funds for equitable services under ESEA,
Section 117 and ED’s guidance, see CRS Report R46378, CARES Act Education Stabilization Fund: Background and
Analysis.
48 Letter from Carissa Moffat Miller, Executive Director, Council of Chief State School Officers, to Secretary Betsy
DeVos, Secretary of Education, May 5, 2020, https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=
&ved=2ahUKEwj73ZLI1cfpAhWRgnIEHZugAZoQFjAAegQIBBAB&url=
https%3A%2F%2Fccsso.org%2Fsites%2Fdefault%2Ffiles%2F2020 -05%2FDeVosESLetter050520.pdf&usg=
AOvVaw2GJDElYRfzHpWo8Udl7QSC.
49 Letter from Secretary Betsy DeVos, Secretary of Education, to Carissa Moffat Miller, Executive Director, Council of
Chief State School Officers, May 22, 2020, https://blogs.edweek.org/edweek/campaign-k-12/
Secretary%20DeVos%20Response%20to%20Carrisa%20Moffat%20Miller%205%2022%2020.pdf . (Letter made
available in the following article: Andrew Ujifusa, “DeVos to Release Rule Cementing COVID Aid Push for Private
School Students,” Education Week, May 26, 2020, https://blogs.edweek.org/edweek/campaign-k-12/2020/05/devos-
covid-aid-private-school-students-rule.html.)
50 U.S. Department of Education, “CARES Act Programs; Equit able Services to Students and T eachers in Non-Public
Schools,” 85 Federal Register 39479-39488, July 1, 2020.
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not supplant requirement included in Section 1118(b) of the ESEA.51 Among other things, this
requirement prohibits the LEA from al ocating CARES Act funds to Title I-A schools and then
redirecting state or local funds to non-Title I-A schools.
The Heroes Act would amend the CARES Act to establish a formula for determining the share of
funds that must be reserved by LEAs to serve non-public school students and teachers under the
GEER Fund and ESSER Fund.52 The formula would require LEAs to reserve funds to serve non-
public school students and teachers based on the number of low-income non-public school
students counted under ESEA Section 1117 for Title I-A purposes for the 2019-2020 school year
relative to the total number of low-income public school students included in the Section 1117
calculation for Title I-A purposes for the 2019-2020 school year. The Heroes Act amendment
would result in LEAs having to reserve a larger share of funds to serve non-public school students
and teachers than they would have to reserve based on the usual reservation of funds calculation
made under Section 1117. However, the new formula could result in LEAs having to reserve a
smal er share of funds than would have to be reserved under the total enrollment option included
in ED’s interim final rule. In addition, the Heroes Act would not limit the use of the GEER Fund
and ESSER Fund grants for public education to students and teachers in Title I-A schools only. It
also would not apply a supplement not supplant requirement to the use of GEER Fund and
ESSER Fund grants in public schools if the LEA opted to calculate the share of funds to be
reserved to provide services to students and teachers in non-public schools based on the 2019-
2020 school year Title I-A equitable services calculation or on low-income student enrollment in
public and participating non-public elementary and secondary schools.
Higher Education Emergency Relief Fund
Under the CARES Act, the HEERF is awarded as direct grants to IHEs. The majority (90%) of
the HEERF is awarded as direct Institutional or Student Aid grants. The Student Aid grants must
be used for emergency financial aid grants to students. The Institutional grants may be used for
student grants or to cover any costs associated with significant changes to the delivery of
instruction due to the COVID-19 emergency.53 The remaining 10% of the HEERF, distributed
under the MSI programs and FIPSE, may be used by IHEs to provide grants to students and to
defray IHE expenses, including lost revenue, reimbursement for expenses already incurred,
technology costs associated with a transition to distance education, faculty and staff training, and
payroll.
HEERF Institutional Grants to IHEs
The Heroes Act would amend the CARES Act to authorize IHEs to use institutional grants in the
same manner as IHEs receiving HEERF MSI or FIPSE funds.54

51 T he CARES Act did not apply a supplement not supplant requirement to either the GEER Fund or the ESSER Fund.
For more information about the T itle I-A supplement not supplant requirement, see CRS In Focus IF10405, Fiscal
Accountability Requirem ents That Apply to Title I-A of the Elem entary and Secondary Education Act (ESEA) .
52 H.R. 6800, §10604.
53 T he CARES Act prohibits IHEs from using funds for paying contractors to provide pre-enrollment recruitment
activities, for endowments, or for capital outlays associated with facilities related to athletics, sectarian instruction, or
religious worship.
54 H.R. 6800, §10605.
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HEERF Student Aid Grants to IHEs
The CARES Act did not establish eligibility criteria for students to receive financial aid grants
from their IHEs under the HEERF. The Secretary limited the financial aid grants to individuals
eligible to receive HEA Title IV aid.55 The Heroes Act would prohibit the Secretary from
imposing student eligibility restrictions and would expand eligibility to students who are
unauthorized immigrants, effective on the date of enactment of the CARES Act.56
Campus-Based Financial Aid Programs
The Federal Supplemental Educational Opportunity Grant (FSEOG) program and the Federal
Work-Study (FWS) program are two campus-based financial aid programs authorized under Title
IV of the HEA.57 Under the FSEOG program, federal funds are al ocated to IHEs for the purpose
of making grants to undergraduate students with financial need. The FWS program provides
grants to IHEs to provide undergraduate, graduate, and professional students the opportunity for
paid employment in a field related to their course of study or in community service.
Waivers of Campus-Based Aid Matching Requirements
Section 3503 of the CARES Act required the Secretary to waive the non-federal matching
requirement58 for IHEs participating in the FSEOG and the FWS programs for federal funds made
available for award years 2019-2020 and 2020-2021, with one exception: private for-profit
organizations that employ FWS students are stil required to provide a match of federal funds
received. The Heroes Act would amend Section 3503 of the CARES Act to require that the
Secretary waive any requirement that a nonprofit employer provide a match of federal funds
received under the FWS program.59
FWS During a Qualifying Emergency
Section 3505 of the CARES Act permits an IHE participating in the FWS program to continue
making payments to students who participated in the program but were unable to fulfil their
work-study obligation due to a qualifying emergency. Under the CARES Act, IHEs are able to
make payments for the period of time, not to exceed one academic year, that the students were

55 For students who have not demonstrated eligibility by filing a Free Application for Federal Student Aid (FAFSA),
the IHE would have to find a way for such students to demonstrate eligibility in order to receive emergency financial
aid grants. U.S. Department of Education, “ Frequently Asked Questions about the Emergency Financial Aid Grants to
Students under Section 18004 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act,”
https://www2.ed.gov/about/offices/list/ope/heerfstudentfaqs.pdf (accessed April 22, 2020); and Letter from Betsy
DeVos, Secretary of Education to College and University Presidents, April 30, 2020, https://www2.ed.gov/about/
offices/list/ope/coverletterhbcumsisiptccu.pdf (accessed May 15, 2020).
56 H.R. 6800, §150110. Nonimmigrant (international) students would also be eligible under the provision.
57 For more information about the campus-based aid programs, see CRS Report RL31618, Campus-Based Student
Financial Aid Program s Under the Higher Education Act.
58 H.R. 6800, §150102. T ypically, IHEs participating in the FSEOG and FWS programs are required to provide a non -
federal match of the federal funds received.
59 T he HEA does not include provisions requiring that nonprofit employers provide a match under FWS. 34 C.F.R.
§675.20 provides that if an IHE chooses to have its FWS students employed by a federal, state, or local agency, or
nonprofit or for-profit organization, it shall enter into a written agreement with that agency or organization. The
agreement must indicate whether the institution or the agency/organization will pay the employed students. T hus, it is
possible that an agreement between an IHE and a nonprofit employer could specify that the nonprofit employer provide
the match in funds.
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unable to fulfil their work-study obligation. The Heroes Act would al ow IHEs to pay students
for the full amount of time they were unable to fulfil their work-study obligation, even if it
exceeds one academic year.60
Tax Treatment of Student Grants
The CARES Act established emergency financial aid grants for postsecondary students to cover
unexpected expenses related to disruptions of campus operations due to the COVID-19 pandemic
under the HEERF and the FSEOG program.61 The CARES Act did not include provisions
regarding the tax treatment of these emergency grants.
The Heroes Act would exclude from gross income any qualified emergency financial aid grants;
thus, the grants would not be subject to federal income tax.62 Additional y, under the Heroes Act
the emergency grants would not be considered when calculating education tax benefits (i.e.,
American Opportunity Tax Credit, Lifetime Learning Credit) and the tuition and fees deduction.63
The act defines qualified emergency financial aid grants as student grants made available under
the FSEOG program and the HEERF as authorized by the CARES Act, as wel as “any other
emergency grant aid to a student from a federal agency, a state, an Indian tribe, an institution of
higher education, or a scholarship-granting organization … for the purpose of providing financial
relief to students enrolled at institutions of higher education in response to a qualifying
emergency.”64
Funding for the Historically Black Colleges and Universities
Capital Financing Program
The HBCU Capital Financing Program assists HBCUs in obtaining low-cost capital financing for
campus maintenance and construction projects. Section 3512 of the CARES Act authorized the
Secretary to grant loan deferments during a qualifying emergency to IHEs participating in the
program. The CARES Act appropriated $62.0 mil ion for the Secretary to pay the required
principal and interest due during the period of the deferment. At the end of the deferment, an IHE
is required to repay the Secretary for payments made on its behalf. The Heroes Act would amend
the amount of $62.0 mil ion provided under the CARES Act to be “such sums as may be
necessary.”65
Strengthening HBCU Program
The Strengthening HBCU program awards grants to eligible HBCUs to assist them in
strengthening their academic, administrative, and fiscal capabilities. Howard University and the
University of the District of Columbia (UDC) are HBCUs that receive permanent annual
appropriations, which general y make them ineligible for the Strengthening HBCU program. The
CARES Act provided the Secretary the authority to waive the ineligibility provision beginning on

60 H.R. 6800, §150103.
61 P.L. 116-136, §3504.
62 H.R. 6800, §20232.
63 Generally, education expenses used to calculate these tax benefits must be reduced by any tax -free (i.e., excluded
from gross income) financial aid, which may reduce the value of the benefits.
64 H.R. 6800, §20232(b).
65 H.R. 6800, §150105.
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the first day of the qualifying emergency through September 30 of the fiscal year following the
end of the qualifying emergency. The Heroes Act would eliminate the authority granted to the
Secretary under the CARES Act to waive the ineligibility provision.66
Minority Science and Engineering Improvement Program (MSEIP)
The MSEIP provides grant-based assistance to predominantly minority institutions to foster long-
term improvements in science and engineering education and to increase the number of
underrepresented minorities in science and engineering careers.67 Section 3518 of the CARES Act
granted the Secretary the authority to waive the al owable use of funds under several HEA
programs, including many of the HEA Title III programs. The Heroes Act would extend the
waiver authority to include the MSEIP.68
Student Loan Provisions
The Heroes Act would provide relief to federal and private student loan borrowers adversely
affected by the COVID-19 emergency. It would provide temporary loan repayment on behalf of,
and forgiveness to, eligible private student loan borrowers, expand temporary federal student loan
benefits made available under the CARES Act, and authorize new federal student loan benefits to
borrowers.
The Heroes Act would include special provisions for economically distressed borrowers. A
borrower of a federal or private student loan would qualify as economical y distressed if, as of
March 12, 2020, (1) the borrower’s loan was in default, (2) the borrower’s loan payment was at
least 90 days past due, (3) the borrower’s loan was in forbearance or deferment under specified
conditions, (4) the borrower had a $0 monthly payment amount under a federal income-driven
repayment (IDR) plan,69 or (5) the borrower would qualify for a monthly payment of $0 under an
IDR plan if the borrower’s loan was a federal student loan rather than a private loan.70
Private Student Loan Relief
The Heroes Act would define private education loans as loans provided by a private educational
lender71 to a borrower expressly for postsecondary educational expenses that are not made,

66 H.R. 6800, §150106.
67 For more information about MSEIP, see CRS Report R43237, Programs for Minority-Serving Institutions Under the
Higher Education Act.
68 H.R. 6800, §150107.
69 In addition, Perkins Loan borrowers who are receiving benefits under the Armed Forces Student Loan Interest
Payment Program for Members on Active Duty (10 U.S.C. §2174) would be considered economically distressed.
70 A borrower may qualify for an economic hardship deferment if he or she is (1) receiving payments under a federal or
state public assistance program (e.g., T emporary Assistance for Needy Families [T ANF] , Supplemental Security
Income [SSI], Supplemental Nutrition Assistance Program [SNAP], state general public assistance, other means-tested
benefits), or (2) working full-time and has a monthly income that does not exceed an amount equal to 150% of the
poverty line applicable to the borrower’s family size, as calculated on a monthly basis.
71 A private educational lender is “(A) a financial institution, as defined in section 1813 of title 12 that solicits, makes,
or extends private education loans; (B) a Federal credit union, as defined in section 1752 of title 12 that solicits, makes,
or extends private education loans; and (C) any other person engaged in the business of soliciting, making, or extending
private education loans” (15 U.S.C. § 1650(a)(7)).
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insured, or guaranteed under Title IV of the HEA.72 This definition would general y include loans
authorized under the Public Health Service Act (PHSA). Additional y, however, the Heroes Act
would amend the CARES Act to define federal student loans as inclusive of PHSA loans for the
purposes of federal student loan relief. It is therefore unclear whether PHSA loans would also be
eligible for the private student loan relief proposed in this bil . PHSA loans are further discussed
in the “Federal Student Loan Relief” section below.
The Heroes Act would appropriate $45.0 bil ion to provide private student loan payments and
relief to eligible borrowers.73
Payments on Behalf of Borrowers
The Truth in Lending Act of 1968 (TILA; P.L.90-301) applies to al forms of consumer credit,
requiring covered lenders to disclose the total cost of credit. The Heroes Act would amend TILA
to direct the Secretary of the Treasury to make monthly payments on private education loans on
behalf of economical y distressed borrowers from the date of enactment through September 30,
2021.74 Aggregate payments would be capped at $10,000 per borrower through September 30,
2021. A private education loan would be defined as a loan provided by a private lender for
postsecondary education expenses that is not made, insured, or guaranteed under HEA Title IV.
The Secretary of the Treasury would be responsible for outreach and proper credit reporting.
Within 15 days of enactment and monthly thereafter through September 30, 2021, the Secretary
of the Treasury would be required to inform economical y distressed borrowers of the temporary
benefits provided and provide an easily accessible method for borrowers to opt out. Holders of
loans would not be permitted to opt out. The Heroes Act would require the Secretary of the
Treasury to ensure that any loan payments that the Secretary of the Treasury makes on behalf of
borrowers would be reported to consumer credit reporting agencies as if the payments were made
by the borrowers.
Holders of affected private student loans would have to meet several requirements. Loan servicers
would be required to grant mandatory forbearance to borrowers of any loan for which the
Secretary of the Treasury makes payments, and such forbearance would be made retroactive for
loans that were in delinquent, but not in default, status prior to the commencement of the Treasury
Secretary’s payments.75 Such forbearance would formal y relieve borrowers of their obligation to
make payments during the period in which the Treasury Secretary makes payments on their
behalf. The act would also prohibit any involuntary collections actions or adverse reporting to
consumer credit reporting agencies concerning private education loans of economical y distressed
borrowers through September 30, 2021. Any holder of private education loans that receives such
loan payments from the Secretary of the Treasury would be required to modify its private loan
contracts in order to offer economical y distressed borrowers of private education loans the same

72 15 U.S.C. §1650(a)(8).
73 H.R. 6800, §110501(b).
74 H.R. 6800, §110501.
75 Such payments made or forbearance granted would not affect state statutes of limitations (H.R. 6800,
§110502(a)(2)).
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repayment plan and loan forgiveness options available to borrowers of federal Direct Loans in the
Revised Pay As You Earn (REPAYE) repayment plan76 for the remaining life of the loans.77
Paying Down Private Student Loan Debt
After September 30, 2021, economical y distressed borrowers whose private education loan
payments were made by the Secretary of the Treasury would receive loan relief equal to the lesser
of the amount of their outstanding private education loan balance or $10,000 minus the aggregate
amount of payments made on their behalf by the Secretary of the Treasury.78 The Heroes Act
would al ow borrowers to select the private education loan to which this amount of relief would
be applied,79 and it would prohibit creditors and debt collectors from pressuring borrowers
regarding this selection.80 If a borrower did not make a selection, the amount would be
automatical y applied to the borrower’s private education loan with the highest interest rate.81
Federal Student Loan Relief
The HEA authorizes three federal student loan programs: the Wil iam D. Ford Federal Direct
Loan (Direct Loan) program, the Federal Family Education Loan (FFEL) program, and the
Federal Perkins Loan program. While new loans are authorized to be made only through the
Direct Loan program, FFEL and Perkins Loan program loans remain outstanding and borrowers
of such loans remain responsible for repaying them. In addition, over the years, the Public Health
Service Act (PHSA) has authorized a variety of student loan programs (hereinafter referred to as
PHSA Loans) to support specific health professions students.82
The Heroes Act would expand on the temporary federal student loan benefits made available
under the CARES Act and authorize new loan benefits to borrowers of federal student loans.
Suspension of Payments and Interest Accrual, and Other Relief
Section 3513 of the CARES Act provided several types of loan benefits to borrowers of Direct
Loans and borrowers of ED-held FFEL program loans.83 ED administratively extended these
benefits to loans made under the Perkins Loan program that are held by ED.84 Benefits provided

76 REPAYE is an income-driven repayment plan in which monthly payments are generally 10% of discretio nary
income and any remaining loan balance is forgiven after 20 years for undergraduate loans or 25 years for graduate or
professional school loans (34 C.F.R. §685.209(c)). Discretionary income is defined as the portion of a borrower ’s
adjusted gross income that is in excess of a specified multiple of the federal poverty guidelines applicable to the
borrower’s family size.
77 H.R. 6800, §110502(a)(1).
78 H.R. 6800, §110502(b)(1).
79 H.R. 6800, §110502(b)(3)(A).
80 H.R. 6800, §110502(a)(3).
81 H.R. 6800, §110502(b)(3)(B).
82 PHSA Loans are administered by the Department of Health and Human Services. For additional infor mation on
PHSA Loans, see CRS Report R43571, Federal Student Loan Forgiveness and Loan Repaym ent Programs.
83 For additional information on the federal student loan debt relief afforded to borrowers in response to COVID-19,
see CRS Report R46314, Federal Student Loan Debt Relief in the Context of COVID-19.
84 U.S. Department of Education, Office of Federal Student Aid, “Coronavirus and Forbearance Info for Students,
Borrowers, and Parents,” https://studentaid.gov/announcements-events/coronavirus (accessed June 22, 2020).
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to borrowers of Direct Loans and ED-held FFEL and Perkins Loan program loans through
September 30, 2020, include the following:
 Suspension of al payments due. Suspended payments are to count toward
monthly payments required under any loan forgiveness program (e.g., Public
Service Loan Forgiveness (PSLF)85 and IDR plans86) and loan rehabilitation,87
and to be reported to consumer reporting agencies as if they were regularly
scheduled payments made by the borrower.
 Suspension of interest accrual.
 Suspension of involuntary collection on defaulted loans (e.g., wage garnishment
or offset of federal income tax refunds).
Federal student loans that are not eligible for these benefits include FFEL program loans held by
commercial lenders and guaranty agencies (hereinafter, commercially held FFEL program loans),
Perkins Loan program loans held by IHEs (hereinafter, institutionally held Perkins Loans), and
most PHSA Loans.88
The Heroes Act would effectively extend CARES Act student loan benefits to borrowers of
commercial y held FFEL programs loans, Perkins Loans (including institutional y held Perkins
Loans), and al types of PHSA Loans.89 Such benefits would be made available as of March 13,
2020 (the date of enactment of the CARES Act). The Heroes act would require ED (or the
Secretary of Health and Human Services (HHS) in the case of PHSA Loans to refund to
borrowers any interest that accrued and any payments made on such loans between March 13,
2020, and the date of enactment of the Heroes Act.
In addition, the Heroes Act would extend the time period during which the above-described
benefits would be available for al types of federal student loans. Payments and involuntary
collection would be suspended through September 30, 2021.90 Interest accrual would be

85 T o qualify for PSLF, a borrower must make 120 qualifying monthly payments while employed in a public service
job. Generally, periods of nonpayment do not count toward the 120 qualifying payments. For additional information on
PSLF, see CRS Report R45389, The Public Service Loan Forgiveness Program : Selected Issues.
86 T o qualify for loan forgiveness under one of the IDR plans, an individual must make qualifying monthly payments
for a period of 20 or 25 years, depending on the plan. In general, periods of nonpayment are not included in a
borrower’s repayment period. For additional information, see CRS Report R43571, Federal Student Loan Forgiveness
and Loan Repaym ent Program s.
87 Loan rehabilitation is the process by which a borrower may bring a loan out of default by making nine monthly
payments on a defaulted loan within 20 days of the due date during a period of 10 consecutive months.
88 ED also extended the suspension of interest and collections to defaulted Health Education Assistance Loan (HEAL)
program loans. From 1978 to 1998, T itle VII of PHSA authorized the insurance of HEAL program loans to eligible
health professions graduate students. T he authorization to make new HEAL program loans was terminated on
September 30, 1998, but borrowers remain responsible for repaying them. Administration of the HEAL program was
transferred to ED from HHS on July 1, 2014, pursuant to the Consolidated Appropriations Act , 2014 (P.L. 113-76).
Defaulted HEAL program loans are held by ED. HEAL program loans that are not in default are held by commercial
lenders. U.S. Department of Education, Office of Federal Student Aid, “ Coronavirus and Forbearance Info for
Students, Borrowers, and Parents,” https://studentaid.gov/announcements-events/coronavirus (accessed May 27, 2020).
89 H.R. 6800, §150113.
90 H.R. 6800, §150114.
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suspended through the later of September 30, 2021, or the date that is two months after the
national U5 measure of labor underutilization91 shows initial signs of recovery.92
Because some FFEL and Perkins Loan program loans and PHSA Loans are held by entities other
than ED or HHS, the Heroes Act would require the Secretary of Education or the Secretary of
HHS, as applicable, to compensate holders of such loans for any losses incurred due to required
payment suspension. Losses would be determined by the relevant Secretary. The act would also
require the secretaries to make interest payments on such loans on behalf of borrowers during
periods of interest suspension.
Paying Down Federal Student Loan Debt
The Heroes Act would require the Secretary to cancel or repay (in the case of those loans not held
by ED) up to $10,000 in outstanding balance of Direct Loan, FFEL, and Perkins Loan program
loans for borrowers who are economically distressed.93
The Heroes Act would specify how the benefit would be applied to borrowers with multiple
loans. For example, it would specify that in the case of a borrower whose loans had different
interest rates, the benefit would first be applied toward the loan with the highest interest rate. The
act would also specify that cancel ation/repayment benefits would be excluded from federal
income tax liability.94
Consolidating Federal Student Loans and Loan Forgiveness
Direct Consolidation Loans al ow borrowers with at least one loan borrowed through either the
Direct Loan program or the FFEL program to refinance their eligible federal student loan debt
(including Perkins Loans and PHSA Loans) by borrowing a new loan and using the proceeds to
pay off their existing federal student loan obligations. Upon a borrower obtaining a Direct
Consolidation Loan, a new repayment period begins, which may be for a longer term than applied
to the original loans. Qualifying payments made on the component loans under an IDR plan or for
purposes of PSLF are not considered qualifying payments on the new Direct Consolidation Loan
for purposes of obtaining forgiveness benefits under an IDR plan or PSLF.95
The Heroes Act would specify that for loans consolidated during the period for which the interest
suspension benefit described above would be in effect, payments made on component loans prior

91 T he U5 measure of labor underutilization is an alternative measure of unemployment calculated by the Bureau of
Labor Statistics that measures “ total unemployed, plus discouraged workers, plus all other marginally attached workers,
as a percent of the civilian labor force plus all marginally attached workers.” U.S Bureau of Labor Statistics,
“Alternative Measures of Labor Underutilization for States, Second Quarter of 2019 through First Quarter of 2020
Averages,” https://www.bls.gov/lau/stalt.htm (accessed May 26, 2020).
92 H.R. 6800, §150115. T he Heroes Act would establish that the national U5 measure is showing “initial signs of
recovery” when the following conditions hold: (1) the U5 three-month average has been below its highest three-month
average since March 2020 for three consecutive months (i.e., its peak value); (2) for each of those three consecutive
months, the three-month average U5 measure is no greater than the three-month value for the period ending February
2020 (i.e., the starting value) plus two-thirds of the percentage point difference between the peak value and the starting
value; and (3) the monthly U5 measure has decreased for each month during the two most recent consecutive months
for which data from BLS are available.
93 H.R. 6800, §150117.
94 H.R. 6800, §150117.
95 Effectively, any progress made toward IDR forgiveness or PSLF on the component loans paid off by the
Consolidation Loan is eliminated. Upon consolidation, a borrower of a new Direct Consolidation Loan would be
required to restart working toward PSLF and IDR forgiveness benefits.
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to consolidation into a Direct Consolidation Loan would count toward the required number of
payments under an IDR plan or PSLF for the new Direct Consolidation Loan.96 Such payments
would qualify irrespective of whether al of the component loans are eligible for an IDR plan or
PSLF, or whether for purposes of PSLF, the payments on al component loans were made
according to a PSLF qualifying repayment plan. The number of payments made on the
component loans that would count toward IDR or PSLF forgiveness benefits would be
determined by multiplying the weighted factor of each component loan by the number of
payments made on such loan and applying the result to the new Direct Consolidation Loan.
The Heroes Act would also specify that health care practitioners who provide full-time medical
services at nonprofit or public hospitals or other healthcare facilities but who are prohibited by
state law from being directly employed by such entities may nonetheless qualify for PSLF, so
long as they meet al other program criteria.97 Unlike other Heroes Act student loan provisions,
this provision appears to be a permanent change to the PSLF program.
Addressing Borrower Defense to Repayment
The HEA and accompanying regulations establish a route through which Direct Loan borrowers,
and in more limited circumstances FFEL and Perkins Loan borrowers, may seek cancel ation of
their loans in instances where an IHE made misleading representations regarding the educational
services it provided. This is known as borrower defense to repayment (BDR). In recent years,
thousands of BDR applications have been filed by borrowers; however, many have not been
processed by ED. In other instances, BDR applications have been processed but borrowers only
had a portion of their student loan debt cancel ed.98
The Heroes Act would require ED to cancel the full balance of, and return payments previously
made on, a borrower’s qualifying outstanding loans within 45 days of the act’s enactment for
eligible borrowers.99 Eligible borrowers would be defined as individuals who borrowed a Direct
Loan or FFEL program loan to finance the cost of enrollment at an IHE that, according to ED
findings made on or before the act’s date of enactment, made a false or misleading representation
of “job placements rates” of such IHE, with respect to “guaranteed employment,” or of
“transferability of credits” of such IHE.100 Individuals who previously received partial BDR relief
would be included as eligible borrowers.
The Heroes Act would also require ED to, not later than 180 days after the date of enactment,
adjudicate BDR claims from state attorneys general who, on or before the date of enactment,
submitted BDR claims on behalf of borrowers and such borrowers did not receive full BDR
relief. ED would be required to, within 45 days of adjudication, cancel the full balance of and

96 H.R. 6800, §150120.
97 T o qualify for PSLF, an individual must be directly hired and paid by a government or nonprofit organization. Some
state laws prohibit physicians from being employed directly by nonprofit hospitals; although, physicians may still
provide healthcare services at such hospitals. For additional information, see Physician News Network, “ California
Groups Urge Education Department to Fix Public Service Loan Forgiveness,” June 6, 2016 .
98 For additional information, see Danielle Douglas-Gabriel, “DeVos reaches settlement over stalled student debt relief
claims,” Washington Post, April 10, 2020.
99 H.R. 6800, §150122(b) and (c).
100 Individuals who would qualify for debt relief pursuant to an IHE making a false or misleading representation with
respect to guaranteed employment or transferability of credits must also have asserted such in a BDR application to
ED.
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return payments previously made on qualifying loans for borrowers whose BDR claims are
successfully adjudicated.101
In addition, ED would be required to initiate proceedings to collect loan amounts cancel ed from
the relevant IHE.102 The act would also specify that amounts of BDR relief would be excluded
from federal income tax liability.103
Automatic Closed School Loan Discharge
In general, borrowers of HEA Title IV loans may be eligible to have the full balance of their
outstanding Title IV loans discharged if they (or the student on whose behalf a parent borrowed in
the case of Parent PLUS Loans) are unable to complete the program in which they enrolled due to
the closure of the school.104 Typical y, to qualify for a closed school loan discharge a student must
have been enrolled in an IHE when it closed or must have withdrawn from the IHE within 120
days prior to its closure. In addition, the student must have been unable to complete his or her
program of study at the closed school or in a comparable program at another IHE.105 Borrowers
may have their loans discharged in one of two ways: (1) by applying for a closed school loan
discharge or (2) by having their loans automatical y discharged by the Secretary, if the Secretary
determines that, with respect to an IHE that closed on or after November 1, 2013, the borrower
did not subsequently reenroll in any Title IV eligible institution within three years after the school
closed.106
Effective July 1, 2020, regulations provide that a borrower may be eligible for a closed school
loan discharge if he or she (or the student on whose behalf a parent borrowed in the case of Parent
PLUS Loans) were enrolled in an IHE when it closed or withdrew from the IHE within 180 days
prior to its closure.107 The new regulations retain the eligibility requirement that a student must
have been unable to complete his or her program of study at the closed school or in a comparable
program at another IHE. The automatic closed school loan discharge procedures would only be
available with respect to IHEs that closed on or after November 1, 2013, and before July 1, 2020.
The Heroes Act would require ED to automatical y discharge a borrower’s Title IV student loans
if the borrower108 (1) was enrol ed at an IHE while such IHE was participating in a COVID-19
Provisional Program Participation Agreement (see the “COVID-19 Provisional Program
Participation Agreements and Funding” section); (2) was unable to complete the period of
enrollment due to the IHE’s closure or withdrew from the IHE, in general, within 120 days prior
to the IHE’s closure; and (3) did not subsequently reenroll in any Title IV eligible institution
within three years after the school closed.109

101 H.R. 6800, §150122(e).
102 H.R. 6800, §150122(f).
103 H.R. 6800, §150122(g).
104 HEA, §§437(c)(1), 455(a)(1), and 464(g).
105 34 C.F.R. §§674.33(g)(4), 682.402(d)(3), and 685.214(c)(1).
106 34 C.F.R. §§674.33(g)(3)(A)(ii), 682.402(d)(8)(ii), and 685.214(c)(2)(ii).
107 U.S. Department of Education, “Student Assistance General Provisions, Federal Family Education Loan Program,
and William D. Ford Federal Direct Loan Program,” 84 Federal Register 49788, September 23, 2019.
108 T he Heroes Act does not appear to address whether the borrower of a Parent PLUS Loan would be eligible for
closed school discharged if the student on whose behalf the loan was borrowed is unable to complete his or her period
of enrollment.
109 H.R. 6800, §150112.
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HEA Title IV Administrative Provisions
In addition to amending some of the CARES Act provisions and federal student loan relief
provisions, the Heroes Act would make temporary and permanent modifications pertaining to the
administration of HEA Title IV programs in response to the COVID-19 emergency. The
provisions would modify HEA Title IV aid need analysis procedures, redefine distance education,
respond to potential IHE fiscal instability, and require additional ED reporting of actions taken in
response to the CARES Act and the Heroes Act.
Modifications to FAFSA and Need Analysis Procedures
Some HEA Title IV aid is based on student financial need. A key component of need is the ability
of a student’s family to pay for higher education. The HEA establishes a series of formulas that
calculate a student’s expected family contribution (EFC) on the basis of the financial and personal
characteristics of the student and applicable family members (typical y, parents or a spouse).110
Information necessary to calculate the EFC is collected thorough the Free Application for Federal
Student Aid (FAFSA) and shared with applicable state agencies and IHEs.
Emergency Financial Aid Grants Excluded From Need Analysis
The CARES Act established emergency financial aid grants for postsecondary students to cover
unexpected expenses related to disruptions of campus operations due to the COVID-19 pandemic
under HEERF and FSEOG (see the “CARES Act Amendments and Related Provisions” section).
The CARES Act did not explicitly address how these grants would be treated in calculating
students’ EFCs in subsequent award years.
The Heroes Act would explicitly exclude emergency financial aid grants from taxation and would
also exclude the grants from being considered as untaxed income when calculating a student’s
EFC.111 This provision would eliminate the possibility that a student’s EFC could increase (and
corresponding eligibility for need-based aid could decrease) on the basis of receiving an
emergency grant. The act defines emergency financial aid grants as student grants made available
under FSEOG and HEERF as authorized by the CARES Act, as wel as “any other emergency
grant aid to a student from a federal agency, a state, an Indian tribe, an institution of higher
education, or a scholarship-granting organization … for the purpose of providing financial relief
to students enrolled at institutions of higher education in response to a qualifying emergency.”
Facilitating Access to Financial Aid for Recently Unemployed Students112
A student’s EFC typical y considers income from the second preceding tax year (e.g., when
completing the FAFSA for the 2020-2021 award year, applicants provided information from tax
year 2018). The HEA al ows a school’s financial aid administrators (FAAs) to exercise
professional judgement (PJ) on a case-by-case basis to adjust income and other EFC factors under

110 For a more detailed discussion of the EFC formula, see CRS Report R44503, Federal Student Aid: Need Analysis
Form ulas and Expected Fam ily Contribution.
111 H.R. 6800, §20232 (taxation) and §150108 (need analysis).
112 H.R. 6800, §150109.
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“special circumstances,” such as when the financial circumstances of a student’s family
significantly change between the tax year reported on the FAFSA and enrollment.113
The Heroes Act would codify components of guidance that ED original y issued during the
economic downturn in 2009 that encouraged schools to use PJ for students who were receiving
unemployment benefits.114 The act would codify the component of the guidance that advised
schools on how to reconsider the applications and potential y increase aid eligibility for students
who documented receipt of unemployment benefits.115 The act would codify the portion of
guidance that would further communicated an understanding that ED expected the usage of PJ to
increase due to the current economic conditions; ED would make corresponding adjustments to
its risk-based model for program reviews (i.e., schools that utilized PJ would not be more likely
to be audited); and documentation of unemployment benefits would be considered adequate
documentation of adjustments to the student-recipient’s income.116
The Heroes Act would direct ED, in consultation with the Secretary of Labor, to carry out
activities to inform applicants for and recipients of unemployment benefits of the availability of
federal student aid through the HEA. The act would further establish various avenues of outreach
to FAFSA filers who may qualify for means-tested benefits beyond student aid.
Definition of Distance Education
To participate in the HEA Title IV federal student aid programs, educational programs offered via
the internet and other specified technologies must meet the HEA-specified distance education
requirements. In general, distance education must support “regular and substantive interaction
between students and the instructor, synchronously or asynchronously.”117
In April 2020, in an effort to clarify the HEA distance education requirements and to address new
adaptations of technology in higher education, ED published a Notice of Proposed Rulemaking
(NPRM) that would add specificity to the meaning of distance education. Among other
provisions, the NPRM would define regular and substantive interaction.118 If finalized,119 the
proposed distance education regulations would likely not go into effect until at least July 1, 2021.

113 HEA, §479A.
114 T he act specifically refers to GEN-09-05, which was issued in May 2009; see https://ifap.ed.gov/dear-colleague-
letters/05-08-2009-gen-09-05-subject-update-use-professional-judgment-financial-aid. It is unclear when the guidance
was withdrawn, though in June 2020 there were media reports that ED had communicated that it was no longer in
effect. For example, see NPR, “ Education Dept. Is Making It Harder For Colleges T o Boost Student Aid During Crisis,
June 19, 2020, https://www.npr.org/2020/06/19/879633830/education-dept-is-making-it-harder-for-colleges-to-boost-
student-aid-during-cris.
115 Specifically, GEN-09-05 advises FAAs that they may use evidence of unemployment benefits to establish that
“income earned from work of that student is zero” and that “unemployment benefits can also be considered zero” when
calculating the student’s total income.
116 In July 2020 (subsequent to the passage of the Heroes Act), ED issued guidance specifying “f or the 2019-20 and
2020-21 award years, the Department will make appropriate adjustments to its risk -based model and will not negatively
view increased use of professional judgment or use it as a selection criterion for a program compliance review.” See
U.S. Department of Education, electronic announcements, July 9, 2020, https://ifap.ed.gov/electronic-announcements/
070920AltAcceptDocCompleteIRSVNFW2ProfJudgmentCOVID. T he announcement did not offer explicit guidance
related to students receiving unemployment benefits.
117 HEA, §103(7)(a)(ii).
118 U.S. Department of Education, “Distance Education and Innovation,” 85 Federal Register 18638, April 2, 2020.
119 HEA, §482(c).
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The Heroes Act would define distance education, for HEA Title IV purposes, in the same way as
the NPRM would.120 The definition would be effective for any semester (or equivalent) that
begins on or after August 15, 2020, and would cease to be effective on June 30, 2021.
Incorporating the NPRM’s definition of distance education may be particularly relevant during
the COVID-19 pandemic, because many IHEs have, at least temporarily, transitioned to distance
education in response to it.121
COVID-19 Provisional Program Participation Agreements and
Funding
To participate in the HEA Title IV student aid programs, an IHE must demonstrate financial
responsibility. To do so, private nonprofit and proprietary IHEs must, among other requirements,
meet financial ratios (known as composite scores) established by ED.122 If an IHE does not meet
composite score standards,123 ED may stil consider it financial y responsible if it qualifies under
an alternative standard.124 These alternative standards include submitting an irrevocable letter of
credit125 to ED that is equal to a percentage of the Title IV funds that the IHE received during its
most recently completed fiscal year. The alternative standards may also include meeting specific
monitoring requirements and participating in the Title IV programs under a provisional program
participation agreement (PPPA).126
The Heroes Act would permit a subset of IHEs not meeting composite score standards to continue
to participate in the Title IV student aid programs under a COVID-19 PPPA without being
required to post a letter of credit.127 Among other criteria,128 an IHE would be eligible to
participate under a COVID-19 PPPA if its liquidity level is less than or equal to 180 days on the
date the IHE applies to participate under a COVID-19 PPPA. The liquidity level would be defined
as the number of days an IHE can operate based on its available resources, as determined in
accordance with specified standards.
IHEs would have to apply for a COVID-19 PPPA on or before December 31, 2020. The
application would address, among other items, an IHE’s submission of a record-management

120 H.R. 6800, §150111.
121 Chronicle staff, “Here’s a List of Colleges’ Plans for Reopening in the Fall,” Chronicle of Higher Education, April
23, 2020.
122 ED calculates an IHE’s composite score based on its equity, primary, and net income ratios. 34 C.F.R. §668.172.
123 Composite scores range from -1.0 to 3.0. IHEs with composite scores of 1.5 to 3.0 are considered financially
responsible. IHEs with composite scores of 1.0 to 1.4 are considered in the “Zone” and are considered financially
responsible, but additional oversight is required. IHEs with composite scores of -1.0 to 0.9 are not considered
financially responsible.
124 HEA, §498(c)(3).
125 A letter of credit is a “document granted by banks stating that the bank will guarantee amounts that its customer
incurred.” U.S. Department of Education, Federal Student Aid Handbook, 2019-2020, Appendix A, p. 48.
126 A program participation agreement is a document in which the IHE agrees to comply with the laws, regulations, and
policies applicable to the T itle IV programs. For additional informat ion on provisional PPAs and alternative financial
responsibility standards, see U.S. Department of Education, Federal Student Aid Handbook, 2019 -2020, vol. 2, pp. 96-
99.
127 H.R. 6800, §150112.
128 An IHE would need to meet the following criteria to participate in T itle IV under a COVID-19 PPPA: (1) it either
has a composite score of less than 1.0 for an institutional fiscal year ending in 2019 or it has or anticipates having a
composite score of less than 1.0 for an institutional fiscal year ending in 2020, and (2) it must have offered on -campus
classes during award year 2018-2019.
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plan129 and a teach-out plan130 to ED. In addition, an IHE with a liquidity level of equal to or less
than 90 days would be required to submit a teach-out agreement131 to ED, its accrediting agency,
and its state authorization agency (if applicable). Upon approval to participate under a COVID-19
PPPA, an IHE would be required to continue to meet a variety of existing Title IV participation
requirements and various reporting requirements.
In general, COVID-19 PPPAs would begin on the date on which the agreement was entered into
and end on the last day of the first full award year following such date. A COVID-19 PPPA could
be renewed or extended annual y, but no COVID-19 PPPA could be in effect beyond June 30,
2024. ED would be required to terminate a COVID-19 PPPA if an IHE’s composite score met
specific benchmarks that indicate improved financial responsibility.132
The Heroes Act would authorize discretionary appropriations of $300 mil ion for ED to award
grants to IHEs that participate in the Title IV programs under a COVID-19 PPPA to carry out the
requirements of the COVID-19 PPPA and provide for the increased economic stability of such
IHEs.133
Carl D. Perkins Career and Technical Education Act
of 2006 and Adult Education and Family Literacy
Act: Additional Flexibilities
The Carl D. Perkins Career and Technical Education Act of 2006 (Perkins; P.L. 109-270, as
amended), is the primary federal law aimed at developing and supporting career and technical
education (CTE) programs at the secondary and postsecondary educational levels.134 Perkins
requires local CTE providers to return unexpended grant funds at the end of the academic year
(AY) to the state for redistribution.135 Among many other uses of funds, Perkins al ows local CTE
providers to pool funds to provide professional development.136 Professional development
activities offered with pooled funds or an individual CTE provider’s funds must meet several

129 A record-management plan would include a plan for the custody and disposition of teach -out plan and teach-out
agreement records; student records, including transcripts, billing, and financial aid records; an estimate of the costs
necessary to carry out the record-management plan; and a financial plan to provide funding for such costs.
130 A teach-out plan would be defined as a written plan developed by the IHE that “provides for the equitable treatment
of students” if the IHE “ceases to operate or plans to cease operations before all enrolled students have completed their
program of study.”
131 A teach-out agreement would be defined as a written agreement between an IHE and one or more other qualifying
IHEs (i.e., teach-out institutions) that provides for the equitable treatment of students and “ a reasonable opportunity for
students to complete their program of study if such institution … ceases to operate or plans to cease operations before
all such enrolled students have completed their program of study.” T he act would require teach -out agreements to
include a variety of elements, such as a list of enrolled students; student financial information (e.g., amount of refunds
due to each student); and in the case of an IHE’s closure, a plan to notify students of, the process for obtaining a closed
school loan discharge.
132 Specifically, ED would be required to terminate the COVID-19 PPPA if the IHE’s composite score was equal to or
greater than 1.0.
133 H.R. 6800, §150112.
134 For more information about Perkins, see CRS Report R45446, Reauthorization of the Perkins Act in the 115th
Congress: The Strengthening Career and Technical Education for the 21st Century Act .
135 Perkins, §133(b).
136 Perkins, §135(c).
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requirements, including being sustained (not stand-alone, one-day, or short-term workshops),
intensive, collaborative, job-embedded, data-driven, and classroom-focused.137
With respect to Perkins, the Heroes Act would give local CTE providers greater flexibility in the
use of funds.138 States would be authorized to al ow local CTE providers that were unable to
expend AY2019-2020 grant funds in that year due to the COVID-19 emergency to retain such
funds to carry out AY2019-2020 activities in AY2020-2021. Under the act, local CTE providers
would be al owed to pool funds with each other to support transitions from secondary education
to postsecondary education or employment for CTE participants whose academic year was
interrupted by the COVID-19 emergency. In addition, local CTE providers could engage in
professional development activities that are not sustained, intensive, collaborative, job-embedded,
data-driven, and classroom-focused.
The Adult Education and Family Literacy Act (AEFLA) is the primary federal legislation that
supports basic education (e.g., literacy, numeracy, and English language training) for out-of-
school adults.139 The legislation has a 2% reservation for National Leadership Activities, and the
remainder of its funding is al otted to state grants that facilitate basic educational activities. State
grants include discrete al ocations for administrative expenses, state leadership activities, and
subgrants to local providers.
With respect to AEFLA, the Heroes Act would al ow state grantees to use funding made available
for state leadership activities and administrative costs for expenses “related to transitions to
online services delivery of adult education and literacy activities.”140 The act would further direct
the Secretary, as part of the National Leadership Activities, to identify and disseminate to state
agencies strategies and virtual proctoring tools to assess adult education participants and measure
their progress in compliance with the relevant performance standards.
Section 421(b) of the General Education Provisions Act (GEPA) al ows funds appropriated for an
applicable program (e.g., Perkins, AEFLA) that are not obligated and expended by the recipient
before the end of the fiscal year to remain available for obligation and expenditure for one
additional fiscal year. Section 3511 of the CARES Act authorized the Secretary to grant waivers
of GEPA Section 421(b) if requested by state educational agencies (SEAs) to extend the period of
availability of state formula grant funds authorized by Perkins and AEFLA. In response, ED
extended the period of availability of FY2018 funds until September 30, 2021, for several Perkins
and AEFLA grants for which the SEA is the eligible agency. ED noted, however, that the CARES
Act did not give it authority to grant such Perkins and AEFLA waivers if the SEA were not the
recipient of the funds.141 The Heroes Act would al ow the Secretary, upon request of a state or
Indian tribe, to waive GEPA Section 421(b) to extend the period of availability of formula grants
under Perkins and AEFLA for periods before AY2020–2021.142

137 Perkins, §3(40).
138 H.R. 6800, §150202.
139 For more information about AEFLA, see CRS Report R43789, Adult Education and Family Literacy Act: Major
Statutory Provisions.
140 H.R. 6800, §150203.
141 U.S. Department of Education, Office of Career, T echnical, and Adult Education, “Notice of Waivers Granted
Under Section 3511 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act,” 85 Federal Register
29440-29441, May 15, 2020.
142 H.R. 6800, §150204.
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Appendix. Estimated State Fiscal Stabilization Fund
Grant Allocations143
The Heroes Act would provide $90.0 bil ion for the State Fiscal Stabilization Fund (SFSF). From
the overal appropriation, the following reservations would be made:
 0.5% for the outlying areas;144
 0.5% for the Bureau of Indian Education (BIE); and
 $30,000,000 for administration and oversight by the U.S. Department of
Education (ED).
The remaining funds would be awarded to states based on two formula factors: (1) 61% would be
awarded based on each state’s share of individuals ages 5 through 24 relative to the total number
of individuals ages 5 through 24 in al states; and (2) 39% would be awarded based on each
state’s share of children counted under Section 1124(c) of the Elementary and Secondary
Education Act (ESEA) relative to the total number of children counted under Section 1124(c) for
al states. There would be no minimum state grant amount. Population estimates for the first
factor were available from the U.S. Census Bureau for 2018.145 Data for the second factor are
based on formula child counts used to determine Title I-A grants under the ESEA. These counts
for the 50 states, the District of Columbia, and Puerto Rico consist of children who are ages 5
through 17 (1) living in families in poverty, according to estimates from the U.S. Census Bureau’s
Smal Area Income and Poverty Estimates (SAIPE) program; (2) in institutions for neglected or
delinquent children or in foster homes; and (3) in families receiving Temporary Assistance for
Needy Families (TANF) payments, but with incomes above the poverty income level for a family
of four.146
Each state would then be required to al ocate 65% of the funds received to local educational
agencies (LEAs) and 30% of the funds to public institutions of higher education (IHEs). The
remaining 5% would be used for statewide elementary, secondary, and postsecondary activities.
Table A-1 presents estimated state grants for the SFSF program using 2018 Census Bureau
population estimates, preliminary FY2020 ESEA Title I-A formula child counts, and an
appropriation of $90 bil ion. Based on these estimated grant amounts, the table also details the
estimated amount of funding that would be provided to LEAs and public IHEs and would be
available for statewide activities in each state.

143 Emma Nyhof, CRS Research Assistant, contributed to this section of the report.
144 T he Secretary of Education would be required to allocate up to 0.5% of the total appropriation to the outlying areas.
For the purposes of this memorandum, CRS assumed that the full 0.5% would be allocated to the outlying areas.
145 Data for the 50 states and the District of Columbia were available from the U.S. Census Bureau, Annual Estimates
of the Resident Population by Single Year of Age and Sex for the United States, States, and Puerto Rico
Commonwealth: April 1, 2010 to July 1, 2018, https://www.census.gov/data/tables/time-series/demo/popest/2010s-
state-detail.html. These were the data that ED used to allocate grants under the Education Stabilization Fund authorized
by the Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136). (Conversation between CRS and
ED staff, April 1, 2020.)
146 T he analysis relies on unpublished preliminary FY2020 T itle I-A data that were provided to CRS by ED on
February 21, 2020.
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Table A-1. Estimated State Grants and the Allocation of Funds Within Each State
for the State Fiscal Stabilization Fund Program at an
Appropriations Level of $90 Billion
(Dol ars in thousands)

Estimated Grants to States
Estimated Within-State Allocations of Funds
Estimated
Estimated
Amount of
Amount of
Funding
Estimated
Percentage
Funding
Provided to
Amount of
Share of
Provided to
Public
Funding
Estimated
Total Funds
Local
Institutions
Available for
Grant
Available for
Educational
of Higher
Statewide
State
Amount
State Grants
Agencies
Education
Activities
Alabama
$1,469,335
1.65%
$955,068
$440,800
$73,467
Alaska
$196,523
0.22%
$127,740
$58,957
$9,826
Arizona
$2,084,527
2.34%
$1,354,943
$625,358
$104,226
Arkansas
$922,533
1.04%
$599,647
$276,760
$46,127
California
$10,716,134
12.03%
$6,965,487
$3,214,840
$535,807
Colorado
$1,332,224
1.50%
$865,945
$399,667
$66,611
Connecticut
$843,494
0.95%
$548,271
$253,048
$42,175
Delaware
$238,910
0.27%
$155,292
$71,673
$11,946
District of Columbia
$174,878
0.20%
$113,671
$52,463
$8,744
Florida
$5,231,568
5.87%
$3,400,519
$1,569,471
$261,578
Georgia
$3,183,894
3.57%
$2,069,531
$955,168
$159,195
Hawai
$302,714
0.34%
$196,764
$90,814
$15,136
Idaho
$473,935
0.53%
$308,058
$142,180
$23,697
Il inois
$3,276,432
3.68%
$2,129,681
$982,930
$163,822
Indiana
$1,858,558
2.09%
$1,208,062
$557,567
$92,928
Iowa
$793,302
0.89%
$515,646
$237,991
$39,665
Kansas
$793,924
0.89%
$516,051
$238,177
$39,696
Kentucky
$1,318,189
1.48%
$856,823
$395,457
$65,909
Louisiana
$1,510,327
1.70%
$981,713
$453,098
$75,516
Maine
$280,399
0.31%
$182,259
$84,120
$14,020
Maryland
$1,382,192
1.55%
$898,425
$414,657
$69,110
Massachusetts
$1,539,977
1.73%
$1,000,985
$461,993
$76,999
Michigan
$2,696,937
3.03%
$1,753,009
$809,081
$134,847
Minnesota
$1,315,070
1.48%
$854,796
$394,521
$65,754
Mississippi
$1,040,636
1.17%
$676,414
$312,191
$52,032
Missouri
$1,648,077
1.85%
$1,071,250
$494,423
$82,404
Montana
$264,697
0.30%
$172,053
$79,409
$13,235
Nebraska
$495,052
0.56%
$321,784
$148,516
$24,753
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Heroes Act: Education-Related Provisions

Estimated Grants to States
Estimated Within-State Allocations of Funds
Estimated
Estimated
Amount of
Amount of
Funding
Estimated
Percentage
Funding
Provided to
Amount of
Share of
Provided to
Public
Funding
Estimated
Total Funds
Local
Institutions
Available for
Grant
Available for
Educational
of Higher
Statewide
State
Amount
State Grants
Agencies
Education
Activities
Nevada
$798,335
0.90%
$518,918
$239,501
$39,917
New Hampshire
$269,873
0.30%
$175,417
$80,962
$13,494
New Jersey
$2,082,842
2.34%
$1,353,847
$624,852
$104,142
New Mexico
$669,240
0.75%
$435,006
$200,772
$33,462
New York
$4,955,150
5.56%
$3,220,847
$1,486,545
$247,757
North Carolina
$2,882,586
3.24%
$1,873,681
$864,776
$144,129
North Dakota
$179,938
0.20%
$116,960
$53,981
$8,997
Ohio
$3,163,097
3.55%
$2,056,013
$948,929
$158,155
Oklahoma
$1,202,118
1.35%
$781,377
$360,635
$60,106
Oregon
$982,304
1.10%
$638,498
$294,691
$49,115
Pennsylvania
$3,152,091
3.54%
$2,048,859
$945,627
$157,605
Puerto Rico
$1,426,232
1.60%
$927,051
$427,870
$71,312
Rhode Island
$262,829
0.30%
$170,839
$78,849
$13,141
South Carolina
$1,458,908
1.64%
$948,290
$437,672
$72,945
South Dakota
$239,875
0.27%
$155,919
$71,963
$11,994
Tennessee
$1,914,689
2.15%
$1,244,548
$574,407
$95,734
Texas
$9,242,958
10.38%
$6,007,922
$2,772,887
$462,148
Utah
$885,549
0.99%
$575,607
$265,665
$44,277
Vermont
$136,029
0.15%
$88,419
$40,809
$6,801
Virginia
$2,020,418
2.27%
$1,313,272
$606,125
$101,021
Washington
$1,718,148
1.93%
$1,116,796
$515,444
$85,907
West Virginia
$492,066
0.55%
$319,843
$147,620
$24,603
Wisconsin
$1,408,079
1.58%
$915,252
$422,424
$70,404
Wyoming
$142,207
0.16%
$92,435
$42,662
$7,110
Subtotal for 50
states, the District
of Columbia, and
Puerto Rico
$89,070,000
100.00%
$57,895,500
$26,721,000
$4,453,500
Outlying Areas
$450,000
–
–
–
–
Bureau of Indian
Education (BIE)
$450,000
–
–
–
–
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Heroes Act: Education-Related Provisions

Estimated Grants to States
Estimated Within-State Allocations of Funds
Estimated
Estimated
Amount of
Amount of
Funding
Estimated
Percentage
Funding
Provided to
Amount of
Share of
Provided to
Public
Funding
Estimated
Total Funds
Local
Institutions
Available for
Grant
Available for
Educational
of Higher
Statewide
State
Amount
State Grants
Agencies
Education
Activities
Administration and
oversight
$30,000
–
–
–
–
Total appropriation
$90,000,000
–
–
–
–
Source: Table prepared by CRS, based on analysis of the Heroes Act (H.R. 6800); unpublished preliminary
FY2020 ESEA Title I-A formula child count data provided by the U.S. Department of Education, Budget Service;
and 2018 population data from the U.S. Census Bureau, Annual Estimates of the Resident Population by Single Year of
Age and Sex for the United States, States, and Puerto Rico Commonwealth: April 1, 2010 to July 1, 2018,
https://www.census.gov/data/tables/time-series/demo/popest/2010s-state-detail.html.
Notes: Details may not add to totals due to rounding. Percentages were calculated based on unrounded
numbers. CRS assumed that the Secretary of Education would al ocate the ful 0.5% to the outlying areas that
would be permitted under the act. CRS also assumed that the Secretary would reserve the ful $30 mil ion that
would be available under the act for administration and oversight by ED.

Notice: These are estimated grants only. These estimates are provided solely to assist in
comparisons of the relative impact of alternative formulas and funding levels in the legislative
process. They are not intended to predict specific amounts states will receive. In addition to other
limitations, data needed to calculate final grants may not yet be available.

Author Information

Cassandria Dortch, Coordinator
Joselynn H. Fountain
Specialist in Education Policy
Analyst in Education Policy

Rebecca R. Skinner
Kyrie E. Dragoo
Specialist in Education Policy
Analyst in Education Policy

Kyle D. Shohfi
Benjamin Collins
Analyst in Education Policy
Analyst in Labor Policy

Alexandra Hegji

Analyst in Social Policy

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Heroes Act: Education-Related Provisions

Disclaimer
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under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
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