New Guidance Reverses Restrictions on Emergency Financial Aid
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By Mark Kantrowitz

May 22, 2020

New guidance issued by the U.S. Department of Education late on Thursday, May 21, 2020, reverses previous guidance that limited eligibility for emergency financial aid grants to students from the CARES Act.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) established a Higher Education Emergency Relief Fund (HEERF), which includes about $6 billion for emergency financial aid grants to students.

The U.S. Department of Education originally issued guidance on April 21, 2020 that limits the emergency financial aid grants to students who filed a Free Application for Federal Student Aid (FAFSA) or who could have filed a FAFSA.

Specifically, question 9 of a FAQ about eligibility for the emergency financial aid grants said:

Only students who are or could be eligible to participate in programs under Section 484 in Title IV of the Higher Education Act of 1965, as amended (HEA), may receive emergency financial aid grants. If a student has filed a Free Application for Federal Student Aid (FAFSA), then the student has demonstrated eligibility to participate in programs under Section 484 the HEA. Students who have not filed a FAFSA but who are eligible to file a FAFSA also may receive emergency financial aid grants. The criteria to participate in programs under Section 484 of the HEA include but are not limited to the following: U.S. citizenship or eligible noncitizen; a valid Social Security number; registration with Selective Service (if the student is male); and a high school diploma, GED, or completion of high school in an approved homeschool setting.

This guidance precludes providing emergency financial aid grants to international students and undocumented students (including DACA students), as well as many students who are U.S. citizens and permanent residents, such as those who have less than a 2.0 GPA, disabled students and veterans.

The California Community College System filed a lawsuit to block the guidance, arguing that the guidance was arbitrary and capricious and lacks a legal basis in the CARES Act.  This was followed by a lawsuit filed by the Washington state attorney general.

The CARES Act indicates that the emergency financial aid grants should be provided “to students for expenses related to the disruption of campus operations due to coronavirus (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care, and child care).” The CARES Act does not include any restrictions on eligibility for the grants.

After all, the coronavirus does not discriminate based on citizenship or GPA.

The April 21, 2020 guidance was also inconsistent with previous guidance issued by the U.S. Department of Education. For example, guidance issued on April 3, 2020 indicates that the emergency financial aid grants to students are not considered as estimated financial assistance and therefore do not affect eligibility for federal student aid. An April 9, 2020 letter from the U.S. Department of Education encouraged, but did not require, colleges to “prioritize your students with the greatest need.”

The U.S. Department of Education updated its statement concerning the Higher Education Emergency Relief Fund on May 21, 2020 to indicate that it would not enforce its previous guidance, specifically referencing question 9 of the FAQ concerning eligibility for the emergency financial aid grants to students. The U.S. Department of Education said, “The Department will not initiate any enforcement action based solely on these statements because they lack the force and effect of law.”

This is an unprecedented assertion concerning the applicability of government guidance. No prior administration has issued a similar statement. Guidance provides the U.S. Department of Education’s interpretation of statutory and regulatory requirements. It indicates how the U.S. Department of Education will implement the law and regulations. Colleges and universities always aim to act in compliance with guidance. But now, the U.S. Department of Education is effectively saying that its guidance is meaningless and unenforceable. That’s quite remarkable.

Nevertheless, the U.S. Department of Education is not admitting that its previous guidance was wrong. They even went so far as to reiterate their previous guidance concerning eligibility for emergency financial aid grants to students. They just won’t enforce that guidance.

The U.S. Department of Education also says that the guidance “does not apply to the use of HEERF institutional allocations to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus.”

Note that any requirements established in the law and regulations still apply.

The updated U.S. Department of Education guidance refers to 8 USC 1611, which was added by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193), as justification for the exclusion of international students, undocumented students and DACA students from eligibility for the emergency financial aid grants to students. This law limits eligibility for Federal public benefits. The U.S. Department of Education states that the terms of this law are “legally binding.” But, this law provides exceptions for emergency disaster relief and for programs that are necessary for the protection of life or safety.

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