loan programs

U.S. DOE Guidelines for the Use of COVID Relief Funds

On March 19, the U.S. Department of Education provided new guidance aimed at resolving questions that have been circulating since last spring regarding the appropriate use of COVID relief funds by higher education institutions. Click here to read the new HEERF guide.

Since the passage of the CARES Act, in March 2020, with its inclusion of support for colleges, universities and post-secondary students (Higher Education Emergency Relief Fund or “HEERF I”), lingering questions about the specific types of expenses that can be offset by COVID relief funds. Specifically, advice was sought on how to define reimbursable “loss of income” under the Act. Additional questions have arisen regarding the authorized timing of reimbursable expenses, particularly since the adoption in December of the Supplemental Relief Funding (“HEERF II”). The wording of HEERF II states that expenses are only deemed reimbursable if “incurred on or after December 27, 2020,” which appears to exclude losses incurred since the start of the pandemic. A third round of COVID Relief Funding for Institutions of Higher Education (“HEERF III”) was included in the U.S. bailout, signed into law on March 11, 2021.

According to the new guidelines provided (click here to see the relief fund FAQ), the category of refundable lost revenue is further defined, to include tuition, fees, room and board, lost registrations, canceled events, dining and dorm expenses, bookstore revenue, parking fees, etc. The guidance further clarifies the period during which reimbursable expenses may have been incurred, since March 13, 2020, the date the pandemic-related national emergency was declared. Click here to view the HEERF Interpretation Notice.

Department of Education guidelines apply to funds issued under each of the three relief laws, HEERF I, HEERF II and HEERF III. Click here for the HEERF COVID-19 Reference Page.

© Steptoe & Johnson LLC. All rights reserved.National Law Review, Volume XI, Number 82