Overview of Higher Education Emergency Relief Fund II

In December 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA) legislation passed, which created the Higher Education Emergency Relief Fund II (HEERF II). While similar to the first round of Higher Education Emergency Relief Fund (HEERF) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, there are some differences with the new program and adjustments to the older program that affect all institutions.

HEERF II Grant Programs

For public and not-for-profit institutions, the HEERF II program is based on the format of the original round of funding in that there are two separate programs: Student Aid Portion and Institutional Portion (314(a)(1)). For proprietary institutions, there is only a single program under HEERF II called “Proprietary Institutions Grant Funds for Students” (314(a)(4)). There is no comparable institutional portion of aid for proprietary institutions under the new legislation. Public and not-for-profit institutions have until April 15, 2021 to apply for the new awards, but they do not need to apply if they previously received CARES Act HEERF monies. Proprietary institutions also have until April 15, 2021 to apply, and they do need to apply even if they previously received CARES Act HEERF monies. Instructions for applying can be found here.

Student Aid Portion Funds and Proprietary Institution Grant Funds for Students

According to the student aid portion of the original HEERF program, institutions were to make emergency financial aid grants “to in-person students, provided that such emergency financial aid grants are for expenses related to the disruption of campus operations due to coronavirus.” The new student programs under HEERF II have increased the scope of what the financial aid grants can cover. Now, the monies can be used for any portion of the student’s cost of attendance, in addition to emergency costs that arise due to the coronavirus, as stated by HEERF II. The new program now requires institutions to prioritize students with “exceptional need,” while not limiting the monies to in-person students. The new legislation also allows for any student aid under the CARES Act to be used for the additional purposes under the new legislation, if it wasn’t expended by December 27, 2020.

Under the original program, students were not allowed to use the new financial grants to cover institutional costs. These new monies will allow more students to be able to continue their education, despite the hardships faced from the pandemic. As both in-person and remote students were affected by the pandemic, now both are eligible for the aid, thus correcting one of the limitations of the original program The CARES Act limited financial aid grants to students who are or could be eligible to participate in Title IV financial aid programs. The CRRSAA does not have this limitation.

Institutional Portion of Funds

According to the institutional portion of the original HEERF program, funds could be used for “costs that have a clear nexus to significant changes to the delivery of instruction due to the coronavirus.” The new institutional program under HEERF expands on this, as funds can now be used to defray expenses associated with the coronavirus and lists out the following examples:

• Lost revenue
• Reimbursement for expenses already incurred
• Technology costs associated with a transition to distance education
• Faculty and staff trainings
• Payroll

Per the new legislation, reimbursement can be granted for costs used to “carry out student support activities authorized by the HEA that address needs related to coronavirus.” This differs from the original institutional program under HEERF, which stated that any unspent institutional monies could be used for additional grants to students. Keep in mind that the institutional portion of the HEERF II program has only been allocated for public and not-for-profit institutions and NOT proprietary institutions. However, per the new student portion, the limits of any unspent institutional monies under the original HEERF program on December 27, 2020 have been expanded to the new broader criteria – even for proprietary institutions.

The institutional portion of the original HEERF program did not allow proprietary institutions to use these monies to defray lost revenue. Fortunately, this has changed with the new program, and additional guidance on the specifics of the new requirement is expected to be released. However, the good news is muted with the proprietary institutions not eligible for new institutional portion monies under the new legislation.

Additional Resources

The Department of Education released numerous rounds after the initial legislation of HEERF funding. The same is expected with the HEERF II funding, and additional guidance and clarification will also likely be released. Click here for the Department’s up-to-date coverage of HEERF II. The FAQ for the new funding for public and private not-for-profit institutions can be found here, and the FAQ for the new funding for proprietary institutions can be found here.

The new funding will have a direct impact on your institution and how you serve your students.  Depending on the amount of funding you receive, there may be additional audit requirements as a result of the funds. Make sure your institution is aware of the new legislation and talk through your unique situation with one of Sikich’s Title IV audit experts.

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