AGB Policy Alert: U.S. Department of Education Issues HEERF III Information

By AGB May 21, 2021 June 23rd, 2021 AGB Alerts

On Tuesday, May 11, 2021, the U.S. Department of Education announced that it is now providing all formula funding for students and institutions under the Higher Education Emergency Relief Fund III (HEERF III) appropriated through the American Rescue Plan (ARP). The department’s announcement covers roughly $36 billion out of a total of almost $40 billion for higher education. The gap includes specific allocations to Historically Black Colleges and Universities (HBCUs) and other Minority Serving Institutions (MSIs).

What Board Members Need to Know

AGB produced a summary of the American Rescue Plan when it passed in March 2021.

With this announcement, the department released a new FAQ document to help colleges and universities understand how the funding can be used, in addition to allocation tables under the funding formula. While HEERF III is similar to the funding allocated under the December 2020 Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) and the March 2020 Coronavirus Aid, Recovery, and Economic Security (CARES) Act, the department released additional information and a final rule to add further clarity about how college and university leaders can use the funding. In that rule, the department overturned an earlier decision that limited the eligibility of certain students to receive the funds. Now, institutions may award financial or emergency grant aid from HEERF to any student who is or was enrolled in a participating institution on or after March 13, 2020—including students ineligible for Title IV funding, such as DACA students.

Institutions that previously received funding for HEERF typically do not need to apply again.

Why This Is Important

AGB and other experts are highlighting the need for institutional leaders to consider how to use these “one-time” funds from the federal government to assist them in rethinking the needs of their institutions. Rather than only filling holes left by the impact of COVID-19, boards may consider new and innovative ways to harness this funding in a sustainable way. Paul Friga, PhD, leader of AGB Consulting’s Strategic Transformation of Public Higher Education practice area and the clinical associate professor of strategy at the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill, recently authored a blog post about how to best use the institutional portion of those funds to focus on student success, new revenues, and operational efficiencies. In the April 27 episode of AGB’s Trusteeship Podcast, Travis Reindl of the Gates Foundation and Scott Jenkins of the Lumina Foundation both caution institutions against only using these funds to return to the status quo.

Questions for Board Members

  1. What are the most urgent needs of your institution, system, and/or foundation?
  2. How should the needs for institutional funds be prioritized to benefit the institution most effectively? How should the employment of faculty and staff be considered?
  3. With newly released guidance on which students might be eligible for emergency grant aid, does your institution have policies that may facilitate or inhibit taking advantage of this greater flexibility?

Additional Resources

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