Higher education institutions are set to collectively receive nearly $40 billion in a new round of funding after the House passed the $1.9 trillion COVID-19 relief plan, signed into law on March 11, 2021. Officially titled the American Rescue Plan Act of 2021, the bill provides the largest funding boost to colleges and universities since the start of the pandemic to date.
The allocation formula is similar to previous allocation formulas, except that there will be a reduced allocation for colleges with endowments over $1 million and an increased allocation for institutions with endowments under $1 million, including institutions that do not have endowments. The allocation formula to determine each institution’s award amount for these funds will be similar to the one used to determine CRRSAA allocations.
Whereas the CRRSAA only required the same dollar amount spent on students as under the CARES Act, the ARPA requires at least 50% of the support be used for emergency financial aid grants to students, prioritizing students with exceptional financial need.
While we expect there will be reporting requirements related to this funding, none have been released for CRRSAA or ARPA at this time. Additional clarification from the Department of Education is also expected to answer questions such as whether DACA students are considered eligible, the time period expenses can be applied to and further guidance for determining revenue losses. Stay tuned for additional updates as more information becomes available.
Our specialized higher education team can help institutions approach ARPA and the CRRSAA Higher Education Emergency Relief Fund (HEERF II), review allocation plans, discuss accounting treatment and navigate the complexities and opportunities under ARPA and CRRSAA.
We can also help guide institutions through the Paycheck Protection Program (PPP) and Employer Retention Credit (ERC). There have been notable changes to the now extended ERC, creating an entirely new credit for 2021 that is separate and distinct from the ERC available for 2020, and appears to offer a significant opportunity for institutions, even those that received funding through the PPP or PPP2.
For more information, or to learn how we can help, contact our team.