- Institutions should prioritize students with the greatest need and factor in student socioeconomic status
- Institutions can elect to award aid to all their students aid or award aid only to those who have demonstrated need
- USDE recommends, but does not require, using the maximum Federal Pell grant (for the 2019-2020 academic year, $6,195) as the maximum amount of aid awarded to each student
10. How can Institutional Funds be used?
On October 14, 2020, the U.S. Department of Education (USDE) provided a HEERF FAQ rollup document on Institutional Fund uses. This document combines several guidelines and conditions that apply to the institutional use allocation:
- Institutions need to have first signed the student aid funding certificate to access these funds
- Should institutions choose, they can convert their institutional use funds to provide additional emergency financial aid to students under the same rules as the already issued agreement
- USDE urges institutions, especially well-resourced schools and universities with substantial endowments, to “devote the maximum amount of funds possible to emergency financial aid grants to students, including some or all of the funds earmarked for Recipient’s Institutional Costs” ( Section 3 of the Funding Agreement )
- Institutions may not use these funds to provide emergency grants to students who were enrolled exclusively in online or distance education programs prior to March 13th
- Institutions have reasonable discretion on how they use the money as long as they can demonstrate a valid connection between the eligible expense and “significant changes to the delivery of instruction due to the coronavirus” ( Section 4 (b) of the Funding Agreement )
- Institutions can use the funds to reimburse themselves for student refunds (e.g., room and board, tuition, and other fees) or technology (e.g., laptops, hotspots) they purchased for students, if done so on or after March 13 th
- Institutions cannot use the funds for executive salaries or benefits or for the provision of pre-enrollment recruitment activities such as marketing and advertising
- NEW DIRECTION – Loss of Revenue: Institutions cannot use the funds to defray losses of revenue.
- Institutions that accept funds are required to continue to pay employees and contractors to the greatest extent practicable based on the unique financial circumstances at each institution will need to submit quarterly reports to USDE to demonstrate that they used the funds for qualified purposes and to account for how much of the funds were used to reimburse refunds
- Institutions should spend the funds within one year of the date of the certificate of agreement.
11. What is the deadline (project period or period of performance) for institutions to spend HEERF funds received under the CARES Act?
All institutions were given 1 calendar year (365 days) from the date of award in their HEERF Grant Award Notification (GAN) to complete the performance of their HEERF grant.1 Therefore, for example, if a grantee received a GAN on April 7, 2020, the one calendar year period of performance for their HEERF grant would be through April 6, 2021. Please note that after the end of the year-long period of performance, grantees have an additional 90 calendar days to liquidate their obligations made during their year-long period of performance as part of the grant closeout procedures (2 CFR § 200.343(b)).
12. Is it possible for institutions to request an extension of time to expend HEERF funds?
The Department understands that some grantees, even given the emergency nature of the HEERF grant, may be unable to obligate funds by this time. Consequently, no-cost extensions (NCEs) of up to 12 months are available as provided for in 2 CFR § 200.308(d)(2) . NCEs may not be exercised merely for the purpose of using unobligated balances. Given the emergency nature of HEERF grants, the Department does not intend an NCE to extend longer than 12 months. HEERF grantees are encouraged to discuss any need for an NCE with their respective program officer well in advance of the end of their grant period of performance.
13. Can institutions charge indirect costs against the HEERF I institutional portion?
It depends. If institutions have remaining HEERF I funds, as of 12/27/2020, those funds can cover indirect cost at the federally approved indirect cost rate, or at the 10 percent di minimus, if an institutions does not have a federally approved indirect cost rate.
14. Can institutions charge HEERF I Institutional portion for lost revenues?
It depends. If institutions have remaining HEERF I funds, as of 12/27/2020, those funds can cover lost revenues.
CRRSAA HEERF II FAQs
HEERF II General FAQs
1. Is the HEERF II funding new funding or does this allocation also include the CARES Act HEERF I funding?
The Higher Education Emergency Relief Fund II (HEERF II) is authorized by the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), Public Law 116-260, signed into law by President Donald J. Trump on Dec. 27, 2020. This funding is an additional amount of funding to the HEERF I funds authorized on March 27, 2020.
2. When can we expect to receive HEERF II funds?
The funds became available January 14, 2021; the day the US Department of Education (USDOE) announced and posted the information on their website.
3. Why does the initial Federal Grant Award Notice have the prior budget dates?
The USDOE will reissue GANs. The initial GANs have the wrong budget term.
4. What is the deadline (project period or period of performance) for institutions to spend HEERF funds received under the CARES Act?
The HEERF II require funds be spent within one-year. For HEERF I, the start date is based on the certification and agreement date, and the HEERF II start date is based on the GAN date. All institutions were given 1 calendar year (365 days) from the date of award in their HEERF Grant Award Notification (GAN) to complete the performance of their HEERF grant.1 Therefore, for example, if a grantee received a GAN on April 7, 2020, the one calendar year period of performance for their HEERF grant would be through April 6, 2021. Please note that after the end of the year-long period of performance, grantees have an additional 90 calendar days to liquidate their obligations made during their year-long period of performance as part of the grant closeout procedures (2 CFR § 200.343(b)).
HEERF II Student Portion FAQs
5. What amount of HEERF II funds must my institution devote to financial aid grants to students?
The CRRSAA requires that institutions receiving HEERF II funding provide the “same amount” of funding in financial aid grants to students that it was required to provide under its original Student Aid Portion (CFDA 84.425E) allocation amount, as listed on the CARES Act Section18004(a)(1) allocation table (HEERF II). See the allocation columns in green for your respective allocation amounts.
HEERF II Institutional Portion FAQs
6. How has the use of funds changed for institutional uses?
Institutions have expanded flexibility in their use of supplemental Institutional Portion funds (CFDA 84.425F). Under section 18004(c) of the CARES Act, institutions were required to use their Institutional Portion awards to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus and/or for additional emergency financial aid grants, subject to certain limitations.
In contrast, allowable uses under the CRRSAA for Institutional Portion awards include:
- Defraying expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll);
- Carrying out student support activities authorized by the Higher Education Act of 1965, as amended (HEA), that address needs related to coronavirus; and
- Making additional financial aid grants to students (as described in Question 8).
Similar to what was required for Institutional Portion awards under Section 18004 of the CARES Act and the Department’s Certification and Agreement for those funds, under section 314(d)(3) of the CRRSAA, no supplemental Institutional Portion awards or new Institutional Portion awards may be used to fund contractors for the provision of pre-enrollment recruitment activities; marketing or recruitment; endowments; capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship; senior administrator or executive salaries, benefits, bonuses, contracts, incentives; stock buybacks, shareholder dividends, capital distributions, and stock options; or any other cash or other benefit for a senior administrator or executive.
HEERF II and III can also cover lost revenues associated with the COVID-19, such as enrollment fees and charges (including unpaid student accounts receivable or other student account debts).
Payroll
Lost Revenues (See USDE Lost Revenue FAQs)
9. What is Lost Revenue?
Lost revenue refers to revenues an institution expected to receive but reduced or eliminated due to COVID-19. As such, lost revenue estimates are acceptable.
10. When may an institutions charge lost revenue to its HEERF grant award?
An institution may charge lost revenue to its grant at the end of the period that it is using to estimate lost revenue. If using the fiscal year period, then at the end of that period.
11. What are potential sources of lost revenue that may or may not be reimbursable under the HEERF grant programs?
- Enrollment (Tuition), fees, and institutional charges (including unpaid student accounts receivable or other student account debts)
- Room and board
- Enrollment declines, including reduced tuition, fees, and institutional charges
- Supported research
- Summer terms and camps
- Cancelled ancillary events
- Disruption of food service
- Dormitory services
- Childcare services
- Use of facilities or venues, including external events such as weddings, receptions, or conferences
- Bookstore revenue
- Parking revenue
- Lease revenue
- Royalties
- Other operating revenue
- Capital outlays associated with facilities related to athletics (including fees assessed for capital athletic facility construction)
- Acquisition of real property (including bond revenue)
- Contributions or donations to the institution
- Marketing or recruitment activities
- Revenue related to sectarian instruction or religious worship
- Alcohol sales
- Investment income (including endowment and quasi-endowment revenue)
12. How may an institution calculate its estimated lost revenue? (See table on page 6 and Question 9)
The CRRSAA does not specify how institutions may calculate their lost revenue. Accordingly, institutions have flexibility to calculate a reasonable estimated lost revenue. For example, an institution may use a year-over-year comparison using the prior year or a comparison using 3- or 5- year combined average as baseline revenue.
13. How will the effects of HEERF be reflected in SEFA and what year? (See Question 8)
HEERF II expenditures and lost revenue charged in fiscal year 2021 should be in the fiscal year 2021 SEFA because the award permitting the estimated lost revenue and expenses back to March 13, 2020, did not occur until fiscal year 2021.
Reimbursement of Indirect Costs (See USDE HEERF II FAQs #8)
An indirect cost rate allows an institution to recover a portion of administrative costs incurred to implement the federal grant programs. This rate is specified in an institution’s negotiated indirect cost rate agreement. If an institution does not have a current negotiated rate with its cognizant agency, for indirect costs, it may appropriately charge the de minimis rate of 10% percent of Modified Total Direct Costs (MTDC). If an institution has or had a negotiated rate, they cannot use the 10% de minimus.
14. Can an institution claim indirect costs to the HEERF grants?
Yes, The HEERF II and III grants allow institutions to claim indirect costs and a reasonable amount of administrative costs.
15. Is there any guidance available for charging indirect costs to HEERF grants?
- If your district has a federally approved negotiated rate, you need to use the base (salary and wage or MTDC) in your agreement for indirect costs.
- If your district does not have a federally approved negotiated rate, use can use the 10% de minimus, which is based on the MTDC method (2 CFR 200.68) for indirect costs. (See example below).
a) Identify budgeted indirect costs allowable for inclusion or exclusion:
- Direct salaries & wages (personnel working on grant)
- Applicable fringe benefits
- Materials & Supplies
- Services
- Travel
- Subawards & Subcontracts (up to the first $25,000)
- Equipment
- Capital expenditures
- Rental costs (i.e., real property)
- Tuition remission
- Scholarships & fellowships
- Participants support
- Portion of subawards & subcontracts in excess of $25,000
| EXPENSE CATEGORY | ANNUAL EXPENSE | AMOUNT OF INDIRECT (10%) |
|---|---|---|
| Total Personnel | $190,000 | $19,000 |
| Fringe @ 20% | $38,000 | $3,800 |
| Travel | $10,000 | $1,000 |
| Supplies | $15,000 | $1,500 |
| Contractual 1 | - | - |
| Project Evaluator | $30,000 | $2,500 |
| Website Design | $75,000 | $2,500 |
| Communications Materials | $10,000 | $1,000 |
| Total Contractual | $115,000 | $6,000 |
| Other | $1,000 | $100 |
| Total Direct | $369,000 | - |
| Indirect (10%) | $31,400 | $31,400 |
| Total Costs | $400,400 | - |
Expenses must be charged consistently
- Direct or indirect, but may not be charged as both
- De minimis rate must be used for all federal awards
- De minimis rate can be used indefinitely or until a negotiated rate is established.
