Article
Third COVID-19 relief funding package – American Rescue Plan Act provides $40 billion for colleges and universities
March 18, 2021 · Authored by Michael W. Wascura, Amanda Shanaberger
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.
- Coronavirus Aid, Relief, and Economic Security (CARES) Act provided $14 billion in funding
- Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) provided $22.7 billion in funding
- American Rescue Plan Act (ARPA) provides $40 billion in funding
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.
The ARPA follows the terms set in the CRSSAA that higher education institutions may use the funding to:
- defray expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with transition to distance education, faculty and staff trainings and payroll)
- provide financial aid grants to students (including students exclusively enrolled in distance education), which may be used for any component of the student’s cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, healthcare (including mental health) or child care
