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Higher Education Updates on HEERF Reporting and Funding; FAFSA Changes

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The new year has brought several updates and changes for higher education leaders to be aware of.

Initial Higher Education Emergency Relief Fund Report Due Date

Higher education institutions that receive funds through the Higher Education Emergency Relief Fund (HEERF) are required to submit the first HEERF annual performance report via the Annual Report Data Collection System.

This report is due by February 1, 2021. Not reporting could delay additional funding or cause the loss of funding.

If you need help with your institution’s submission, contact heerf@ed.gov or call the United States Education Department (ED) Information Resource Center at 1-800-872-5327.

Allocations for Round 2 of Funding

The Consolidated Appropriations Act of 2021 signed into law on December 27, 2020 included a second round of funding for higher education institutions, the Higher Education Emergency Relief Fund II (HEERF II).

The ED has published this table for HEERF II funding. It includes a breakdown of how much must be spent on student aid versus the amount the institution can use.

A few things to note:

  • We recommend that you not draw down the funds until your institution has a plan for spending the money. This will help you comply with the cash management requirements.
  • Funds not spent under the initial round of HEERF funding are rolled into HEERF II, which has expanded eligible uses. (See below.) In terms of general ledger tracking, ED noted that depositing HEERF funds into the general fund is not acceptable as institutions are required to be able to track how the funds were used.
  • Lost revenue is now an allowable charge for the institutional portion. This is different from room and board refunds. Certain charges will be subject to the procurement standards under Uniform Guidance, with an exception for sole sourcing if documentation is made immediately to substantiate why the decision made the most sense to meet the intent of the funding.
  • Online-only students are now eligible for student grants.

What to know about applying for funding:

  • As mentioned above, ED has published this table. However, it’s important to note that the systems take time to process each award, so it will be a while before all funding is populated and available to draw down. ED said it is working around the clock to make these funds available.
  • If you completed the initial certification for the student funds, drawing down HEERF II funds indicates your agreement with the updated terms.
  • Likewise, if you completed the initial certification for the institution funds, drawing down HEERF II funds indicates your agreement with the updated terms. If you did not previously complete this certification, you will need to complete it to receive HEERF II funding. You must complete this certification by April 15, 2021, or the funds will be reallocated.
Changes Coming to FAFSA and Aid

The Free Application for Federal Student Aid (FAFSA) is undergoing simplification changes, which include:

  • Replacing “expected family contribution” with “student aid index,” along with underlying formula changes.
  • Reducing the number of questions asked on the FAFSA application.
  • Expanding the eligibility for Pell Grants, including to incarcerated students.
  • Repealing the lifetime limitation on subsidized loan eligibility (SULA). Financial aid and registrar offices will benefit the most from the reduced burden of compliance.

These changes are designed to be effective for the 2023 – 2024 school year, which means that beginning October 1, 2022, applications will be under the new format.

Please note that the law allows the U.S. Secretary of Education to implement certain provisions early. We anticipate that further clarification and guidance will be provided in the coming months.

We will provide more detail on the FAFSA changes during the upcoming Higher Education Roundtable and webcasts. Information about those events will be available here on our website under Events.

Please contact us with any questions.

 

Additional Resources

CRRSAA: Higher Education Emergency Relief Fund (HEERF II) – U.S. Department of Education Office of Postsecondary Education

Summary of the Higher Education Provisions in the Consolidated Appropriations Act of 2021 – American Council on Education

ED Announces Availability of New Relief Funds – National Association of College and University Business Officers

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