Grants & Funding

CARES Act 2: Larger, Fairer — and Still Insufficient

closeup of dollar bill

While the Biden administration has begun pushing for the next recovery package, educators are still sorting out the details of the Consolidated Appropriations Act of 2021, also known as "CARES Act 2." The $900 billion relief package passed by Congress on Dec. 21, 2020 and signed into law on Dec. 27, dedicated $82 billion for education. While the funding covered the same three buckets of money set aside in the CARES Act legislation signed into law in March 2020, specifics vary slightly. Act 2 provides:

  • $54.3 billion for K-12, under the Elementary School Emergency Relief (ESSER II) Fund;
  • $22.7 billion for colleges and universities, under the Higher Education Emergency Relief (HEER II) fund;
  • $4 billion at the discretion of governors, under the Governor's Emergency Education Relief (GEER II) Fund;
  • $10.25 billion for early childhood care providers, almost all issued through block grants and a small portion ($250 million) given to Head Start; and
  • $819 million for outlying areas and schools run by the Bureau of Indian Education.

The K-12 Allocation

Elementary and secondary education received $13 billion in the first round of relief, making the newest round a fourfold increase. However, K-12 advocates have expressed disappointment in the total, calling it a fraction of what's needed. The School Superintendents Association (AASA), for instance, told its members that the allocation was just a third of what schools needed for COVID relief. AASA advocated for $175 billion.

This round of funding will be available to public schools through a formula payout through Sept. 30, 2022. That tacks on an extra year compared to when districts are expected to spend their first round of CARES Act money.

The money can be applied to a number of uses:

  • Coordinating and responding to the health emergency;
  • Activities for supporting special populations;
  • Sanitization and cleaning supplies and related training;
  • Providing meals and technology to students;
  • Providing mental health services;
  • Running summer and supplemental learning programs;
  • Addressing learning loss;
  • Running assessments;
  • Doing school facility repairs and improvements including purchases for improving air quality;
  • Any activity referenced under ESSA, the Perkins career and technical education, the Individuals with Disabilities Education Act (IDEA), the Adult Education and Family Literacy Act or subtitle B of Title VII of the McKinney Vento Homeless Assistance Act; and
  • Other elements needed, including COVID testing.

Unlike the first CARES Act, the second round of funding gives states an out regarding their maintenance-of-effort requirements, which said that they were expected to fund schools at the same level they've maintained over the last three years. Although the hope with Act 2 was that schools wouldn't be forced to use the funding to replace new budget shortfalls imposed by the states, states are now allowed to request a waiver from that stipulation if they're experiencing a decline in revenues.

In this ESSER round, private schools are locked out. However, they're eligible to receive GEER funding, which has set aside $2.75 billion of the $4 billion specifically for their needs. (More on that below.)

Also, although former Secretary of Education Betsy DeVos did her best to tie the new K-12 funding to the return of teachers and students to the classroom, that didn't happen. Schools will not have to reopen for in-person instruction in order to receive their money.

Like ESSER version 1, funding under ESSER 2 will be calculated based on a Title 1 formula, meaning overall that school districts with more lower-income students will receive more money.

Further details about the ESSER program are available on the Department of Education website. Emergency assistance for non-public schools gets its own landing page.

Funding for Higher Ed

Colleges and universities received $14 billion in the first CARES Act legislation, about 60 percent less than higher ed will receive in CARES Act 2. Most of the nearly $23 billion will go to public and private nonprofit institutions; but HEER also covered $1.7 billion specifically for minority-serving institutions and $680 million for for-profit colleges.

As was true in K-12, higher ed advocates have suggested that the latest funding is just a "down-payment" on what's really needed. For example, the American Council on Education, backed by numerous education associations, proposed $120 billion as a more realistic estimate.

As with CARES 1, schools will be expected to dedicate a hefty share to student emergency aid, equal to the same amount they dedicated in round 1. According to the text of the law, funds can be used for 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 training;
  • Payroll; and
  • Student support activities related to the virus;

The grants for students can cover college expenses such as tuition as well as emergency costs such as food, housing, healthcare and childcare.

This time around, there's no mention of leaving out students who aren't legal residents. Also, the funding formula will include coverage for students in all-online programs, a group excluded from help in CARES Act 1.

Other revisions included these:

  • Simplification of the Federal Application for Financial Student Aide (FAFSA), from 100 -plus questions to no more than 36, including one question about race and ethnicity; and
  • Restoration of Pell grant eligibility to incarcerated students, students with previous drug convictions and those who have may have failed or declined to register for the selective service.

What CARES Act 2 didn't include was an extension to the payment and collections hiatus on federal student loan payments; those are set to resume on Feb. 1, 2021. Nor were maintenance-of-effort requirements mentioned, allowing states and local governments to decide to reduce funding to their colleges and universities by the same amount schools receive in GEER allocations.

Changes have been introduced to the funding formula as well for public and nonprofit institutions. Seventy-five percent will be awarded based on the number of Pell recipients who weren't attending online prior to the pandemic. Twenty-three percent will be allocated based on the number of non-Pell students who weren't attending online prior to the move to remote education. And 2 percent will be awarded based on the number of Pell students who were attending entirely online before the shift. The change not only benefits those programs that were fully online before COVID-19 hit, but its big beneficiary is expected to be public community colleges. Calculations will take into account all students, using a full-time equivalency formula; part-timers were left out of the tallying in round 1 of relief. American Progress estimated that CCs will receive about 36 percent of the total funding in Act 2 compared to about 30 percent in Act 1.

Links to the HEER Fund program are on the Department of Education website.

Governor Funding

Of the $4 billion governors received ($1 billion more than they were allocated in Act 1) to address the specific education priorities in their states, more than half of that — $2.75 billion — is intended to be spent on private schools.

A change this time around: They can't get GEER funding if they've already accepted help under the Paycheck Protection Program, administered by the Small Business Administration. Also, the money can't be spent on covering tuition for students. Qualifying uses for privates include:

  • Personal protection equipment and sanitization activities, including training;
  • Improving ventilation systems;
  • Installing physical barriers;
  • COVID testing;
  • Education technology;
  • Transportation costs, as long as they're "reasonable";
  • Leasing space to accommodate physical distancing; and
  • Reworking instructional practices for remote learning.

Addressing the Homework Gap

While some organizations bemoaned the lack of Congressional focus on addressing the "homework gap," that's an area that could get a temporary boost through other Act 2 funding streams. Currently, according to E-rate consultancy Funds for Learning, some 7 million families lack home internet access.

The Emergency Broadband Connectivity Fund, part of the Federal Communications Commission, will receive $3.2 billion to cover reimbursements to service providers delivering broadband and the connected devices to take advantage of it to low-income households. Monthly discounts to families can be up to $50; and up to $75 on tribal lands. The presence of students isn't required for families to take advantage of this program, which is meant to address the needs of unemployed workers as well.

An additional allocation of $285 million will fund a pilot program to address broadband issues in communities where historically Black colleges and universities are located.

More permanently, the National Telecommunications and Information Administration, part of the U.S. Department of Commerce, did receive funding to run two grant programs. The larger one, with $1 billion of funding, will be directed to tribal governments for broadband deployment on tribal lands. The second program, for $300 million, will support broadband infrastructure, especially in rural areas.