A new bill introduced in the House of Representatives would make low-income college students eligible to receive $1,200 stimulus checks that were distributed as part of the CARES Act.
Student Recovery Eligibility for Low-Income Individuals to Exact Funds (RELIEF) Act of 2020
The bill, introduced by Representative Bobby Rush (D-Illinois), would make college Pell Grant recipients eligible for stimulus payments. “Unimaginably, some of our most vulnerable students were unable to receive stimulus checks through the CARES Act,” Rush tweeted. “I’ve since introduced legislation to correct this oversight by making Pell Grant students eligible for $1,200 direct stimulus payments.”
Many college students didn’t qualify to receive directly $1,200 stimulus checks because they were claimed by their parents as dependents; however, their parents also did not receive the $500 per qualified dependent stimulus payments because the CARES Act excluded dependents who were over the age of 17.
Rush and seven co-sponsors aim to provide payments to help students and their families. “Colleges and universities across the country have shuttered to limit the spread of Covid-19,” Rush said to CNBC. “While these closures have protected students from illness, they have also forced many students to return home to families who simply cannot afford the unexpected financial burden of suddenly having one, two or even three additional mouths to feed.”
Pell Grant Recipients:
In the 2018-2019 academic year, there were 6.8 million Pell Grant recipients, according to the College Board. If each of those individuals were to receive a $1,200 stimulus check, the cost would be $8.1 billion. This would equate to three percent of the $268 billion cost of the overall CARES Act stimulus payments.
Complementary Or Redundant Aid?
How CARES Act Funding Was Allocated:
While the focus on Pell Grant recipients is admirable, it is appropriate to assess whether Rush’s bill potentially overlaps with the Higher Education Emergency Relief Fund (HEERF) that was approved as part of the CARES Act.
The CARES Act allocated $14 billion in funds to institutions of higher education (IHE). Of this, $12.56 billion was distributed based on a formula that took into account overall student enrollment, but skewed heavily towards awarding funding based “on each IHE’s share of full-time equivalent (FTE) enrollment of Pell Grant recipients. . . relative to the total FTE enrollment of such individuals in all IHEs. IHEs were required to spend at least 50 percent of the funds they received “to provide students with emergency financial aid grants to help cover expenses related to the disruption of campus operations due to coronavirus.”
Each IHE was provided with significant discretion in how it awarded emergency aid to students. The only statutory requirement was that the “funds be used to cover expenses related to the disruption of campus operations due to coronavirus (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care, and child care).” In other words, Pell Grant recipients were explicitly considered in determining allocation of funds to IHEs and should have already received some funding from the CARES Act; however, it was quite limited in terms of what the funds could cover and there was significant variability in the amount students received based on the discretion of their university.
Significant Variance In How Schools Have Distributed Aid:
A survey by the National Association of Student Financial Aid Administrators (NASFAA) showed that while only 28 percent of institutions had distributed aid in May, by June, 94 percent had disbursed their CARES Act emergency grants. However, the required reporting by each institution receiving aid highlights a disparity in the amounts given to students as well as the process used to determine the amounts.
Some schools, like the University of Buffalo and Louisiana State University (LSU), automatically allocated funds to students while others, like USC, had an opt-in application process. Grant amounts also varied significantly. For example, both the University of Delaware and the University of Alabama determined grant amounts using Expected Family Contribution (EFC) . A student enrolled at the University of Delaware with an EFC of $0 received an $800 grant while a student at the University of Alabama with the same EFC received a $1,400 grant. Overall grant limits varied at other schools too. For example, Boston University provided grants as high as $3,500 while Clemson University’s grants were capped at $1,000.
Scope of Expenses:
The CARES Act statutory language limited what expenses could be covered by emergency grants to students to those related to the disruption of campus operations due to coronavirus.” This means that while students in many cases received aid, it was only meant to cover very specific items, like installing higher bandwidth wifi at home or purchasing a printer or laptop because of Covid-19. Expenses had to be documented and grant funds couldn’t cover some items related to the financial burden of students having to work from home.
In much the same way as a small business owner could be eligible for both a Paycheck Protection Program loan and a $1,200 stimulus check, it would be appropriate for low-income college students to be eligible for both emergency grants as part of the Higher Education Emergency Relief Fund as well as a personal $1,200 stimulus check.