COVID-19 Response Legislation
As governments take legislative and regulatory action to address the COVID-19 pandemic, CASE is actively advocating for relief for educational institutions and advancement offices. CASE will post the latest summaries, resources, and alerts on this page.
Consolidated Appropriations Act 2021 (H.R. 133)
On December 21, 2020, Congress reached a deal and passed a $900 billion COVID-19 relief and $1.4 trillion omnibus appropriations package (H.R. 133) to fund the government through September 2021. President Trump is expected to sign the bill into law in the coming days. Here is a brief summary of major provisions in the 5,593-page bill and how they impact educational institutions:
- $82 Billion for Education – Similar to the breakdown in the CARES Act from March, funding for education is divided into three major areas.
- $54.3 Billion for Public K-12 schools – Allocates funding to K-12 public schools to help with reopening-related expenses.
- $4.05 Billion for Governors – Provides funding to governors to use at their discretion, including $2.75 billion for services at private K-12 schools. Funding for private schools will be administered by state educational agencies; upon applying, schools will be required to report the number of low-income students that are enrolled and whether they benefited from previous small business loans. To be eligible, private schools must declare that they have not and will not apply for PPP loans after the bill is enacted.
- $22.7 Billion for Higher Education – Provides $22.7 billion for the Higher Education Emergency Relief Fund, including $20.2 billion for public and private nonprofit colleges and universities. $1.7 billion is set aside for historically black colleges and universities (HBCUs), tribal colleges, and other minority-serving institutions (MSIs). Note that institutions that were subject to the endowment excise tax for tax year 2019 will have their funding allocation reduced by 50% and may only use funds for certain purposes. However, the Secretary may waive the requirement in certain cases where institutions demonstrate need for additional funding.
- FAFSA – Reduces and streamlines the number of questions included in the free application for federal student aid. For more information on changes to federal student aid, visit the National Association of Student Financial Aid Administrators (NASFAA) Q&A sheet.
- Pell Grants – Simplifies the formula for calculating Pell grant recipients and increases the maximum award for Pell grant students by $150 to $6,495 for the 2021-2022 school year. It also reinstates Pell grant eligibility for incarcerated students.
- HBCU Aid – Forgives more than $1.3 billion in federal loans to HBCUs for campus repair and construction projects.
- Charitable Giving Incentives – Extends the $300 universal, above-the-line, deduction for non-itemizers through 2021 and also allows joint filers to deduct up to $600. This deduction only applies to cash gifts and does not apply to cash gifts to donor-advised funds or supporting organizations. Note that the $600 deduction for joint filers is only for 2021 – non-itemizing taxpayers claiming charitable deductions in 2020 are still limited to $300 whether single or joint filers. Additionally, the bill extends the temporary increase of limits for cash gifts through 2021 (100% of Adjusted Gross Income for individuals, 25% of taxable income for corporations).
- Paycheck Protection Program – Provides $284 billion in additional PPP loans and extends through March 31, 2021. Also, the bill provides a second PPP forgivable loan to nonprofits, including schools, colleges, universities, or affiliated organizations with 300 or fewer employees that have exhausted their initial PPP loan and can show a loss of 25% of gross receipts in any quarter during 2020.
- Employee Retention Tax Credit – Extends the refundable ERTC through July 1, 2021, which was established in the CARES Act to provide employers a tax credit against payroll taxes for retaining workers. The bill also increases the credit rate from 50% to 70% and raises the limit on per-employee creditable wages from $10,000 per year to $10,000 per quarter.
- Paid Leave Credits – Extends the refundable payroll tax credits for paid sick and family leave that were enacted in the Families First Coronavirus Response Act through March 31, 2021.
The bill also includes another round of direct payments, unemployment benefits, and funding for COVID-19 vaccines, testing, and tracing. For more information, visit the House Committee on Appropriations’ summary of the appropriations provisions and coronavirus relief provisions.
While the year-end bill includes some provisions beneficial to educational institutions, the total amount of relief aid for education falls short of the previous House, Senate, and White House proposals and the $120 billion in relief for colleges and universities requested by the higher education community. CASE, with our charitable and education partners, will continue to advocate for additional relief for schools, colleges, and universities in the 117th Congress and Biden-Harris administration.
To stay updated on the latest developments, continue to check back here and the CASE Advocacy Network.
Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act
On July 27, 2020, the U.S. Senate introduced the $1 trillion Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act. Here is a brief summary of major provisions and how they impact educational institutions:
- Increased Institutional Aid – Allocates $105 billion to support education, including $70 billion for K-12 schools, $29 billion for colleges and universities, and $5 billion for governors to spend on education. The federal funding would remain available through September 30, 2021.
- Note that for K-12 schools, one-third of the aid would go to all school districts and private schools that have applied for the funding. Two-thirds would be available to help schools with additional costs of reopening for in-person instruction.
- Colleges and universities that paid the endowment tax in 2019 would receive less aid and would only be allowed to use the funding for student aid. Additionally, the allocation for colleges and universities includes $2.9 billion in direct funding for Historically Black Colleges and Universities (HBCUs) and Minority Serving Institutions (MSIs).
- Adjustments to Foreign Gift Reporting – Amends Section 117 of the Higher Education Act by lowering the foreign gifts and contracts reporting threshold for colleges and universities from $250,000 to $50,000. It also allows the Department of Education to fine institutions for repeatedly failing to file a foreign gift report.
- New Temporary Liability Protections – Protects U.S. schools, colleges, and universities from lawsuits related to COVID-19. The bill covers coronavirus-related exposure injuries occurring between December 1, 2019 and October 1, 2024, and applies to personal injury lawsuits associated with COVID-19
- Modifications to Paycheck Protection Program – Provides $190 billion to the Paycheck Protection Program and allows businesses with under 300 employees and a 50% reduction in revenue to apply for a second round of loans. The bill also makes funding available for separate low-interest loans that could be paid back over 20 years.
- Changes to Employee Retention Tax Credit – Increases employee refundable payroll tax credit from 50% to 65% of $10,000 per quarter (not to exceed $30,000 for the year) in the wages paid to each employee by employers. Employers with fully or partially suspended operations due to government orders related to COVID-19 are eligible for the credit. However, public institutions remain ineligible.
The bill also includes increased federal funding for coronavirus testing and vaccine development, unemployment insurance, and the military and defense industry. Read the American Council on Education’s (ACE) summary for more details on specific provisions.
While the HEALS Act proposes some provisions beneficial to educational institutions, the bill does not include strengthened charitable giving incentives. CASE, with the Charitable Giving Coalition, is continuing to urge Congress to include the Universal Giving Pandemic Response Act (S. 4032, H.R. 7324) in the final COVID-19 response package. CASE also joined the nonprofit community in a letter calling on Congress to provide additional relief for charities, including U.S. schools, colleges, and universities.
Lawmakers began negotiations following the bill's introduction and aim to reach a deal by the August recess. Ultimately, the final package will likely reflect a compromise between the House, Senate, and Administration.
Health and Economic Recovery Omnibus Emergency Solutions Act (H.R. 6800)
On May 15, 2020, the U.S. House passed the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES) Act (H.R. 6800). The latest COVID-19 relief package was introduced by House Democratic lawmakers and passed mostly along party lines.
Key takeaways affecting education include:
- Increased Institutional Aid – Allocates $100 billion to support schools and higher education institutions, including $90 billion for a State Fiscal Stabilization Fund for grants to states to support K-12 schools and public colleges and universities and $10 billion to alleviate coronavirus-related costs for private colleges and universities, including Minority-Serving Institutions.
- Adjustments to Main Street Lending Program – Expands eligibility to all nonprofits (including schools, colleges, and universities), and requires the Federal Reserve to provide nonprofits a low-cost loan option plus the ability to defer payments. Additionally, the loans could be forgiven for non-profits predominately serving low income communities that are ineligible to receive a Paycheck Protection Program (PPP) loan.
- Modifications to Paycheck Protection Program – Extends the covered period for the program from June 30 to December 31, 2020. The bill also expands eligibility to all nonprofits (including private schools, private colleges, and private universities) regardless of their employee count. Under the CARES Act, the program was limited to small businesses with fewer than 500 employees.
- Improvements to Employee Retention Tax Credit – Makes public institutions eligible for credit; expands the refundable payroll tax credit up to 80% of $15,000 and $45,000 in the aggregate in wages paid to each employee per quarter during the COVID-19 crisis.
- Expansion of Emergency Paid Sick Leave and Family and Medical Leave Tax Credits – Removes the limitation on public sector employers enacted in the Families First Coronavirus Response Act (FFCRA), allowing public colleges and universities to receive the 100% refundable tax credit on the payroll taxes required to be paid under such leave and additional health benefits. Additionally, large private nonprofits (including private schools, private colleges, and private universities) would be eligible for the tax credits.
- Exemption of Emergency Financial Aid Grants from Taxation – Exempts from taxation all CARES Act emergency student financial aid grants and any institution-provided emergency student financial aid grants.
- Increased Federal Funding for State and Local Governments – Provides $500 billion in funding to assist state governments and $375 billion in local fiscal relief funding, which could be allocated to benefit public colleges and universities.
The package also includes additional funding for food and nutrition assistance, unemployment benefits, and coronavirus testing and tracing. Read the House Appropriations Committee summary and the American Council on Education’s (ACE) summary for more details on specific provisions.
CASE joined ACE and higher education association colleagues in a letter of support prior to the bill’s passage in the House. The Senate is not expected to consider their version of relief legislation until after the Memorial Day holiday. Ultimately, the final bill will likely reflect a compromise between the House, Senate, and Administration.
Coronavirus Aid, Relief, and Economic Security Act (H.R. 748)
On March 27, 2020 the U.S. House passed and President Trump signed into law the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748).
The CARES Act, the third congressional bill to address the crisis, includes aid for educational institutions and enhanced charitable giving incentives, including:
- Aid to Education – The plan provides roughly $13 billion to states to support K-12 education and $14 billion in direct aid to higher education institutions, half of which must be used to provide direct emergency aid to students. The higher education community asked for $50 billion in direct relief and $8 billion for technology implementation to fund distance learning.
- Temporary Universal Charitable Deduction – A temporary, above-the-line deduction allows non-itemizing taxpayers to deduct charitable gifts of cash up to $300 in 2020. Under current law, only taxpayers who itemize can deduct charitable gifts.
- Temporary Suspension of AGI Limitations – A temporary suspension lifts the Adjusted Gross Income (AGI) limitations on cash gifts for 2020, allowing individuals to deduct up to 100% of their AGI in cash gifts.
- Suspension of Student Loan Payments – The bill suspends student borrowers’ obligation to make payments on their federal Direct Loans through September 2020, suspends interest on the payments, and counts the suspended payments towards payment requirements for forgiveness provisions such as the Public Service Student Loan Forgiveness Program.
- Loan Program – Private colleges and other 501(c)3 organizations with 500 employees or less are eligible to apply for loans administered by the Small Business Administration through December 31, 2020.
For a more comprehensive summary of how the CARES Act impacts higher education, view the American Council on Education's summary of the law.
Families First Coronavirus Response Act (H.R. 6201)
On March 18, 2020, the U.S. Senate passed and President Trump signed into law the Families First Coronavirus Response Act (H.R. 6201). Here is a brief summary of major provisions and how they impact educational institutions:
- Emergency Paid Sick Leave – Private employers (including private colleges, universities, and independent schools) with fewer than 500 workers and all public sector employers (including public colleges, universities, and schools) have to provide 2 weeks paid sick leave for full-time employees and average hours for a two-week period for part-time employees due to an isolation or quarantine order or advisory or experiencing symptoms of COVID-19, or caring for a family member or child whose school or place of care is closed due to a public health emergency. Capped at $511 per day and $5,110 in the aggregate for those on leave due to their own health issue; $200 per day and $2,000 in the aggregate if caring for others.
- Emergency Paid Family and Medical Leave – Private employers (including private colleges, universities, and independent schools) with fewer than 500 workers and all public sector employers (public colleges, universities, and schools) have to provide as many as 12 weeks of job-protected leave to employees to care for child whose school or place of care is closed. The first ten days could be unpaid or the employee could choose to use other leave. Employers are required to pay employees two-thirds of their wages not to exceed $200 per day and $10,000 in the aggregate. Small businesses with fewer than 50 employees exempted.
- Tax Credits for Paid Sick, Family and Medical Leave – Employers receive a 100% refundable tax credit on the payroll taxes required to be paid under such leave and additional health benefits. Employers would not have to pay payroll taxes on additional wages paid due to leave requirement.
- Note that public colleges and universities are not eligible for these tax credits despite being required to provide paid sick and family and medical leave.
- CASE joined with the National Association of College and University Business Officers (NACUBO) to urge Congress to make public colleges and universities eligible for the tax credits.
The bill also includes increased federal funding for unemployment insurance, Medicaid, food and nutrition assistance, and free coronavirus testing. Read the Senate Finance Committee summary for more details on specific provisions.
- Consolidated Appropriations Act 2021 (H.R. 133)
- Health and Economic Recovery Omnibus Emergency Solutions Act (H.R. 6800)
- Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R.748)
- Families First Coronavirus Response Act (H.R.6201)
- Letter to Tax Writing Committees on Payroll Tax Credit Exclusion of Public College and University Employers, National Association of College and University Business Officers (NACUBO), March 2020
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