April 2020 Federal News of Note
CASE Joins Partners to Request Assistance for Educational Institutions in Next Coronavirus Relief Legislation
On April 9, CASE joined the American Council on Education (ACE) and other higher education organizations to request $46.6 billion in emergency aid for students and U.S. colleges and universities in the next COVID-19 relief package.
While roughly $14 billion in direct aid was included in the recently enacted CARES Act, the amount was insufficient to address the urgent needs and overall impact facing U.S. higher education institutions and students as a result of the ongoing crisis. The community initially requested $50 billion in funding and $8 billion for distance learning-related technology for consideration in the last package.
The sector’s $46.6 billion request outlines equal funding priorities for students and institutions, including:
- $23.3 billion in emergency grants for students to start or continue their education and support housing, technology assistance for online learning, or travel costs, and
- $23.3 billion in aid for colleges and universities to cover financial losses from tuition, room and board refunds, and other business costs.
In a separate letter, CASE joined ACE to urge Senate Finance and House Ways and Means leadership to also consider tax proposals intended to support students and institutions in the next COVID-19 relief legislation. The letter recommended a set of policy changes and fixes to the CARES Act and the Families First Coronavirus Response Act (FFCRA), including:
- Expansion of paid sick, family and medical leave and tax credits for paid sick, family and medical leave – Extend leave provisions and refundable tax credits to public institutions, and potentially, large private nonprofit institutions that provide paid leave. Currently, private employers with more than 500 workers and public colleges and universities are ineligible under FFCRA.
- Expansion of employee retention tax credits – The CARES Act created a refundable payroll tax credit for private nonprofit institutions. The proposal would extend this to public institutions whose operations were suspended due to the pandemic.
- Suspension of taxes on scholarship and grant aid – Temporarily suspend the taxability of scholarship/grant aid as unearned income, allowing low-and middle-income students to retain more aid for education purposes.
- Enhancement of institutional debt service – Temporarily allow advance refund tax-exempt bonds, provide access to debt bond financing, and create a pandemic response bond program that would help public and private institutions reduce debt related to COVID-19 costs.
- Enhancement of higher education tax credits – Increase credit and coverage of the American Opportunity Tax Credit (AOTC) and Lifelong Learning Credit (LLC), providing more support to students adversely affected the crisis.
- Suspension of the investment income excise tax – Temporarily end the excise tax on private college and university endowments, which would prevent charitable gifts from being redirected away from supporting student financial aid, teaching, and research.
Additionally, CASE joined the charitable and nonprofit community in a letter calling for reforms to the CARES Act and a dedicated nonprofit track in the next stimulus bill to ensure that charitable organizations receive immediate relief.
On charitable giving incentives, CASE continues to work closely with our partners in the Charitable Giving Coalition to expand measures that would encourage more giving. Earlier this week, the Coalition urged congressional leaders to consider strengthening and extending the temporary, above-the-line universal charitable deduction and suspension of the Adjusted Gross Income limitation on cash gifts so that nonprofits, including U.S. colleges, universities, and independent schools, are able to achieve their missions and address continued needs.
Lawmakers are moving quickly to draft a fourth COVID-19 legislative package, which could be introduced soon and be ready for a vote in the coming weeks.
As we work with our education and charitable sector partners to make the case for additional relief for educational institutions, subscribe to the CASE Advocacy Network and visit our COVID-19 Response Legislation page for the latest developments.