How Colleges Are Spending COVID-19 Relief Money

This fall, higher education institutions across the country are distributing billions in aid to students. This money comes from a third round of federal emergency grants meant to blunt the negative impacts of the COVID-19 pandemic.

The Ohio State University on Sept. 10 announced it would distribute $46 million to eligible students, the University of Missouri-St. Louis on Sept. 9 said it will award $10.8 million to students, and Auburn University on Sept. 7 announced it would spend up to $20.5 million on student aid. These are just three of the more than 5,000 institutions of higher education that received money through the latest emergency grants provided by the American Rescue Plan’s Higher Education Emergency Relief Fund (HEERF).

After three rounds of funding, the largest federal investment ever in higher education now totals more than $76 billion. Half of those funds must go to students, but there are still billions more that can be spent with few strings attached.

According to Secretary of Education Miguel Cardona, these “critical funds” help colleges — “particularly those that serve students most impacted by the COVID-19 pandemic” — continue to maintain educational quality and provide student support.

The formula used to distribute the funds among colleges considers the share of Pell Grant recipients enrolled. All three rounds of funding have stipulated that at least 50% of each college’s portion be earmarked for emergency student grants, but it’s up to schools how to deliver that money. Many have relied on students’ Pell Grant status or looked to last year’s FAFSA reports. Most have said they will automatically distribute the cash, while others ask students in need to apply.

But aside from requiring 50% of grants awarded to an institution to be distributed to its students, HEERF allows schools to use the federal funds broadly. Most of the HEERF grants awarded to individual schools must be spent before the end of 2024. These funds may not be considered an endowment or donation, spent on the purchase of real property or on marketing or recruiting, or used to make up for losses in campus alcohol sales.

Outside those restrictions, schools can use HEERF funds to make up for nearly all “lost revenue” incurred as a result of COVID-19, from canceled events to enrollment declines. This funding can cover lost income — from leases, parking, and bookstores, among other sources — as well as ongoing operating costs, salaries and wages, and even summer camps and faculty research.

In keeping with federal suggestions, colleges are also spending funds on pandemic safety measures — remodeling classrooms, upgrading ventilation systems, improving cleaning processes, and securing PPE. Schools are also investing in online learning by building online systems and curricula and buying laptops for students.

Many colleges continue to spend large amounts of money, including funding from HEERF, on testing and quarantining. UNC Charlotte, for instance, spent more than $1 million on COVID-19 tests for student-athletes and roughly $1.4 million on online learning technology.

Additionally, more than a hundred colleges and universities are using HEERF funding to pay down student debts. Last spring, the Biden administration said colleges could use the money to pay off outstanding student balances dating from the declaration of the ongoing national emergency — March 13, 2020.

More than 20 of the schools that plan to pay off student debt are historically Black institutions. For example, Clark Atlanta University wiped off student account balances from the last five semesters. Wilberforce University did so for this year and the last, while South Carolina State University cleared $9.8 million in debt for more than 2,500 students. In Little Rock, Arkansas, Philander Smith College put nearly $2 million toward clearing the debt of almost 500 students.

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