American Rescue Plan Act: Implications and Aid for Higher Education Institutions

The American Rescue Plan Act of 2021 (ARPA) allocates nearly $40 billion in additional aid to the Higher Education Emergency Relief Fund (HEERF), which is available through September 30, 2023.

This increase in funds accompanies the US Department of Education’s expanded HEERF application, flexibility, and guidance for recipients.

Below, learn how ARPA funds will be allocated, steps to receive aid, and how your higher education institution can more easily apply HEERF grants.

How ARPA Funds Will Be Allocated

The ARPA’s allocation methodology, terms, and conditions closely follow those provided in the second stimulus legislation, Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA).

Under the ARPA, the funding available for HEERF grants is expected to be allocated to institutions similarly to how the funding under CRRSAA was allocated, primarily based on the relative enrollments of students who were exclusively enrolled in distance-education courses.

How ARPA Funds Must Be Used

Student Portion of Received Funds

At least 50% of received funds must be used to provide emergency financial aid grants to students, which may be applied toward:

  • Any component of the student’s cost of attendance 
  • Emergency costs that arise due to COVID-19, such as tuition, food, housing, child care, or health care—including mental health care

Institutional Portion of Received Funds

The remaining funds can be used for the same items as listed under the CRRSAA:

  • Defray expenses associated with the coronavirus, including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff training, and payroll—which includes benefits
  • Make additional financial aid grants to students
Coronavirus Safety Measures and Outreach

In a departure from CRRSAA guidance, the ARPA adds a requirement that a portion of the institutional funds received must be used to:

  • Implement evidence-based practices to monitor and suppress the coronavirus under public health guidelines
  • Conduct direct outreach to financial aid applicants about the opportunity to receive a financial aid adjustment due to recent unemployment of a family member or independent student, or other circumstances
Increased Flexibility for HEERF Grant Recipients

The US Department of Education is also offering institutions more comprehensive guidance and increased flexibility when using funds received under the Higher Education Emergency Relief Fund (HEERF) grant programs.

Retroactively Charge HEERF Costs

Grantees will now have the flexibility to charge HEERF costs back to March 13, 2020, the date that the coronavirus pandemic was declared a national emergency.

These updates reflect a change in the US Department of Education’s prior position, which only allowed funds received under the CRRSAA to be used for costs incurred on or after December 27, 2020—the date of the CRRSAA’s enactment.

Guidance for Calculating Lost Revenue

The US Department of Education supplemented this change of interpretation with additional guidance addressing:

To learn more about HEERF regulations and availability, visit FAQs related to HEERF II funding.

We’re Here to Help

For more information about COVID-19 relief available to higher education instructions, ways to apply ARPA funds, or changes to HEERF grants, contact your Moss Adams professional.

Additional Resources

For regulatory updates, strategies to help cope with subsequent risk, and possible steps to bolster your workforce and organization, please see the following resources: