Newest Stimulus Package Directs More Money to Students in Need

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On March 10, the Biden administration passed the $1.9 trillion economic stimulus bill to provide the third round of relief needed because of the COVID-19 pandemic. The bill, titled the American Rescue Plan Act of 2021 (ARPA), includes $40 billion for the Higher Education Emergency Relief Fund (HEERF). 

The bill allows HEERF, which was first established last year under the Coronavirus Aid, Relief, and Economic Security, or CARES Act, to be extended until September 2023. 

Tribal institutions, historically Black colleges and universities, and other Minority-Serving Institutions received $3 billion in new HEERF funding through the latest bill. Special emphasis was also given to higher education institutions that have endowments totaling less than $1 million. 

ARPA includes guidelines for colleges and universities regarding the dispersal of the HEERF grants, such as stipulating that some funding must go toward the implementation of evidence-based practices to track and control the spread of COVID-19 on campuses. The legislation provides greater funding for direct student assistance than did previous stimulus packages, with institutions now required to allocate 50 percent of their HEERF relief to emergency financial aid. In addition, it temporarily expands the eligibility criteria for the Supplemental Nutrition Assistance Program (SNAP), allowing more college students to receive government assistance for food. Normally, enrollment in college courses renders most people ineligible for SNAP.

“Many students have had their postsecondary careers turned upside down as they manage their schoolwork while also protecting themselves from this virus. On top of that, many college students have also had to deal with food insecurity,” U.S. Education Secretary Miguel Cardona stated in a March 19 press release. “We hope every eligible student takes advantage of these benefits while continuing to focus on their studies.”

Exhausted and stressed out woman taking a break from the computer, rubbing her sore eyes.
“Many students have had their postsecondary careers turned upside down as they manage their schoolwork while also protecting themselves from this virus. On top of that, many college students have also had to deal with food insecurity.”
U.S. Education Secretary Miguel Cardona

The increased support is likely to be vital for low-income college students, many of whom struggled to make ends meet during the pandemic. More than 40 percent of undergraduates reported they lost wages from on- and off-campus jobs last year, according to a survey by the Student Experience in the Research University Consortium. Both undergraduate and graduate students said the shift to online classes resulted in unexpected expenses, and two-thirds of low-income students reported having a family member who lost employment due to the pandemic. Furthermore, racially and ethnically underrepresented students fared the worst financially and experienced higher rates of food and housing insecurity than their White classmates, the survey shows.

As of publication, many colleges and universities are still in the process of determining how to best distribute the latest round of HEERF funding. Indiana University-Purdue University Indianapolis (IUPUI) is slated to receive $59.7 million from ARPA, with nearly $29.8 million earmarked for student assistance. By comparison, the institution’s students received $20 million from the previous two stimulus bills combined. IUPUI used the money from the earlier bills to automatically award grants ranging from $650 to $1,300 to students who had completed the Free Application for Federal Student Aid, received financial aid, and met low-income criteria, according to Marah Yankey, senior news and media specialist at Indiana University. Nearly 9,000 ended up meeting those qualifications. 

Students who meet these criteria will still receive automatic grants under ARPA, but discussions are ongoing as to how IUPUI will distribute all of its dollars now that it will be receiving an amount far greater than in the past, Yankey says. 

“Dispersing the federal emergency grants directly to students gives them the ability and flexibility to use the money in a way that helps them most,” Yankey says. “These funds will help defray costs that arise, such as childcare, food, housing, health care, or a number of other expenses we know students encounter while in school.”

Funds left over from the first two stimulus packages were used for various pandemic-related expenses, including refunds for campus housing, dining plans, and parking passes that were purchased before classes shifted online. IUPUI has spent its own money to financially assist students who do not qualify for the automatic HEERF grants and to pay for personal protective equipment, contact tracing, and COVID-19 testing, according to Yankey.

Although ARPA is a significant improvement over the previous stimulus packages, it still falls short as far as student housing, technology, and travel needs, according to American Council on Education President Ted Mitchell. In a March news release, Mitchell explained that the need for more federal support is critical because campuses have lost funds during the pandemic and are not able to offer enough aid to students. As a result, many will continue to face financial hardships and may drop out.

“We believe that additional broad-based funding measures will be forthcoming,” Mitchell stated, “and we will do everything possible to ensure that federal officials understand the full range of costly and complex challenges that students and their colleges and universities are facing.”

Lisa O’Malley is the assistant editor and Erik Cliburn is a senior staff writer for INSIGHT Into Diversity. Indiana University-Purdue University Indianapolis is a 2012-2020 recipient of the INSIGHT Into Diversity Higher Education Excellence in Diversity (HEED) Award.