What HEERF Funding Did for Colleges During the COVID-19 Pandemic

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The Higher Education Emergency Relief Fund (HEERF) was federal pandemic aid for colleges and their students. It paid for emergency grants that students could put toward tuition, food, housing and other costs, and it helped colleges cover their own pandemic expenses. Congress provided $76.234 billion through three relief laws, and even with approved extensions the deadlines for spending it passed in 2023 and 2024.

Most of the money went to colleges as direct grants, and a minimum share of each grant had to go to students. Colleges could put the rest toward payroll, remote-class technology and lost revenue, or use it to cancel students’ unpaid balances. In 2021, 12.7 million students received $19.5 billion in emergency grants, colleges reported. What the money changed for those students is harder to measure.

Two kinds of relief in one fund

After campuses closed in spring 2020, the Department of Education sent colleges grants to give students emergency aid for the expenses that followed, such as housing, technology and course materials. Colleges could use the part of a grant not reserved for students, called the institutional share, for coronavirus-related expenses, including lost revenue, remote-learning technology, staff training and payroll. They could also use institutional funds to make additional emergency grants to students. HEERF had three parts: direct grants to colleges, aid for minority-serving institutions, and the Fund for the Improvement of Postsecondary Education (FIPSE), a program providing additional aid to colleges.

Three laws, changing student-aid requirements

Congress appropriated a combined $76.234 billion for HEERF through the three relief laws. Later rescissions, which canceled some previously provided funding, reduced that total to $75.481 billion.

Education used a formula that considered a school’s share of full-time students receiving Pell Grants, federal grants for low-income undergraduates. Eligible colleges could then apply to Education for funding.

The CARES Act required half of a college’s main allocation to go to student grants. CRRSAA, the second law, required the same dollar amount for student grants as a college’s original CARES Act student-aid award, not half of the new allocation. A larger second-round award therefore did not by itself raise the minimum a college had to give students, and the college could choose to give more.

Under the American Rescue Plan, public and private nonprofit colleges had to spend on student grants 50 percent of the allocation based on students who had not been enrolled exclusively in distance education before the emergency. The portion based on Pell recipients who had been exclusively enrolled in distance education had to go entirely to student grants. Education calculated each institution’s minimum student-grant amount. Those were rules for a college’s main allocation, the direct grants that made up 90 percent or more of each law’s funding, not a single split covering every program in the fund.

A separate 7.5 percent of HEERF funding in each law was available to minority-serving institutions. The American Rescue Plan allocation for proprietary, or for-profit, colleges was restricted to emergency financial-aid grants for students.

How students received and controlled their grants

Students could not apply for HEERF directly to Education and were instructed to contact their own institution for information and guidance.

Emergency student grants could cover any part of a student’s cost of attendance or coronavirus emergency expenses, including tuition, food, housing, health care and child care. Students determined how to use their grants within the allowed purposes.

A Department of Education rule on who could receive emergency grants took effect on May 14, 2021. Education had required a student to be eligible for the usual federal student-aid programs to receive a grant; the rule removed that requirement. It allowed people who were or had been enrolled at an eligible institution on or after the COVID-19 national emergency declaration to qualify. Education’s guidance expressly included undocumented and international students.

Colleges were instructed to prioritize students with exceptional need, including Pell recipients and students facing job loss, reduced income, or food or housing insecurity. In its review of grants, the Government Accountability Office (GAO), a federal watchdog, found that schools used financial need, access to food or housing, and sometimes enrollment status to determine grant amounts.

Colleges could not automatically apply a student’s emergency grant to an unpaid campus balance without the student’s affirmative written or electronic consent. A college could not make continued or future enrollment a condition of receiving an emergency student grant. It also could not require consent to paying an outstanding balance as a condition of grant eligibility.

The Internal Revenue Service said students did not have to include qualifying COVID-19 emergency student grants in their federal taxable income.

What colleges could do with their share

Institutional funds could not be used for marketing or recruitment, endowments, or capital projects involving athletics, sectarian instruction or religious worship.

Under the American Rescue Plan, public and nonprofit institutions that did not use their entire institutional share for student grants had to devote a portion to evidence-based coronavirus monitoring and suppression. They also had to conduct outreach about financial-aid adjustments after unemployment or other changed family circumstances.

Education allowed colleges to cancel institutional student debt and reimburse themselves for the lost revenue using institutional HEERF funds. The guidance described this as a way for students to reenroll, continue their education, obtain transcripts or transfer. This route was different from taking a student grant and applying it to a bill: the institutional share absorbed the loss.

GBH, a news outlet, reported on June 28, 2021, that Quinsigamond Community College in Worcester, Massachusetts, had used $2.5 million of what the report called federal relief to forgive balances owed by nearly 1,687 students. Those students had owed the college an average of $1,525. The college identified that $2.5 million as institutional HEERF money used for student debt forgiveness. Debt relief was an immediate financial result; whether a particular student returned to class was a separate outcome.

A Department of Education overview of colleges’ 2022 annual reports said 70 percent of institutions reported that HEERF let them continue planned programs that pandemic-related factors had put at risk. Almost 70 percent said it enabled them to retain faculty, staff, employees and contractors at full salary.

What the record shows about student outcomes

Colleges gave 12.7 million students $19.5 billion in grants in 2021, the Education overview of their annual reports said. In 2022, they distributed $7.9 billion in emergency grants to more than seven million students. The two annual counts should not be added and treated as a count of different people: the same student could appear in both years.

In the same report, more than 90 percent of institutions indicated that HEERF helped keep students enrolled who were at risk of dropping out for pandemic-related reasons. Seventy-three percent indicated that supplying electronic devices and internet access helped keep students enrolled. Those responses describe institutions’ assessment of what aid enabled, rather than measuring how many students would have left without it.

A July 2023 study by Western Governors University (WGU) and WGU Labs tried to measure the aid’s effect on graduation among the university’s own students. It examined aid from the fund’s third wave, known as HEERF III, which was part of the American Rescue Plan. The university’s largest allocation was available across departments to students whose expected family contribution, a financial-need measure, was $500 or less. The researchers compared graduation rates for students just below and just above a financial-aid eligibility cutoff. Comparing otherwise similar students near a cutoff gives a different kind of evidence from asking recipients whether funding helped.

For that institution-wide distribution, WGU Labs reported an 11.2 percent increase in graduation at 12 months and no effects on loan amounts borrowed. It does not establish that every college’s aid policy produced the same result, or that every dollar of institutional funding had the same effect.

Reporting duties and oversight gaps

HEERF III recipients had to continue public quarterly reporting for both institutional funds and the student-aid portion. Education’s guidance called for annual reports from HEERF III recipients covering the uses of those funds and any remaining money from the earlier rounds.

Education required recipients to keep grant financial records and supporting documents for three years after the last quarterly or annual performance report. Its guidance also required submission of all applicable audits.

GAO reported that Education officials cited staffing and time constraints, together with the high volume of grants, for not regularly checking award amounts after committing funds. GAO recommended regular quality-assurance reviews to identify and correct errors, and Education agreed. The issue was control over the grant process, not a finding that every recipient had misspent its award.

Education’s Office of Inspector General found that the grant office had adopted some transparency and accountability controls but had not carried out or documented several key oversight activities. Beyond a measure of how quickly initial awards were made, the inspector general found no clear program performance goals or specific metrics for tracking college performance and program outcomes.

Past spending deadlines and present aid questions

The spending period for all HEERF grants still open was extended to June 30, 2023. Colleges approved for more time had until June 30, 2024, to spend institutional grant funds and until December 31, 2023, for student grant funds, according to the Office of Management and Budget’s May 2024 Compliance Supplement. All of those dates have passed.

The period that applied to a particular grant was stated in the institution’s most recent Grant Award Notification, the document setting out its award, according to the 2025 Compliance Supplement. Federal closeout rules require recipients to return unobligated funds that they received and are not authorized to retain. Closing an award means accounting for the money left over, rather than keeping it indefinitely as general-purpose funding.

The Consumer Financial Protection Bureau advises students to ask their financial-aid office questions and investigate the requirements of grants and scholarships. Ask the college which assistance is open for the relevant term, what expenses it covers and what application or eligibility requirements apply.