[Federal Register Volume 86, Number 53 (Monday, March 22, 2021)]
[Notices]
[Pages 15208-15209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05849]


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DEPARTMENT OF EDUCATION


Notice of Interpretation Regarding Period of Allowable Expenses 
for Funds Administered Under the Higher Education Emergency Relief 
(HEERF) Program

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Notice of interpretation.

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SUMMARY: The Department of Education (Department) is issuing this 
notice of interpretation regarding the allowable time period for which 
grantees may charge costs and lost revenue to their HEERF grant. That 
period is from March 13, 2020 onward.

DATES: This interpretation is effective March 22, 2021.

FOR FURTHER INFORMATION CONTACT: Karen Epps, U.S. Department of 
Education, 400 Maryland Avenue SW, Room 250-64, Washington, DC 20202. 
Telephone: The Department of Education HEERF Call Center at (202) 377-
3711. Email: [email protected]. Please also visit our HEERF II website at: 
www2.ed.gov/about/offices/list/ope/crrsaa.html.
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:

Full Text of Announcement

    On March 13, 2020, President Trump declared a national emergency to 
respond to the novel coronavirus (COVID-19) outbreak, under section 
501(b) of the Stafford Act. Declaring a National Emergency Concerning 
the Novel Coronavirus Disease (COVID-19), 85 FR 15337. Soon thereafter, 
on March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and 
Economic Security (CARES) Act, Public Law 116-136, to help Americans 
during the economic and health crises created by the COVID-19 outbreak. 
Among its many provisions, the CARES Act provided the Department with a 
$14.2 billion appropriation designated as the Higher Education 
Emergency Relief Fund (HEERF) to be distributed to eligible 
institutions of higher education (IHEs) to ``prevent, prepare for, and 
respond to coronavirus.''
    In the midst of this continued crisis, on December 27, 2020, 
President Trump signed into law the Coronavirus Response and Relief 
Supplemental Appropriations Act, 2021 (CRRSAA) (Pub. L. 116-260). This 
law made available an additional $22.7 billion for IHEs under the HEERF 
programs, with funding appropriated for the existing (a)(1), (a)(2), 
and (a)(3) programs previously authorized under the CARES Act, as well 
as funding for a new (a)(4) program authorized under the CRRSAA.
    Section 314(c) of the CRRSAA provides the following allowable uses 
for funds made available through that appropriation:
    (1) Defray expenses associated with coronavirus (including lost 
revenue, reimbursement for expenses already incurred, technology costs 
associated with a transition to distance education, faculty and staff 
trainings, and payroll);
    (2) Carry out student support activities authorized by the Higher 
Education Act of 1965, as amended, that address needs related to 
coronavirus; or
    (3) Provide financial aid grants to students.
    Additionally, section 314(d)(2) of the CRRSAA extended the 
allowable use provisions listed above to any of an IHE's unspent CARES 
Act funds.
    In its initial analysis regarding the allowability of pre-award 
costs for grants made newly available under the CRRSAA, the Department 
took the position that obligations under CRRSAA grants needed to have 
been incurred on or after December 27, 2020, the date of the enactment 
of the CRRSAA. For new or supplemental funding awarded under CRRSAA, 
this position was memorialized in the IHE's Certification and Agreement 
or Supplemental Agreement, respectively, as well as the Grant Award 
Notification document connected with the obligation of such funds.
    The Department is committed to extending all available 
flexibilities that may be authorized by law to grantees under the HEERF 
programs as IHEs continue to grapple with the financial consequences of 
COVID-19. Many IHEs are facing severe budget shortfalls as a result of 
decreased enrollment, tuition discounting, declining international 
student enrollment, and the loss of revenue from food service and 
dormitories.\1\ These shortfalls are forcing IHEs to consider hiring 
freezes, layoffs, operating budget cuts, and suspending certain degree 
programs.\2\
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    \1\ www.insidehighered.com/quicktakes/2021/02/09/colleges-could-lose-183-billion-during-pandemic.
    \2\ www.cbpp.org/research/state-budget-and-tax/states-can-choose-better-path-for-higher-education-funding-in-covid; 
www.nytimes.com/2020/10/26/us/colleges-coronavirus-budget-cuts.html.
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    In recognition of the considerable financial strain faced by the 
higher education community, the Department is issuing this notice of 
interpretation to allow IHEs to charge pre-award costs for their 
unspent CARES Act and CRRSAA funds back to March 13, 2020, for expenses 
associated with COVID-19. The Department finds textual support for 
revisiting its position within the allowable uses enumerated within 
CRRSAA section 314(c)(1), which explicitly include ``lost revenue'' and 
``reimbursement for expenses already incurred.'' The Department 
believes that allowing grantees to recover pre-award costs back to 
March 13, 2020, is consistent with the intent of Congress and 
authorized by the law, and this will allow IHEs to target their areas 
of financial need more directly with HEERF program funding.
    This notice of interpretation supersedes in part all previous 
guidance, agreements, and grant award documents to provide IHEs with 
the expanded flexibility to charge pre-award costs back to March 13, 
2020. To further provide flexibility to IHEs, the Department also 
concurrently waives the requirement for prior written approval of pre-
award costs, in accordance with 2 CFR 200.407. We will also issue 
letters through our G5 system to directly notify grantees of this 
change of interpretation. Grantees are not required to take any action 
to take advantage of this expanded period of expenditures flexibility 
but are encouraged to maintain a copy of this notice within your HEERF 
grant files as additional support for auditing purposes. The Department 
will make publicly available any additional guidance on this topic on 
its CRRSAA: Higher Education Emergency Relief Fund (HEERF II) 
website(https://www2.ed.gov/about/offices/list/ope/crrsaa.html).
    The Department continues to encourage IHEs to focus on the needs of 
their students in assessing how best to utilize HEERF funding. While 
some IHEs may need to use their HEERF grant to pay for expenses 
incurred earlier in the pandemic, other IHEs may look forward and focus 
on how best to provide student support to keep their students enrolled 
and academically engaged throughout the pandemic. The Department hopes 
that the expanded flexibilities announced in this notice

[[Page 15209]]

will help all IHEs to best serve the needs of their students, faculty, 
and staff. Accessible Format: On request to the program contact person 
listed under FOR FURTHER INFORMATION CONTACT, individuals with 
disabilities can obtain this document in an accessible format. The 
Department will provide the requestor with an accessible format that 
may include Rich Text Format (RTF) or text format (txt), a thumb drive, 
an MP3 file, braille, large print, audiotape, or compact disc, or other 
accessible format.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations at www.govinfo.gov. At this site you can view this 
document, as well as all other documents of this Department published 
in the Federal Register, in text or Portable Document Format (PDF). To 
use PDF, you must have Adobe Acrobat Reader, which is available free at 
the site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

Tiwanda Burse,
Deputy Assistant Secretary for Management & Planning, Office of 
Postsecondary Education. Delegated authority to perform functions and 
duties of the Assistant Secretary for the Office of Postsecondary 
Education.
[FR Doc. 2021-05849 Filed 3-19-21; 8:45 am]
BILLING CODE 4000-01-P