[Federal Register Volume 86, Number 92 (Friday, May 14, 2021)]
[Rules and Regulations]
[Pages 26608-26631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10190]



[[Page 26607]]

Vol. 86

Friday,

No. 92

May 14, 2021

Part II





Department of Education





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34 CFR Parts 668 and 677





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Eligibility To Receive Emergency Financial Aid Grants to Students Under 
the Higher Education Emergency Relief Programs; Final Rule

  Federal Register / Vol. 86 , No. 92 / Friday, May 14, 2021 / Rules 
and Regulations  

[[Page 26608]]


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DEPARTMENT OF EDUCATION

34 CFR Parts 668 and 677

[Docket ID ED-2020-OPE-0078]
RIN 1840-AD62


Eligibility To Receive Emergency Financial Aid Grants to Students 
Under the Higher Education Emergency Relief Programs

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Final regulations.

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SUMMARY: The Secretary amends the Department of Education regulations 
so that an institution of higher education (IHE) may appropriately 
determine which individuals currently or previously enrolled at an 
institution are eligible to receive emergency financial aid grants to 
students under the Higher Education Emergency Relief programs, as 
originally enacted under the Coronavirus Aid, Relief, and Economic 
Security (CARES) Act (March 27, 2020).

DATES: This rule is effective on May 14, 2021.

FOR FURTHER INFORMATION CONTACT: Karen Epps, U.S. Department of 
Education, 400 Maryland Avenue SW, Room 2B133, Washington, DC 20202. 
Telephone: (202) 377-3711. Email: [email protected]. 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:

Executive Summary

Purpose of This Regulatory Action

    On March 27, 2020, Congress enacted the CARES Act, Public Law 116-
136, to help the nation cope with the economic and health crises 
created by the novel coronavirus disease (COVID-19) outbreak. Section 
18004 of the CARES Act establishes the Higher Education Emergency 
Relief Fund (HEERF) and instructs the Secretary to allocate funding to 
eligible IHEs in connection with the COVID-19 outbreak. Section 
18004(c) states that institutions must use at least 50 percent of their 
allocations ``to provide emergency financial aid grants to students for 
expenses related to the disruption of campus operations due to 
coronavirus (including eligible expenses under a student's cost of 
attendance, such as food, housing, course materials, technology, health 
care, and child care).''
    Neither section 18004(c) nor any other part of the CARES Act 
defines the term ``student'' or the phrases ``grants to students'' or 
``emergency financial aid grants to students.''
    On June 17, 2020, the Department published an interim final rule 
(IFR) in the Federal Register (85 FR 36494), in which, for purposes of 
the phrases ``grants to students'' and ``emergency grants to students'' 
in section 18004(a)(2), (a)(3), and (c) of the CARES Act, ``student'' 
was defined as an individual who is, or could be, eligible under 
section 484 of the Higher Education Act of 1965, as amended (HEA), to 
participate in programs under title IV of the HEA.
    Upon further consideration and in response to public comments, the 
Department is removing the requirement that a student must be eligible 
for title IV aid to receive financial assistance under the HEERF 
programs and clarifying in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be eligible for title IV student aid (referred 
to herein as ``title IV eligible'') to receive a HEERF student grant, 
the Department removed the definition of ``student'' from the general 
provisions regulations that apply to student assistance under the title 
IV programs and relocated the revised definition to 34 CFR part 677, 
which governs the HEERF programs.

Summary of the Major Provisions of This Regulatory Action

    The final regulations define ``student,'' for purposes of the 
phrases ``grants to students,'' ``emergency financial aid grants to 
students,'' and ``financial aid grants to students'' as used in the 
HEERF programs, as any individual who is or was enrolled (as defined in 
34 CFR 668.2) at an eligible institution (as defined in 34 CFR 600.2) 
on or after March 13, 2020, the date of declaration of the national 
emergency concerning the novel coronavirus disease. This definition 
enables an IHE to appropriately determine which individuals currently 
or previously enrolled at an institution are eligible to receive 
emergency financial aid grants to students under the HEERF programs, as 
originally enacted under the CARES Act and continued through the 
Coronavirus Response and Relief Supplemental Appropriations Act, 2021 
(CRRSAA) (Pub. L. 116-260) and American Rescue Plan Act of 2021 (ARP) 
(Pub. L. 117-2).

Costs and Benefits

    The emergency funds available under CARES, CRRSAA, and ARP are 
provided to allow students and institutions to cope with expenses 
related to the COVID-19 pandemic. The broader definition of ``student'' 
adopted in these final regulations ensures those affected by COVID-19 
expenses may access funding and continue their education and simplifies 
the administrative burden on institutions. The Department estimates 
that applying for the funds will cost students $22.4 million and 
administering the funds will cost institutions approximately $1.2 
million. Transfers from the Federal Government total $76.2 billion, of 
which $31.5 billion must be used for emergency grants to students.
    Background: On March 27, 2020, Congress enacted the CARES Act, 
Public Law 116-136, to help the nation cope with the economic and 
health crises created by the COVID-19 outbreak. Section 18004 of the 
CARES Act establishes the HEERF and instructs the Secretary to allocate 
funding to eligible IHEs in connection with the COVID-19 outbreak. 
Section 18004(c) states that institutions must use at least 50 percent 
of their allocations ``to provide emergency financial aid grants to 
students for expenses related to the disruption of campus operations 
due to coronavirus (including eligible expenses under a student's cost 
of attendance, such as food, housing, course materials, technology, 
health care, and child care),'' implicitly allowing institutions to use 
more than 50 percent of their funds for this purpose. Finally, section 
18004(e) requires institutions to submit reports to the Secretary 
describing how the funds were used under the section and authorizes the 
Secretary to specify the time and manner of such reporting.
    Neither section 18004(c) nor any other part of the CARES Act 
defines the term ``student'' or the phrases ``grants to students'' or 
``emergency financial aid grants to students.'' In the IFR, the 
Department concluded that Congress intended the category of those 
students eligible for ``emergency financial aid grants to students'' in 
section 18004 of the CARES Act to be limited to those individuals 
eligible for title IV aid.
    The Department considered a number of factors in reaching this 
conclusion. For one, the Department was concerned at the time it issued 
its IFR that an interpretation of ``student'' in ``emergency financial 
aid grants to students'' that was broad enough to cover anyone engaged 
in learning, or anyone enrolled in any way at an institution, or anyone 
enrolled full-time

[[Page 26609]]

at an institution in a program leading to a recognized postsecondary 
credential, would not be consistent with existing law independent of 
title IV status. Certain individuals without qualifying immigration 
statuses are already prohibited, under 8 U.S.C. 1611(a), from receiving 
any ''Federal public benefit,'' and this prohibition applies 
``[n]otwithstanding any other provision of law[,]'' unless certain 
other exceptions are met under 8 U.S.C. 1611(b). Section 1611(c) 
defines ``Federal public benefit'' to include (a) ``any grant . . . 
provided by an agency of the United States or by appropriated funds of 
the United States,'' and (b) ``any . . . postsecondary education . . . 
benefit . . . for which payments or assistance are provided to an 
individual . . . by an agency of the United States or by appropriated 
funds of the United States.'' The Department originally stated in the 
IFR that this prohibition applies to the HEERF funds.
    On the other hand, the Department concluded that a narrower 
interpretation of the term ``student'' in the phrase ``emergency 
financial aid grants to students''--for example, to cover only the 
group that received Federal Pell Grants as referenced in section 
18004(a)(1)(A)--would be overly restrictive and less supportable under 
the language of the CARES Act. As such, the Department originally 
advanced within the IFR its belief that Congress intended that HEERF 
grants to students under the CARES Act be limited to those students who 
are eligible to participate in the title IV programs.
    The Department's IFR was challenged in a series of lawsuits, where 
plaintiffs argued that the Department's position improperly excluded 
otherwise eligible students from crucial emergency aid amid the global 
pandemic. In each of these suits, plaintiffs prevailed on the title IV 
issue. In Oakley v. DeVos, No. 4:20-cv-03215-YGR, ECF No. 44, the U.S. 
District Court for the Northern District of California enjoined the 
Department from enforcing any eligibility requirement for students to 
receive HEERF emergency financial aid grant, including title IV's 
eligibility criteria and applicable restrictions under 8 U.S.C. 1611(a) 
``with respect to any community college in California.'' Similarly, the 
U.S. District Court for the Eastern District of Washington enjoined the 
Department's title IV restrictions (though not the application of 8 
U.S.C. 1611(a)) as to IHEs in the State of Washington. Washington v. 
DeVos, No. 2:20-cv-00182-TOR, ECF No. 31, 63. Decisions in Noerand v. 
Devos, Civil No. 20-11271-LTS (D. Mass. Jul. 24, 2020) and 
Massachusetts v. DeVos, No. 1:20-cv-11600-LTS, ECF No. 3, similarly 
found that limiting HEERF grant to ``students eligible under Title IV 
would lead to absurd results[,]'' and additionally concluded that the 
CARES Act ``constitutes a statutory exception to Section 1611's general 
denial of federal public benefits.'' These findings are consistent with 
the public comments received.
    Along with taking stock of these legal decisions, the Department 
began the process of reviewing the substantial number of public 
comments it received on the IFR that requested the Department to amend 
its definition of ``student'' for the purposes of HEERF grants to 
students. Of the 4,149 public comments the Department received, less 
than 10 were written in support of the Department's restrictions on 
HEERF student grant eligibility, and even those limited public comments 
were more focused on support for the concept of ``emergency financial 
aid grants'' for students with costs associated with the coronavirus 
rather than the restrictions articulated in the IFR itself.
    Subsequently, on December 27, 2020, former 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 approximately $22.7 billion for IHEs under 
HEERF programs (referred to herein as HEERF II or CRRSAA funding), with 
funding appropriated for the existing (a)(1), (a)(2) and (a)(3) 
programs previously authorized under Section 18004 of the CARES Act, as 
well as funding for a new (a)(4) program authorized under the CRRSAA. 
As with the CARES Act, the CRRSAA authorized, and in some cases 
required, institutions to use their HEERF award for ``financial aid 
grants to students,'' without defining the terms ``students'' or 
``financial aid grants.'' See CRRSAA section 314(c)(3). However, unlike 
the CARES Act, CRRSAA directed that in ``making financial aid grants to 
students, an institution of higher education shall prioritize grants to 
students with exceptional need[.]'' See id. As a result of this new 
requirement of how institutions must distribute HEERF II financial aid 
grants to students, the Department announced in question 16 of the 
HEERF II Public and Private Nonprofit Institution (a)(1) Programs (CFDA 
84.425E and 84.425F) Frequently Asked Questions published January 14, 
2021, and updated March 19, 2021, (https://www2.ed.gov/about/offices/list/ope/updatedfaqsfora1crrssaheerfii.pdf) that the definition of 
student in the IFR would not apply to funds under the CRRSAA.
    Finally, on March 11, 2021, President Biden signed into law the 
American Rescue Plan Act of 2021 (ARP) (Pub. L. 117-2). This bill 
provided an additional approximately $39.6 billion for the HEERF 
programs (HEERF III or ARP funding) and retained the same 
prioritization requirement for ``students with exceptional need'' as 
was contained in CRRSAA. Again, ARP did not define the term ``student'' 
or ``financial aid grants.''
    In this final rule, we are revising the definition of ``student'' 
to make clear that any individual who is or was enrolled at an eligible 
institution on or after the date the national emergency was declared 
for COVID-19 may qualify for assistance under HEERF program 
requirements. Because an individual is no longer required to be title 
IV eligible in order to receive a HEERF student grant, we are removing 
the definition of ``student'' from the general provisions regulations 
that apply to student assistance under the title IV programs and 
relocating the revised definition to 34 CFR part 677, which governs the 
HEERF programs.
    The Department adopts this change for several reasons. Upon further 
review and in consideration of the comments received in response to the 
IFR, first we believe that adopting a definition of ``student'' that is 
not limited to title IV eligibility better reflects Congress's intent 
when it created the portion of the Higher Education Emergency Relief 
Fund that goes to students in the CARES Act. Congress created a program 
that was designed to award emergency financial aid grants in the most 
expedient way possible without the establishment of unnecessary 
roadblocks that would slow down the ability of institutions to help 
students address added expenses stemming from the COVID-19 national 
emergency. Defining ``student'' to mean anyone who is or was enrolled 
at an eligible institution gives institutions of higher education 
maximal flexibility to focus on identifying the students they think are 
most in need of help instead of getting tied down in checking 
eligibility criteria.
    By contrast, a definition of ``student'' tied to eligibility for 
title IV financial aid would result in significant additional 
roadblocks and delays. It would require institutions to encourage 
students to complete the Free Application for Federal Student Aid 
(FAFSA) and then process those applications before being able to award 
aid. If an institution decided to create its own form, it would have to 
find ways to verify various eligibility requirements for title IV aid, 
which would also be

[[Page 26610]]

time consuming if not impossible to do without using the FAFSA. For 
instance, institutions would need to find ways to verify that students 
had valid Social Security numbers or were otherwise eligible 
noncitizens, which could mean checking with the Social Security 
Administration or the Department of Homeland Security. Institutions 
would also need to ensure male students had registered with the 
Selective Service. Students filling out the FAFSA, meanwhile, could 
face additional burdens, such as the verification process. These 
concerns could particularly be an added burden for veterans because 
they are less likely to complete the FAFSA because they receive 
benefits from other Federal agencies. Students may also be confused and 
think they need to qualify for need-based title IV aid to receive 
emergency grants and not apply when they do need the funds. Finally, 
because colleges are not required to award emergency grants to all 
students, there are some individuals who could end up taking on the 
burden of completing the FAFSA and ultimately not receive any further 
assistance.
    Second, a simpler definition of ``student'' ensures that colleges 
can assist any student harmed by the COVID-19 national emergency. Data 
show that the past year has wrought disproportionate negative effects 
on low-income individuals, individuals of color, and the communities in 
which they reside.\1\
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    \1\ https://www.nber.org/system/files/working_papers/w27392/w27392.pdf.
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    These funds are available to respond to the effects of an 
unexpected and once-in-a-century pandemic. No student could have 
reasonably foreseen or planned for the substantial added expenses he or 
she is facing because of the COVID-19 national emergency. For some, 
that may mean lost jobs or reduced wages. For others it could mean 
sudden and unexpected needs to travel home, while others may face added 
expenses by not being able to go home at all. Students who were once in 
stable financial situations could now find themselves in need of 
significant support. Those who were economically hurting before may be 
even worse off. The definition of ``student'' in this final rule allows 
an institution of higher education that knows its individual students 
better than the Department ever could to make the proper decisions 
about who needs the support. As institutions make these decisions, we 
note that the distribution of HEERF emergency financial aid grants must 
prioritize grants to students with exceptional need, such as students 
who receive Pell Grants, and must not be distributed in a manner that 
excludes individuals on the basis of race, color, national origin, 
disability, or sex. See, e.g., 42 U.S.C. 2000(c)-(d) (Title IV and 
Title VI), 29 U.S.C. 701 et seq., 20 U.S.C. 1681 (Title IX).
    Third, the Department now recognizes it would be inappropriate to 
apply the definition of ``student'' originally articulated in the IFR 
because the Department no longer considers that a student would need to 
be eligible for Federal financial aid under title IV of the Higher 
Education Act. The Department is changing its position on this issue 
after being persuaded by commenters that the requirement in the CARES 
Act that the Department award funds using the same mechanisms used to 
distribute title IV aid as well as saying that funds could go to any 
portions of a student's cost of attendance do not provide compelling 
evidence that emergency grants should therefore only be limited to 
students eligible for title IV financial aid. When Congress created 
these funds, it indicated they should be awarded to institutions 
through the same mechanisms used to distribute title IV financial aid. 
We believe this decision indicated a Congressional preference for using 
a process that institutions are already familiar with, rather than an 
entirely new mechanism, in order to expedite the distribution of funds. 
We do not believe this procedural decision reflects an indication that 
fund distribution must be restricted only to those eligible for title 
IV financial aid. Congress created a special distribution formula for 
the funds instead of relying on existing ones used for campus-based 
aid. It gave institutions discretion over how to award funds instead of 
spelling out eligibility criteria. While Congress did ask that these 
funds be awarded through the same mechanisms used to distribute title 
IV financial aid, that language signaled intent that these funds should 
not go through a complicated new award process. Similarly, while the 
CARES Act does state that emergency financial aid grants can go to any 
part of a student's cost of attendance as defined under the Higher 
Education Act, this is a concept that is not limited to recipients of 
title IV aid. The cost of attendance is a commonly used way of 
disclosing the price of education to students and the public on 
institutional websites and is a broadly used term of art that Congress 
adopted to make the funds available for a wide array of purposes while 
also ensuring that they would cover expenses related to attending 
postsecondary education. Finally, the agreement that institutions of 
higher education must sign to receive their student portion of funding 
states that ``[t]he Secretary does not consider these individual 
emergency financial aid grants to constitute Federal financial aid 
under Title IV of the HEA.'' The Department thus no longer believes 
that these aspects of the statute support its prior narrow definition 
of ``student.''
    Fourth, the time-limited and exceptional nature of these funds also 
justifies a more flexible approach to defining eligibility. Barring 
further Congressional action, funds for emergency financial aid will 
not be a recurring source of support. No student in the future could 
reasonably expect to be able to enroll in postsecondary education 
solely to receive this help, just as they could not have expected that 
such funds would have been available in the first place. This is a 
once-in-a-century pandemic, and the effects are clearly felt worse by 
low-income individuals as well as individuals of color and the 
communities in which they reside. The emergency financial aid grants 
are not a recurring source of support--they are a crucial response to 
an unprecedented time and are time limited in their use and not 
expected to recur.
    Fifth, Congress was explicit in other parts of the CARES Act where 
it did want greater limitations placed on the availability of other 
forms of assistance, such as when it noted that nonresident aliens were 
ineligible for individual recovery rebates. The fact that it chose to 
specifically delineate eligibility in other parts of the CARES Act but 
did not do so for the emergency financial aid grants implies a desire 
for broad and unconditional eligibility.
    Sixth, adopting a broad definition of student aligns the 
eligibility terms with the formula used to calculate allocations for 
institutions of higher education. Congress created an allocation 
formula that, while varying between the CARES Act, CRRSAA, and ARP, has 
always taken into consideration an institution's enrollment of full-
time equivalent ``students'' without regard to their immigration 
status--including if they were undocumented or international students. 
See CARES Act section 18004(a)(1); CRRSAA section 314(a)(1); ARP 
section 2003. Adopting a more restrictive definition of ``student'' for 
eligibility that excludes those same students who Congress sought to 
include in the allocation formula would lead to establishing two 
different definitions of the term ``student'' and add to confusion. 
Moreover, the definition of student in this final rule

[[Page 26611]]

avoids the situation in which a student's attendance at a college would 
have affected the amount of money available to it through HEERF but 
they were then not eligible to receive any of those funds.
    Seventh, while it is important the Department of Education 
(Department) be concerned with waste, fraud, and abuse, we no longer 
believe a definition of student tied to eligibility for title IV 
financial aid would be an effective way to address those issues. There 
are already requirements in place to prevent institutions of higher 
education from offering incentive-based compensation to recruiters as a 
way of dissuading overly aggressive attempts to bring in students. 
Private for-profit institutions are subject to a requirement in which 
they demonstrate that they obtain a certain share of their revenue from 
sources other than the Department's title IV programs. See 34 CFR 
668.14(b)(16), 668.28. Institutions themselves, meanwhile, must 
administer a Satisfactory Academic Progress (SAP) policy to ensure 
students are moving toward completion of their programs. 34 CFR 668.34. 
This is in addition to the fact that the HEERF programs explicitly 
prohibit institutions of higher education from using the funds they 
receive for providing pre-enrollment recruitment activities. See CARES 
Act section 18004(c), CRRSAA section 314(d)(3).
    In sum, Congress established a flexible, time-limited fund to 
respond to an unexpected and once-in-a-century national emergency. It 
passed emergency legislation to create a program for assisting students 
in a rapid manner by delegating significant discretion to colleges so 
they can get the funds to affected individuals right away. The novel 
coronavirus does not choose to limit its effects based upon whether a 
student qualifies for title IV aid. Instead, it has disproportionately 
brought devastation to individuals who were already in the most 
precarious places in American society, particularly low-income students 
and families, students and families of color across the country.\2\ 
Adopting a broad and simple definition of a ``student'' allows the 
emergency grant funds for students to maximize their purpose and fully 
live up to Congressional intent.
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    \2\ https://news.harvard.edu/gazette/story/2020/10/covid-carries-triple-risks-for-college-students-of-color/; https://www.insidehighered.com/news/2020/09/30/undocumented-college-students-report-heightened-anxieties-about-legal-status-and
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    Public Comment: In response to our invitation in the interim final 
rule (IFR), 4,149 parties submitted comments on the IFR. In this 
preamble, we respond to those comments, which we have grouped by 
subject. Generally, we do not address technical or other minor changes.
    Analysis of Comments and Changes: An analysis of the public 
comments and of changes since publication of the IFR follows.

General Support

    Comments: Some commenters supported the definition of ``student'' 
in the IFR that restricted individuals who qualify for HEERF grants to 
those that are eligible for title IV financial assistance. One 
commenter believed that the restrictive definition was appropriate and 
clearly explained, while another commenter stated that even with the 
restrictions placed in the definition, HEERF grants would still be able 
to help students.
    Discussion: As discussed more thoroughly in this preamble, in view 
of the comments objecting to the definition of ``student'' in the IFR, 
and District Court rulings regarding the IFR, we have removed the 
prerequisite that a student must be eligible for title IV aid to 
receive funds under the HEERF programs.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we have removed the definition of ``student'' from the 
general provisions regulations that apply to student assistance under 
the title IV programs and relocated the revised definition to 34 CFR 
part 677, which governs the HEERF programs.

General Opposition

    Comments: Several commenters believed that limiting HEERF grants to 
title IV eligible students is contrary to the purposes of the CARES Act 
to provide emergency relief to institutions and students who need 
support during the pandemic. The commenters noted that students across 
the country need relief to overcome the financial devastation brought 
on by the coronavirus pandemic, and that Congress passed the CARES Act 
to provide wide-scale relief directly to students as quickly as 
possible. The commenters argued that requiring students to demonstrate 
eligibility for Federal financial aid will (1) disproportionately harm 
minority and immigrant communities, (2) impose additional burdens and 
hurdles on students to show they are title IV eligible, and (3) create 
unnecessary delays in providing needed assistance to desperate 
students. For these reasons, the commenters urged the Department to 
immediately withdraw the IFR.
    Echoing these concerns, other commenters admonished the Department 
for using immigration status, instead of need, as a basis for 
establishing eligibility for HEERF grants. Some of those commenters 
noted that all individuals, including undocumented students with or 
without Deferred Action for Childhood Arrivals (DACA) status, have the 
right to basic levels of safety, health, and security, but argued the 
IFR ensures that those already shut out from these basic rights will 
fall further behind. In addition, commenters believed that the IFR (1) 
will exclude non-degree seeking students and students enrolled in 
short-term certificate programs, and (2) is a cruel, confusing, and 
counterproductive policy that will exclude large numbers of low-income, 
Black, and Latino students, as well as veterans and noncitizens. The 
commenters urged the Department to immediately withdraw the IFR.
    Some commenters believed that Latino and immigrant students would 
be disproportionately affected by the IFR, citing Oakley v. DeVos, No. 
20-cv-03215-YGR (N.D. Cal. June 17, 2020). The commenters argued that 
many immigrant students (Dreamers with or without DACA status, other 
students with undocumented status, and those with Temporary Protected 
Status, U-visas, or pending asylum applications) would not receive 
assistance to continue their education or cover necessities, such as 
food, housing, and healthcare. The commenters stated that these 
students: (1) Are experiencing the same economic hardship due to the 
pandemic as their peers, if not more; (2) come from communities that 
are among the most harmed by the COVID-19 pandemic; (3) may be much 
more susceptible to contracting and dying from COVID; and (4) are also 
excluded from many existing State and Federal assistance programs that 
could provide COVID-19 relief. The commenters urged the Department to 
immediately withdraw the IFR.
    Some commenters believed that the IFR's restrictions will deprive 
many students, who otherwise demonstrate significant need during the 
COVID-19 crisis, from receiving assistance, thereby jeopardizing not 
only their health, safety, and education, but also the continuity of 
higher education

[[Page 26612]]

communities. The commenters noted that the definition of ``student'' 
should include students in default on a loan issued by the Department, 
students who are not making satisfactory progress, and certain 
noncitizens and students without Social Security numbers, including 
undocumented students.
    Other commenters believed that the Department understated the 
number of individuals who would be excluded from receiving HEERF grants 
under the IFR. Whereas the Department estimated that the IFR would 
exclude more than 1.12 million noncitizens, the commenters stated there 
are many other students who are ineligible for title IV aid on 
different grounds, and that many of those students are experiencing 
urgent economic challenges stemming from the pandemic and need 
assistance. In addition, one commenter stated that the IFR would 
exclude as many as 800,000 students in one State's community college 
system, including veterans, citizens who have not completed a Federal 
financial aid application, and noncitizens, including undocumented 
students. According to the commenters, those 800,000 students would 
represent over half of the approximate 1.5 million students enrolled in 
the State community college system during the Spring 2020 semester.
    Several commenters noted that institutions still have HEERF funds 
available and would distribute some of those funds to students who are 
otherwise ineligible under the IFR.
    Another commenter believed that a more inclusive approach to 
eligibility would serve the educational policy goal of more diverse 
college educational learning environments, which was recognized by the 
Supreme Court as a compelling government interest in Grutter v. 
Bollinger. Similarly, other commenters argued that the IFR would 
undermine efforts to foster racial equity, diversity, and inclusion on 
college campuses, and make the playing field more uneven for 
undocumented students and more difficult for colleges and universities 
to meet their educational and moral obligations to students of color, 
students with low incomes, undocumented students, and otherwise 
marginalized students.
    Discussion: We agree with the general sentiment of the commenters 
that, without financial assistance from HEERF grants, some students may 
be adversely affected or may not be able to continue their education. 
Part of the Department's core mission is to ensure equal access. In 
that regard, as a policy and ethical matter, and in light of other 
comments addressed below and the policy further explained earlier in 
this preamble, we are compelled to reverse a decision that denies 
financial assistance to our most needy and vulnerable students.
    An institution that has HEERF funds available from the CARES, 
CRRSAA, or ARP, may, as of the effective date of this final rule, use 
those funds to provide financial assistance to any student who is 
enrolled at the institution or was enrolled at the institution during 
the COVID-19 emergency.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we are removing the definition of ``student'' from the 
general provisions regulations that apply to student assistance under 
the title IV programs and relocating the revised definition to 34 CFR 
part 677, which governs the HEERF programs.
    Comments: Several commenters objected to the IFR on moral grounds, 
arguing that, at this time of crisis, the Department should not be 
denying assistance to vulnerable individuals.
    Some commenters noted that, prior to the IFR, the Department 
encouraged institutions to award emergency grant funds to students with 
the greatest need, but by subsequently changing course and narrowing 
the eligibility requirements for those funds in the IFR, the commenters 
opined the Department promulgated a cruel and ideologically motivated 
rule that will hurt some of our Nation's most vulnerable college 
students.
    Other commenters asserted that for many students, receiving a few 
hundred dollars to purchase a laptop or help pay rent can make the 
difference between completing their coursework or dropping out. The 
commenters argued that by excluding students who are ineligible for 
title IV aid, the Department has denied assistance to many students who 
have the greatest financial need and are among the least likely to find 
help elsewhere.
    Several commenters asserted that many students who are not eligible 
for title IV aid and their families are struggling financially from 
employment issues stemming from the COVID-19 emergency. One commenter 
stated that many undocumented students enrolled at a community college 
have lost jobs in industries affected the most by COVID-19--healthcare, 
food service, and hospitality--and without income from these positions, 
students are struggling to pay for basic needs. Similarly, other 
commenters noted that due to the COVID-19 pandemic, many undocumented 
students or their spouses and children who had lost jobs were 
ineligible for a Recovery Rebate check under the CARES Act. Other 
commenters stated that minority communities have disproportionately 
record levels of unemployment, noting that among Hispanic and Latino 
individuals, the unemployment rate jumped to 18.9 percent in April 
2020, dropping only slightly to 17.6 percent in May 2020, and 14.5 
percent in June 2020. In addition, the commenters stated that some of 
those students are the sole provider in their homes because of the 
COVID-19 pandemic, as family members have lost jobs.
    Some commenters noted that many immigrant and other students who 
are not eligible for title IV aid face unique challenges, such as a 
lack of health insurance, and those students are also suffering 
disproportionate health effects from the pandemic. The commenters 
stated that as of 2017, 94 percent of DACA recipients were Hispanic and 
minority communities in the United States have been afflicted by COVID-
19 at disproportionate rates. According to the commenters, these health 
concerns are especially pronounced because many students who are not 
eligible for title IV aid are on the front lines of the COVID-19. The 
commenters asserted that these students are more likely to fall through 
the cracks of our medical system and lack basic safety net protections, 
making it more untenable to withhold aid. Similarly, other commenters 
argued that many students who are not eligible for title IV aid and 
their families are uninsured, noting that, as of 2018, more than four 
in ten undocumented immigrants (45 percent) were uninsured.
    Other commenters believed that undocumented students may help to 
mitigate shortages in the healthcare industry. The commenters stated 
that many undocumented graduate students hold degrees in STEM fields, 
with many having degrees in healthcare-related fields, which is 
critical to combat the nation's severe shortages resulting from the 
COVID-19 crisis.
    One commenter believed that title IV ineligible students, such as 
undocumented students, facing dire economic circumstances stemming from 
the pandemic may have to postpone or forego their higher education, 
absent funding from the CARES Act.

[[Page 26613]]

    Other commenters believed that undocumented students at community 
colleges are particularly disadvantaged. The commenters noted that over 
80 percent of undocumented students attend two- and four-year public 
colleges and universities, but undocumented students at community 
colleges are more likely than undocumented students at four-year 
colleges to face extremely high levels of financial stress. The 
commenters stated that many of these students come from families in 
poverty and thus are unable to rely on their parents for financial 
assistance and those students may have to support their families 
financially. According to the commenters, community colleges receive 
disproportionately smaller shares of emergency grant funding compared 
to other institutions and are thus unable to meet the needs of 
undocumented students.
    Discussion: Upon further review, we agree with the commenters that 
HEERF grants should be awarded based on need and should not consider 
title IV eligibility of students. As mentioned by the commenters, 
institutions may have awarded HEERF grants to students without 
qualification on a priority-need basis before the IFR was published. In 
the preamble to these final regulations, we fully explain our reasoning 
for taking a position aligned with the one taken in the Department's 
initial guidance by allowing institutions to award HEERF funds to any 
student who is enrolled or was enrolled at the institution during the 
COVID-19 emergency. In addition, as noted above, HEERF emergency 
financial aid grants must not be distributed in a manner that excludes 
individuals on the basis of race, color, national origin, disability, 
or sex. See, e.g., 42 U.S.C. 2000(c)-(d) (Title IV and Title VI), 29 
U.S.C. 701 et seq., 20 U.S.C. 1681 (Title IX).
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF program. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we have removed the definition of ``student'' from the 
general provisions regulations that apply to student assistance under 
the title IV programs and relocated the revised definition to 34 CFR 
part 677, which governs the HEERF programs.

Financial Burden on Students Ineligible for Title IV

    Comments: Several commenters asserted that in issuing the IFR the 
Department failed to consider the economic effect of excluding 1.12 
million undocumented students from eligibility for grants from HEERF 
funds. These commenters variously pointed to the lack of alternative 
funding available to such students resulting from the loss of campus 
jobs and internships, the collective ineligibility of undocumented 
immigrants to receive stimulus payments under the CARES Act's Recovery 
Rebate provision, the high levels of poverty among families headed by 
undocumented immigrants, and the disproportionate effect that the 
COVID-19 pandemic has had on these families as reasons for why the IFR 
is unfair in its effects.
    Other commenters argued that denying undocumented students access 
to funding under the HEERF programs would have a negative impact on 
society and the economy. These commenters suggested that students 
lacking title IV aid who, by extension, would be ineligible for grants 
from HEERF funds, may be forced to curtail studies, decreasing their 
chances of ever obtaining a postsecondary credential. Reduced earnings, 
underemployment, greater demand on public assistance, potential 
defaults on student loan debt, and lack of civic engagement were cited 
as examples of the increased societal burden the commenters viewed as 
likely to result from students being unable to complete degree 
programs.
    Finally, one commenter stressed the genuine desire of many 
institutions to do something for students who are not eligible to 
receive title IV funding and that it is unsound policy to prevent these 
students from accessing critical funding during a pandemic.
    Discussion: Upon further consideration, we agree with the 
commenters that the better policy involves greater consideration of the 
significant negative effects on students of restricting eligibility for 
grants from HEERF funds to those students who are title IV eligible. 
Moreover, we are convinced of the overall benefit to society, as well 
as the economic health of the country, accruing from enabling as many 
students as possible (including undocumented students) to continue with 
their studies during this difficult period. Inasmuch as funding under 
the HEERF programs is intended to assist students who are attending 
eligible institutions of higher education and who have incurred 
expenses related to the COVID-19 pandemic, the Department believes that 
providing institutions with the latitude to offer such assistance to 
all students is an imperative. Accordingly, we have revised the interim 
final rule to state that a student is defined as any individual who is 
enrolled in an eligible institution of higher education.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under HEERF programs. Because an individual is 
no longer required to be title IV eligible to receive a HEERF student 
grant, we have removed the definition of ``student'' from the general 
provisions regulations that apply to student assistance under the title 
IV programs and relocated the revised definition to 34 CFR part 677, 
which governs the HEERF programs.

Confirming Title IV Eligibility

    Comments: Several commenters offered that many students who are 
eligible for title IV aid will be unable to confirm that eligibility, 
and that the IFR failed to consider the effects of this on such 
students. The commenters cited the lack of necessary information, 
unfamiliarity with the financial aid process, and FAFSA complexity as 
reasons for which a student who is eligible for title IV HEA assistance 
may not be able to establish that status.
    Other commenters asserted that the Department's proposed solutions 
for those who have not completed a FAFSA are flawed because the 
complexity of the FAFSA and lack of available information preclude such 
students from simply filing the form to establish eligibility. The 
commenters expressed particular concern that the burden of having to 
complete a FAFSA for the purpose of obtaining a grant under the HEERF 
programs will fall disproportionately on low-income, minority, and 
first-generation college students who are most in need of the funding.
    Regarding the costs associated with establishing title IV 
eligibility, some commenters objected to the methodology used by the 
Department to estimate those costs. One of those commenters asserted 
that the Department did not consider the costs to students who are 
eligible but have yet to complete the FAFSA, which the commenter 
characterized as extensive based on data suggesting that requiring 
these students to demonstrate eligibility

[[Page 26614]]

by completing the FAFSA would result in an additional 1,057,500 to 
1,305,000 hours of student labor and $18,918,675 to $23,346,350 in 
additional costs to those students. The same commenter expressed the 
belief that the costs associated with students completing an 
institution-provided certification form would be even higher because of 
the uncertainty and confusion they would experience in having to attest 
to their own eligibility upon penalty of law.
    Another commenter opined that the added time for title IV eligible 
students to provide documentation confirming their eligibility 
(particularly during the pandemic) will lead to increased costs in the 
form of late or unpaid bills, missed meals, and even eviction. The same 
commenter's assessment was that the Department failed to consider how a 
lack of access to emergency financial aid might affect students facing 
unprecedented financial challenges and who are struggling with existing 
institutional hurdles.
    Discussion: The Department acknowledges the difficulties many 
students face in completing the FAFSA. This difficulty is especially 
true for under-resourced students. We are persuaded that serious 
economic hardships being experienced by these students, which timely 
application of HEERF funding might ameliorate, would go unaddressed or 
even worsen during the time needed for them to confirm eligibility 
using the FAFSA. Furthermore, we appreciate the comment raising 
concerns about the cost of student labor associated with requiring 
students who are eligible for title IV aid but did not apply, to 
complete the FAFSA, or some other institutionally designated form, in 
order to establish eligibility for HEERF funding. We also note that it 
would be difficult if not impossible for institutions to create their 
own form to verify title IV financial aid eligibility. Institutions 
would need to find ways to verify items that the FAFSA already handles, 
such as whether students have valid Social Security numbers or are 
otherwise eligible noncitizens, which could mean checking with the 
Social Security Administration or the Department of Homeland Security. 
Institutions would also need to ensure male students had registered 
with the Selective Service. However, since these regulations remove the 
requirement that, in order to receive HEERF funding, a student who has 
not already done so must establish title IV eligibility, associating a 
cost with that burden is no longer necessary. The Department notes, 
however, that students who are potentially title IV eligible must 
continue to file a FAFSA to establish such eligibility, and that HEERF 
funding should supplement, rather than replace, title IV aid for those 
who qualify.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we have removed the definition of ``student'' from the 
general provisions regulations that apply to student assistance under 
the title IV programs and relocated the revised definition to 34 CFR 
part 677, which governs the HEERF programs.

Harm to Historically Marginalized Students

    Comments: Many commenters opposed the IFR's restriction of 
eligibility for grants under HEERF to title IV eligible students on the 
grounds that it would exclude large numbers of students, including 
historically marginalized and vulnerable students, such as those who 
are undocumented, have loans in default and are currently enrolled in 
school, and students who have not met institutional standards for 
satisfactory academic progress. The commenters stressed that these are 
students who are trying to improve their futures and who arguably need 
more help, not less, to complete their college education.
    One commenter suggested that the use of the title IV eligibility 
standard would mean that students enrolled in noncredit, short term or 
dual enrollment programs, along with other students who do not have a 
high school diploma or equivalent, will not have access to much-needed 
grants from HEERF funds as they work to increase their skills and 
prepare for employment. The commenter noted that students enrolled in 
noncredit, short term, and adult education programs are more likely to 
be nontraditional students, such as adult learners, low-income 
students, and those for whom English is not their first language.
    Discussion: We are persuaded that restricting eligibility for 
grants from HEERF funds to title IV eligible students is unnecessarily 
injurious to undocumented students as well as others who are not 
eligible for title IV aid, many of whom face economic and institutional 
obstacles that have only been compounded by the pandemic.
    The Department believes the interests of postsecondary education, 
as well as the country as a whole, are best served by using every 
available resource to ensure all students, regardless of citizenship or 
immigration status, are able to continue their studies through the 
present crisis. Accordingly, we are revising the rule established in 
the IFR to clarify that a student is defined as any individual who is 
enrolled in an eligible IHE.
    Regarding students enrolled in non-term, short-term, and dual 
enrollment programs, as well as students who do not have a high school 
diploma, we note that both short-term and dual enrollment programs 
frequently are title IV eligible programs. However, we acknowledge that 
many students enrolled in these types of programs and many students who 
do not have a high school diploma would not be eligible for grants from 
HEERF funds under the restrictions in the IFR.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we have removed the definition of ``student'' from the 
general provisions regulations that apply to student assistance under 
the title IV programs and relocated the revised definition to 34 CFR 
part 677, which governs the HEERF programs.

Effect of the IFR on Veterans

    Comments: One commenter expressed the belief that the eligibility 
restriction in the IFR will negatively affect veterans who have risked 
their lives for the country and implies that the Department does not 
believe their sacrifice merits access to educational opportunities.
    Another commenter identified several problems with linking student 
eligibility for CARES Act emergency grants to FAFSA filing, especially 
for those students at schools not already using applications to 
distribute the aid; these were:
     Requiring a FAFSA to demonstrate title IV eligibility 
would exclude all non-FAFSA filing student veterans, service members, 
and their families and

[[Page 26615]]

survivors from receiving CARES Act grants unless they submit the FAFSA;
     Undergraduate student veterans are less likely than 
nonveterans to file a FAFSA and requiring them to do so is an 
impractical and unnecessary added step that would further complicate 
and/or seriously delay the receipt of grants from HEERF funds;
     Non-FAFSA-filing student veterans are more likely to 
mistakenly conclude they are ineligible for the grants when they are 
excluded from a school's wider automatic distribution of the aid;
     The amount of time these students may have to wait to 
receive their grants because institutions must first create and then 
make available a specific application form would be increased; and
     Additional, undue burden on military-connected students 
will result from requiring them to research their institution's 
application process, obtain, complete, and submit the application.
    The commenter recommended returning to the Department's original 
April 9, 2020, guidance or making servicemembers, veterans, and their 
dependents automatically eligible as two potential solutions.
    Discussion: We are persuaded that restricting eligibility for 
grants from HEERF funds to title IV eligible students is, for reasons 
including those identified by the commenters, potentially harmful to 
the educational interests of veterans. With respect to the commenter's 
proposed solutions, the revised definition of ``student'' in these 
final regulations, extending eligibility for grants from HEERF funding 
to all enrolled students, obviates the need for any regulatory action 
specific to veterans. In this final rule, we are fully explaining our 
reasoning for revising our position on title IV eligibility as a 
prerequisite for HEERF funds, as recommended by the commenter.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we have removed the definition of ``student'' from the 
general provisions regulations that apply to student assistance under 
the title IV programs and relocated the revised definition to 34 CFR 
part 677, which governs the HEERF programs.

Undocumented Students Entitled to HEERF Funds

    Comments: Several commenters expressed the opinion that 
undocumented students are as entitled to grants from HEERF funds as any 
other students. The commenters variously cited the taxes paid by 
undocumented students and their families, their passion for education, 
their overall contributions as members of society, including as health 
care providers and essential workers, and the reality that their need 
for assistance during the pandemic is no less than that of other 
students in support of the premise that all students should have access 
to HEERF funds without reference to citizenship or immigration status.
    Some commenters asserted that undocumented students and their 
families have, in fact, been disproportionately affected by the 
pandemic and, therefore, merit the greatest assistance, especially 
since these students do not qualify for title IV Federal student aid.
    Other commenters stressed the possibility that, denied this 
assistance, many undocumented students will be unable to complete their 
education, an outcome that, in addition to limiting the prospects of 
students forced to drop out, has negative implications for the economy.
    A few commenters advocated for the inclusion of undocumented 
students on ethical grounds, arguing that it is unethical to exclude 
students from eligibility due to immigration status.
    Finally, some commenters addressed the effects on institutions of 
excluding undocumented students from eligibility for grants from HEERF 
funds. The commenters stressed that that the operating deficits and 
risk of closure faced by institutions as a result of the COVID-19 
pandemic will be increased as undocumented students are forced to 
withdraw due to lack of funding. Reduced diversity on campuses is 
another negative outcome the commenters suggested may occur as 
undocumented students leave institutions that they do not have the 
financial resources to continue attending.
    Discussion: We agree with the commenters that students who are 
ineligible for title IV aid are no less deserving of HEERF funding than 
title IV eligible students. In the absence of any statutory provision 
specifically restricting the eligibility of students for HEERF funds on 
the basis of citizenship, immigration status, or other factors, we do 
not believe that such a restriction should be applied. In their 
capacity as students, undocumented persons, like all postsecondary 
students, pursue degrees, obtain employment commensurate with their 
educational attainment and in doing so contribute to the greater good 
of the economy and society as a whole. The Department has been 
persuaded, therefore, by the public comments received that there is no 
good policy reason to treat them differently for the purposes of 
eligibility for HEERF funding and, in fact, every reason to treat them 
the same.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we have removed the definition of ``student'' from the 
general provisions regulations that apply to student assistance under 
the title IV programs and relocated the revised definition to 34 CFR 
part 677, which governs the HEERF programs.

Congressional Intent

    Comments: Several commenters asserted that the absence of any 
language in the CARES Act restricting eligibility for HEERF funding to 
title IV eligible students is evidence that Congress had no intention 
of imposing such restrictions and that the IFR is, therefore, in 
violation of the intent and sprit of the CARES Act.
    Several commenters offered that where Congress did mean to restrict 
relief funds made available through the CARES Act based on immigration 
status, they did so explicitly, i.e., recovery rebates, and that this 
is not the case for the CARES Act relief grants.
    Yet another commenter expressed the belief that the Department's 
interpretation is an arbitrary and capricious administrative action 
that fails to consider the real-world implications of denying critical 
relief funds to thousands of students during a global pandemic.
    Discussion: We agree that a plain text reading of the CARES Act 
language indicates no intent on the part of Congress to restrict 
eligibility for grants from HEERF funds to title IV eligible students. 
Moreover, we find the argument that, where Congress intended to 
restrict funds authorized by the CARES Act it did so explicitly, 
supports that conclusion that the lack of such

[[Page 26616]]

restrictive language with respect to HEERF funding reflects that 
Congress intended all students to be eligible for HEERF funds. Finally, 
while disagreeing with the commenter who characterized the Department's 
actions as arbitrary and capricious, we are persuaded that restricting 
eligibility for grants from HEERF funds to title IV eligible students 
does not give proper consideration to the effect on undocumented 
students of denying them a source of funding during the pandemic, nor 
did it reflect Congress's decision not to place eligibility limits on 
HEERF funds that it placed on other funds.
    Changes: We are removing the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we have removed the definition of ``student'' from the 
general provisions regulations that apply to student assistance under 
the title IV programs and relocated the revised definition to 34 CFR 
part 677, which governs the HEERF programs.

Waste, Fraud, and Abuse

    Comments: Several commenters were critical of what they 
characterized as the Department's assertion that the IFR was 
promulgated chiefly to prevent fraud, waste, and abuse. One commenter 
referenced the Department's citation of a New York Times article in 
support of its actions, observing that the Department quoted the 
article out of context and that, as the article concerned an overseas 
fraud ring using U.S. citizens' personally identifiable information to 
file unemployment claims, it was, in any case, not germane.
    Another commenter averred there is no evidence that, without this 
rule, institutions will engage in rampant wasteful, fraudulent, or 
abusive distribution procedures, as the Department alleges.
    Noting that none of the Department's prior communications related 
to the pandemic expressed concerns over fraud, one commenter expressed 
bemusement over the IFR's singular focus on that possibility. The 
commenter further offered that since, according to a National 
Association of Student Financial Aid Administrators survey as of June 
12, 2020, 94 percent of institutions reported having made CARES Act 
emergency grants and more than three-fourths of those institutions had 
spent more than half of their allocations by that point, the impact of 
the Department's effort to limit fraud by restricting eligibility for 
HEERF funds would be negligible. Lastly, this commenter argued that 
institutional reporting requirements are intended to hold institutions 
accountable for how they spend these funds and to prevent fraud and 
abuse and make the imposition of new eligibility requirements 
unnecessary.
    A few commenters took issue with the Department's assertion that 
institutions could use HEERF funds to:
     Incentivize the reenrollment of students who did not meet 
SAP requirements, for the purpose of enhancing revenue;
     Use HEERF funds for students who are enrolled at the 
institution but do not intend to receive a degree or certificate, 
thereby diverting funds from students who are pursuing a degree or 
certificate in an eligible program; and
     Create cheap classes and programming offering little or no 
educational value with the intention of using HEERF grant funding to 
incentivize the enrollment of students who are not eligible for title 
IV financial assistance.
    The commenters noted that, for students failing to meet SAP, an 
institution could always restore those students' eligibility by 
granting a SAP appeal based on extenuating circumstances or determining 
their failure to make SAP to be the result of COVID-19 related 
circumstances. They also noted that, while it is true institutions 
could award HEERF funds to non-degree seeking students, the Department 
failed to show how (in the absence of any requirement in the CARES Act 
for a student to be degree seeking) that constitutes fraud, waste, or 
abuse. As concerns cheap classes of little educational value offered 
with the sole intent of enrolling students who are not eligible for 
title IV, the commenters suggested that such students would be less 
likely to enroll in these types of classes than would title IV 
recipients due to the need for them to fund a greater share of the cost 
from their own resources.
    Discussion: Upon further review, we agree with the commenters that 
any potential for fraud, waste, and abuse would not be affected by 
restricting eligibility for grants from HEERF funds to title IV 
eligible students. While the Department always has an obligation to 
distribute funds as appropriately as possible and continues to have an 
obligation to prevent waste, attention to which is monitored by the 
Department's Office of the Inspector General, a reconsideration of the 
entirety of the situation has led us to the conclusion that the title 
IV eligibility restriction on HEERF funds is not a necessary measure to 
prevent waste in this case, and that the importance of distributing 
these funds to eligible students who need them do not substantially 
affect any such concerns. In addition, earlier in this preamble, we 
note other requirements already in place to address such concerns. As 
has already been stated elsewhere in this document, the Department is 
persuaded that the sole eligibility consideration for grants made from 
HEERF funding is that a student be enrolled in an eligible institution. 
We believe this position is entirely consistent with the language of 
the CARES Act.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we have removed the definition of ``student'' from the 
general provisions regulations that apply to student assistance under 
the title IV programs and relocated the revised definition to 34 CFR 
part 677, which governs the HEERF programs.

Personal Responsibility and Work Opportunity Reconciliation Act of 1996 
(PRWORA) 8 U.S.C. 1611 and HEERF Funding

    Comments: Numerous commenters challenged the Department's assertion 
within the IFR that 8 U.S.C. 1611, which was enacted as part of the 
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 
(PRWORA), ``clearly'' applies to restrict the HEERF Emergency Financial 
Aid grants to students as both wrong and ``irrelevant to the legality'' 
of the IFR. Commenters asserted that HEERF funds are not Federal public 
benefits under PRWORA and cited the decision in Oakley v. DeVos, No. 
4:20-cv-03215-YGR, ECF No. 44, which rejected the Department's 
arguments that 8 U.S.C. 1611(a) prevented undocumented students from 
receiving this aid. In its decision granting a preliminary injunction, 
the Oakley court stated that grants under HEERF do not fit the 
description of a ``Federal public benefit'' as defined at 8

[[Page 26617]]

U.S.C. 1611, and thus, the associated restrictions should not prevent 
undocumented students from receiving aid. The commenters thus assert 
that all students should have access to HEERF funds regardless of 
whether they are a citizen, noncitizen, or ``qualified alien.''
    Many commenters opined that Congress did not intend for 8 U.S.C. 
1611's eligibility restrictions on nonqualified aliens to apply for 
financial assistance under the HEERF programs. Noting legislators' 
statements about giving schools discretion and flexibility, commenters 
believed that the legislative record demonstrates Congress's intention 
to grant educational institutions wide latitude in determining how to 
use HEERF to assist all students whose education was disrupted by the 
crisis and who were in need. Commenters stated that Congress was 
explicit in other sections of the CARES Act when it wanted to exclude 
certain classes of immigrants from receiving benefits even with the 
provisions of 8 U.S.C. 1611; underscoring that it is significant that 
Congress did not explicitly identify immigrant classes to exclude from 
receiving HEERF grants where it did elsewhere in the CARES Act.
    Commenters argued that the canon of statutory construction where 
specific instructions from Congress override more general ones dictates 
that the CARES Act overrides 8 U.S.C. 1611. See, e.g., RadLAX Gateway 
Hotel, LLC v. Amalgamated Bank, 566 U.S. 639, 645 (2012) (``[I]t is a 
commonplace of statutory construction that the specific governs the 
general.'') (quoting Morales v. Trans World Airlines, Inc., 504 U.S. 
374, 384 (1992)). Commenters stated that, in the CARES Act, Congress 
specifically provided for funding to IHEs based on a precise formula 
accounting for all non-distance learning students, including 
nonqualified alien students, which is evidence that Congress intended 
for nonqualified alien students to also be eligible to receive 
financial assistance under the HEERF programs. 134 Stat. at 567 
(section 18004(a)). Commenters again cited the Oakley court ruling that 
it would defy common sense for certain students to be counted in the 
calculation of institutions' allocations under the HEERF and yet denied 
access to the emergency aid share of those allocations. Thus, since 
nothing in the CARES Act suggests that Congress intended section 1611's 
general provisions to apply to the ``narrow, precise, and specific 
subject'' of COVID-19 emergency relief, Radzanower v. Touche Ross & 
Co., 426 U.S. 148, 153 (1976) (``Where there is no clear intention 
otherwise, a specific statute will not be controlled or nullified by a 
general one, regardless of the priority of enactment.'' (quoting Morton 
v. Mancari, 417 U.S. 535, 550-51 (1974))), the CARES Act overrides 8 
U.S.C. 1611.
    Commenters also argued that the purpose of the CARES Act is highly 
specific, responding to a once-in-a-century pandemic with a one-time 
infusion of cash. By contrast, section 1611 is part of PRWORA, which is 
a general statute written in general terms and the purpose of 
restricting immigrants' access to Federal public benefits under PRWORA 
was to ensure that ``aliens within the Nation's borders [would] not 
depend on public resources to meet their needs,'' prevent public 
benefits from constituting ``an incentive for immigration to the United 
States,'' and lessen the burden on the public benefits system. See 
Public Law 104-193, 110 Stat. 2260 (1996); see also H.R. Rep. No. 104-
651, at 3 (1996) (PRWORA intended to ``limit lifetime welfare 
benefits''). Restricting nonqualified alien students' access to student 
grants provided under the HEERF programs does not achieve any of these 
goals because the HEERF programs are not welfare or continuous benefit 
programs. Rather, the HEERF programs are a one-time funding allocation 
that can be used to provide current college students with short-term 
relief for expenses already incurred due to a national emergency. Thus, 
allowing all full-time immigrant students not previously enrolled in 
distance education courses to be eligible for these funds does not 
increase these individuals' dependence on public benefits, encourage 
immigration to the United States, or burden the public benefits system.
    Regarding 8 U.S.C. 1611(a)'s ``notwithstanding'' clause, commenters 
opined that notwithstanding clauses can be overridden by other 
statutory indicators and courts have long noted that when there is 
evidence that two statutes potentially conflict, a later-enacted, more 
specific provision governs, even if Congress did not explicitly 
identify it as an exception to the earlier statute. Commenters stated 
that the CARES Act's specific, comprehensive statutory scheme controls 
over a general ``notwithstanding'' of an earlier enacted law and that 
the CARES Act ``must govern because it is the most recent indication of 
Congress's intent,'' even though ``the earlier statute contained a 
`notwithstanding' clause and the more recently enacted statute did 
not.'' See GP-UHAB Hous. Dev. Fund Corp. v. Jackson, No. 05 Civ. 4830, 
2006 WL 297704, at *9 (E.D.N.Y. Feb. 7, 2006) (citing In re Ionosphere 
Clubs, Inc., 922 F.2d 984, 991 (2d Cir. 1990) (``[W]hen two statutes 
are in irreconcilable conflict, we must give effect to the most 
recently enacted statute since it is the most recent indication of 
congressional intent.'')). Commenters also noted that the Oakley court 
rejected the Department's ``notwithstanding'' argument, finding that 
the specific, one-time disbursement of HEERF is not subject to the 
general prohibition in PRWORA.
    Additional commenters stated that the nature of HEERF funds as a 
``community benefit'' put them entirely outside the realm of Federal 
public benefits that Congress sought to control under PRWORA. These 
commenters note that section 18004 of the CARES Act did not restrict 
eligibility for any particular set of individuals, but rather gives 
discretion to colleges to decide which students are prioritized in 
receiving HEERF funds. Thus, although some benefits, specifically 
emergency financial aid grants, are redirected to students, the HEERF 
funds themselves are entirely provided directly to colleges to deal 
with the effects of the COVID-19 pandemic. The commenters contended 
that, therefore, the HEERF programs can be viewed as community funds 
under a Department of Health and Human Services (HHS) Interpretation of 
``Federal Public Benefit,'' 63 FR 41658 (Aug. 4, 1998). In this 
interpretation, HHS stated that under 8 U.S.C. 1611(c)(1)(B), a Federal 
public benefit is a benefit provided to individuals under an 
``authorizing statute [that] . . . mandate[s] ineligibility for 
individuals . . . that do not meet certain criteria.'' Thus, even if 
some benefits flow directly to individuals under the program, the 
benefits should not necessarily be considered ``Federal public 
benefits'' when the program as a whole is more readily categorized 
instead as community funds. A commenter made a related point that 
Congress created HEERF funding to serve as a community benefit rather 
than a Federal public benefit, as it recognized that colleges and 
universities would be best situated to understand and respond to the 
complex and localized needs of their educational communities.
    Other commenters stated that, although certain classes of 
immigrants are excluded from receiving ``Federal public benefits,'' 
which generally include ``postsecondary education'' benefits, there are 
statutory exceptions and subsequent agency interpretations which 
indicate that short-term emergency aid of the sort that HEERF provides 
should not be treated as a

[[Page 26618]]

``Federal public benefit.'' See 8 U.S.C. 1611(b)(1)(B) (providing an 
exception for Federal Public Benefits considered to be ``[s]hort-term, 
non-cash, in-kind emergency disaster relief''). Thus, commenters 
believed that, since the HEERF programs were enacted in response to an 
emergency to deliver short-term assistance, as acknowledged by the 
Oakley court, HEERF aid should not be treated as a ``Federal public 
benefit.'' Another commenter stated that the Office of the Attorney 
General has previously clarified that ``programs, services, or 
assistance necessary for the protection of life or safety'' are not 
Federal public benefits for purposes of 8 U.S.C. 1611(a).
    Some commenters argued that, although the Department asserted that 
the CARES Act funds constitute a ``postsecondary education . . . 
benefit,'' Congress did not intend that the CARES Act student grants be 
considered ``postsecondary education . . . benefit[s]'' under 8 U.S.C. 
1611. Rather, by its own terms, the Act requires higher education 
institutions to provide ``emergency financial aid grants to students 
for expenses related to the disruption of campus operations due to 
coronavirus (including eligible expenses under a student's cost of 
attendance, such as food, housing, course materials, technology, health 
care, and child care).'' Commenters further argued that section 18004's 
use of ``cost of attendance,'' which has a technical meaning in the 
HEA, does not signal a legislative intent to limit aid to students 
eligible to receive Federal student aid and that the listing of non-
education-related expenses, including food, housing, and child care 
suggests that lawmakers intended that the CARES Act provide aid to 
students to help them survive--a goal applicable to citizen and 
noncitizen students alike that goes beyond ``postsecondary education . 
. . benefit[s].''
    Commenters further contended that the Department's argument that 8 
U.S.C. 1611's applicability to HEERF funds justifies the further 
application of title IV eligibility restrictions to the HEERF funds 
conflicts with section 1611's purpose. Commenters said that even if 
HEERF funds are Federal public benefits that Congress intended to fall 
within 8 U.S.C. 1611(a)'s eligibility restrictions, section 1611's 
scope only reaches nonqualified aliens' access to Federal public 
benefits. Commenters stated that the rule goes much further than 
section 1611 and limits certain categories of U.S. citizen students 
from also receiving HEERF grants, including those with certain criminal 
convictions, unsatisfactory academic standing, or without a high school 
diploma. The commenters further believed that, although PRWORA provides 
no support for barring U.S. citizen students from receiving financial 
assistance the HEERF programs, the IFR also has the effect of barring 
citizens who did not fill out the FAFSA, including veterans who use the 
Montgomery GI bill, from receiving financial assistance under the HEERF 
programs.
    Discussion: We now agree with the commenters' reasoning that 
Congress did not intend for PRWORA to apply to HEERF funds to students.
    In issuing the IFR, the Department stated its assumption that 8 
U.S.C. 1611 applied to the HEERF funds provided to students. Several 
courts disagreed with the Department's assumption that PRWORA applied 
to the CARES Act funds and, as noted within the comments section above, 
the Department received many public comments challenging this 
assumption as to the applicability of PRWORA. With the benefit of those 
decisions and the public comments, and upon further review, the 
Department now concludes that the term ``student'' in section 18004 of 
the CARES Act include undocumented immigrants. Congress used the term 
``student'' in section 18004 to refer to all enrolled students at an 
institution when it set out the formula for allocating HEERF funds 
among schools. See Section 18004(a)(1)(B) (basing calculation of each 
institution's funding on ``full-time equivalent students''). And the 
Department has consistently recognized that nonqualified aliens are 
counted for purposes of allocating HEERF funds under the formula 
Congress established, because the plain meaning of the formula provided 
by Congress would be read to include all students, and there are no 
indicators that Congress intended the Department to exclude 
nonqualified aliens when arriving at these formula allocations. See 
also ``Methodology for Calculating Allocations per Section 18004(a)(1) 
of the CARES Act'' (https://www2.ed.gov/about/offices/list/ope/heerf90percentformulaallocationexplanation.pdf). Further, Congress used 
the term ``student'' in section 18002, section 18003, and section 18005 
to refer to beneficiaries of ESEA programs, which may unquestionably 
benefit undocumented immigrants and other students without a qualifying 
immigration status for purposes of section 1611. See H.R. Conference 
Report No. 104-725 at 380 (1996) (PRWORA conference report, stating 
that it was ``[t]he intent of the conferees'' that ESEA programs ``not 
be affected by'' section 1611). As courts have noted, and as explained 
in greater detail below, there is a strong presumption that the 
statutory term ``student'' has the same meaning throughout the HEERF 
provision and the CARES Act, which means nonqualified aliens are 
included as students in the eligibility provision as well. 
Additionally, other aspects of the CARES Act reinforce the conclusion: 
Section 2201 expressly excluded non-qualified aliens (albeit in a 
different context), whereas there is no such exclusion in the HEERF 
provision. And interpreting ``students'' in the HEERF provision as 
including aliens furthers the purpose of the HEERF grants without 
impairing the objective of 1611, which is to avoid having Federal 
public benefits induce unlawful immigration.
    Subsequent to the comment closing period for the IFR on July 17, 
2020, the Department received two decisions regarding the applicability 
of 8 U.S.C. 1611 to HEERF program funds. In Noerand v. Devos, Civil No. 
20-11271-LTS (D. Mass. Jul. 24, 2020), plaintiff-student Noerand 
challenged the Department's exclusion of certain non-citizens such as 
Noerand from receiving any benefits under the CARES Act. The Noerand 
court found that the HEERF programs, as originally enacted through the 
CARES Act, ``constitutes a statutory exception to Section 1611's 
general denial of federal public benefits.'' As such, that court 
granted the preliminary injunction sought by Noerand, which enjoined 
the Department from excluding Noerand from receiving benefits under the 
CARES Act. This decision was expanded upon through Massachusetts v. 
Dept of Education, Civ Action # 1:20-1600 (D. Mass., Sept. 3, 2020), 
which adopted the reasoning of the Noerand court and enjoined the 
Department's IFR as to ``any institution of higher education in the 
Commonwealth of Massachusetts and as to any student attending a school 
that is located within the Commonwealth of Massachusetts.'' While the 
Noerand and Massachusetts decisions were not able to contribute to the 
comments the Department received in the IFR as a result of the time at 
which these decisions were issued, we are persuaded by the joint 
reasoning of the courts in Oakley, Noerand, and Massachusetts that the 
CARES Act's relationship to 8 U.S.C. 1611 represents an instance where 
specific instructions from Congress override more general ones. See, 
e.g., United States v. Estate of Romani, 523 U.S. 517, 532 (1998) 
(holding that more specific statute governs). As noted in Noerand, as 
the Supreme Court has explained, ``it is a commonplace of statutory 
construction

[[Page 26619]]

that the specific governs the general.'' Noerand v. Devos, 474 F. Supp. 
3d 394, 403 (D. Mass. 2020) (quoting Morales v. TWA, 504 U.S. 374, 384 
(1992)). In this case, Congress's provision of financial aid grants to 
all students in response to the coronavirus pandemic represents a 
specific policy goal. Upon further consideration, we believe that the 
comprehensive, specific object of the CARES Act represents a clear 
intent to override other, more general statutes, such as 8 U.S.C. 
1611's more general goal of providing for a long-term limit on Federal 
public benefits. This specific intent is made clearer by the fact that 
Congress was clear in other parts of the CARES Act where it did not 
intend for noncitizens to share in this emergency funding. Compare 
CARES Act section 2201 (``Recovery Rebates for Individuals'') 
(explicitly noting nonresident aliens ineligible for recovery rebates 
for individuals) with section 18003(d)(8) (explicitly specifying subset 
of elementary and secondary school emergency relief funds could be used 
to ``provide meals to eligible students'' or ``technology for online 
learning to all students'') (emphasis added).
    We are also persuaded that the ``notwithstanding'' clause in 8 
U.S.C. 1611 is overridden by the clear and manifest intent in the CARES 
Act. We note that the Oakley court highlighted the long-standing 
Supreme Court and Ninth Circuit precedent holding that a later, more 
specific statement may take priority over an earlier, broader statutory 
provision, even if it is prefaced by a ``notwithstanding any other 
laws'' clause. See RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 
U.S. 639, 645 (2012) (relying on long-standing canon of construction 
that a more specific provision is construed as an exception to a 
general one); Oregon Nat. Res. Council v. Thomas, 92 F.3d 792, 796 (9th 
Cir. 1996) (limiting ``notwithstanding any other law'' clause to 
relevant categories of other law, stating ``[w]e have repeatedly held 
that the phrase `notwithstanding any other law' is not always construed 
literally.'') The Department now agrees that the specific, one-time 
emergency disbursement of HEERF assistance in the CARES Act is not 
subject to the more general prohibition in the earlier statute and is 
properly governed by this precedent. Section 18004 of the CARES Act is 
a specific statutory enactment in which Congress unambiguously directed 
certain aid to a plainly described group of people, ``students,'' 
without qualification. Thus, in these circumstances, it would 
constitute a statutory exception to section 1611's general denial of 
Federal public benefits.
    In addition, as noted elsewhere, the Department is particularly 
compelled by the fact that Congress was explicit in other provisions of 
the CARES Act as to which categories of individuals should be 
ineligible to participate in various relief programs. See, e.g., CARES 
Act section 2102(a)(3)(B) (specifically excluding two categories of 
workers from Pandemic Unemployment Assistance); section 2107(a)(2) 
(establishing eligibility criteria for the 13 additional weeks of 
Unemployment Insurance); and section 2201(a) (specifically excluding) 
nonresident aliens from Recovery Rebates for Individuals). ``[W]here 
Congress includes particular language in one section of a statute but 
omits it in another section of the same Act, it is generally presumed 
that Congress acts intentionally and purposely in the disparate 
inclusion or exclusion.'' Gozlon-Peretz v. United States, 498 U.S. 395, 
404 (1991) (citation omitted). As mentioned supra, we note that the 
CARES Act section 2201(a), authorizing $1,200 payments to individuals, 
specifically excluded ``nonresident alien individuals'' from 
eligibility. That Congress specifically included language to exclude 
noncitizens from eligibility for individual rebate funds, but did not 
include specific language to exclude noncitizens from eligibility for 
student grants provided under the HEERF programs, indicates that the 
omission was intentional. Gozlon-Peretz, 498 U.S. at 404.
    We also heed the Oakley, Noerand, and Massachusetts courts' 
individual findings that under the Department's initial interpretation 
of the CARES Act, subsections (a) and (c) of section 18004 would give 
two different meanings to the term ``students,'' where subsection (a) 
would include all students for purposes of funding allocation and 
subsection (c) would exclude non-title IV eligible students for 
purposes of student distributions. The Department now agrees that such 
an interpretation is not the best reading of the statute in light of 
fundamental tenants of statutory interpretation. See Los Angeles v. 
Barr, 941 F.3d 931, 941 (9th Cir. 2019) (``Under the normal rule of 
statutory construction, we presume that identical words used in 
different parts of the same act are intended to have the same 
meaning.'') (internal quotation marks omitted). Based on these 
principles, we agree that the term ``students'' in section 18004(c) 
governing HEERF Student Assistance must have the same meaning as the 
term ``students'' in section 18004(a)(1)(B) governing the HEERF funding 
formula. This view is buttressed by the decision in Noerand, which 
noted that ``Congress's use of the word `students' in section 18004 
unambiguously evinces an intent to encompass all students without 
regard to their immigration status or eligibility for Title IV 
funding.'' Additionally, we note that Congress directed IHEs within 
CRRSAA and ARP to prioritize making ``grants to students with 
exceptional need[.]'' See CRRSAA section 314(c)(3); ARP section 2003. 
As noted elsewhere within this final rule, students who are ineligible 
for title IV aid, are among those with exceptional needs. This later in 
time directive that institutions use CRRSAA and ARP funds to prioritize 
students with exceptional needs is further evidence that Congress 
sought to carve out an exception to 8 U.S.C. 1611 for the purposes of 
the HEERF programs.
    While the Department believes that the CARES Act student grants are 
``postsecondary education . . . benefit[s]'' under 8 U.S.C. 1611 within 
the basic sense of those words, as noted elsewhere, we now believe the 
better reading of the statute is that Congress's direction to higher 
education institutions to provide ``emergency financial aid grants to 
students for expenses related to the disruption of campus operations 
due to coronavirus'' within the CARES Act represents a later in time 
exception to the general rule that nonqualified aliens may not receive 
Federal postsecondary benefits under PRWORA (emphasis added). In 
reaching this conclusion, the Department distinguishes the court's 
decision in Washington as being the only decision to find that PRWORA 
applied to HEERF grants to students and having not provided a detailed 
analysis of the other places within the CARES Act where noncitizens 
were specifically excluded from eligibility for emergency relief, as 
noted elsewhere within this discussion. Upon further consideration, we 
agree with the commenters' argument that the PRWORA's purpose does not 
conflict with that of the CARES Act student grants, as the purpose of 
restricting immigrants' access to Federal public benefits under PRWORA 
was to ensure that ``aliens within the Nation's borders [would] not 
depend on public resources to meet their needs,'' prevent public 
benefits from constituting ``an incentive for immigration to the United 
States,'' and lessen the burden on the public benefits system. We 
further agree that interpreting section 1611 as an implied bar to who 
can access relief designed to help communities and individuals

[[Page 26620]]

prevent, prepare for, respond to, and recover from an unprecedented 
public health crisis that has affected every sector of society would 
undermine the very purpose of the CARES Act and the HEERF programs.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we are removing the definition of ``student'' from the 
general provisions regulations that apply to student assistance under 
the title IV programs and relocating the revised definition to 34 CFR 
part 677, which governs the HEERF programs.

The Imposition of Title IV Eligibility Restrictions on Grants to 
Students Is Contrary to Congressional Intent

    Comments: Many commenters asserted that Congress intended all 
students to have access to pandemic aid relief, irrespective of title 
IV or immigration status. These commenters note that no provision 
within section 18004 of the CARES Act either explicitly or implicitly 
incorporates title IV eligibility restrictions. They stated that the 
only explicit reference to title IV occurs in section 18004(b), which 
requires the Secretary to use the ``same systems'' to distribute 
funding under the HEERF programs as are used to distribute title IV 
funds. However, these commenters suggested that Congress included 
section 18004(b) only for purposes of efficiency and expediency in 
administering funds to colleges.
    Some commenters acknowledged that certain provisions of the CARES 
Act reference title IV eligibility, but argued that the lack of 
incorporation of those requirements into CARES Act section 18004(c) 
compels the inference that Congress did not intend CARES Act emergency 
relief grants to be limited in the same way. One commenter challenged 
the Department's assertion in the IFR that emergency grants should be 
tied to the definition of the cost of attendance in section 472 of the 
HEA, noting that this definition applies to all students, not just 
title IV recipients. Another commenter stated that the consumer 
information requirements in section 485 of the HEA require campuses to 
disclose ``the cost of attending the institution,'' again without 
distinguishing between title IV-aided students and non-recipients.
    Several commenters challenged the IFR's assertion that section 
18004(c) of the CARES Act contains a ``critical ambiguity'' by not 
adequately defining the word ``students.'' These commenters argued that 
no dictionary has defined the word ``students'' to mean only those with 
a title IV eligibility requirement; neither is the common usage of the 
word ``students'' restricted to those eligible for title IV aid. Other 
commenters noted that the second component of the section 18004(a)(1) 
allocation formula encompasses all students, including the millions of 
students who do not qualify for Pell Grant support. As such, those 
commenters argued that the Department's inclusion of just one part of 
the institutional allocation formula as justification for its 
interpretation of student eligibility for emergency grants makes no 
sense.
    One commenter argued that another internal inconsistency is that 
the IFR applies title IV's eligibility restrictions while recognizing 
that the CARES Act emergency assistance grants ``by definition, do not 
constitute Federal financial student aid under the HEA, including title 
IV of the HEA.'' An additional commenter stated that the IFR as drafted 
would effectively create a new title IV program. Other commenters noted 
that the IFR would effectively create multiple definitions of 
``student'' within the CARES Act by first defining it broadly when 
calculating funding amounts for each IHE, see 134 Stat. at 567 (section 
18004(a)), and then defining it narrowly for which ``students'' are 
ultimately eligible to receive HEERF grants, see id. at 568 (section 
18004(c)). Still other commenters noted an internal inconsistency in 
the IFR disavowing title IV's requirements with respect to certain 
procedural requirements under sections 482 and 492 of HEA because ``the 
rule does not relate to the delivery of student aid under title IV.'' 
As such, several commenters argued that the Department was not entitled 
to Chevron deference in its interpretation.
    Some commenters stated that the Department's conclusion that it 
would not be logical for Congress to require students to be eligible 
under section 484 of title IV of the HEA for grants under section 
18004(a)(3) of the CARES Act, where part B of title VII of the HEA is 
expressly referenced, but not for grants under sections 18004(a)(1) and 
(2) of the CARES Act. Commenters believed this confuses means and ends 
given that Congress in section 18004(d) directs the Secretary to 
prioritize funds under section 18004(a)(3) for institutions that did 
not receive sufficient funding under section 18004(a)(1) and (2). In 
section 18004(a)(3) of the CARES Act, lawmakers directed the Secretary 
to make awards to institutions of higher education that the Secretary 
determines have the greatest unmet needs related to coronavirus, which 
could be used for ``grants to students,'' among other uses. In section 
18004(c), commenters noted that lawmakers went a different route, 
allowing for provision of funds to students by institutions in the form 
of ``emergency financial aid grants'' independent of a Federal 
financial aid program. Commenters concluded that it is far more logical 
to read these as programs complementing each other and intended to 
support students both eligible to participate in title IV aid programs 
and those not.
    Discussion: Upon further review, we believe the aforementioned 
principles of statutory construction counsel against reading any title 
IV restrictions into ``student.'' The definition of ``student'' we 
adopt in this final rule will avoid the potentially inconsistent 
interpretations of that term within the same statute pointed out by 
commenters. The Department is especially persuaded that, given that the 
allocation for institutions under CARES Act section 18004(a)(1) takes 
into account all students, it would be incongruous to read section 
18004(c) to bar emergency financial aid grants to a subset of those 
very same students. This position is supported by the legislative 
history of the CARES Act. See, e.g., 166 Cong. Rec. H1856 (daily ed. 
Mar. 27, 2020) (statement of Rep. Underwood) (remarking that the grants 
would ``support college students whose semesters were disrupted due to 
COVID-19''); id. at H1823 (daily ed. Mar. 27, 2020) (statement of Rep. 
Scott) (stating that the CARES Act would ``support grants to displaced 
students'') (emphasis added).
    After careful reconsideration, the Department is also persuaded 
that Congress did not intend to incorporate title IV's eligibility 
restrictions by implication. The Department acknowledges that, 
``[w]here Congress includes particular language in one section of a 
statute but omits it in another section of the same Act, it is 
generally presumed that Congress acts intentionally and purposely in 
the disparate inclusion or exclusion.'' Gozlon-Peretz v. United States, 
498 U.S. 395, 404 (1991) (citation omitted). While the term ``cost of 
attendance'' does appear within the CARES Act and has continued into 
CRRSAA and the American Rescue Plan (ARP), the

[[Page 26621]]

Department agrees that this term is not limited to the title IV 
context. Similarly, the phrase ``emergency financial aid grants to 
students,'' while appearing in both the Federal Supplemental 
Educational Opportunity Grant (FSEOG) title IV program and HEERF 
section 18004(c), speaks to different activities under distinct 
programs. We acknowledge those commenters who noted that Powerex Corp 
speaks to ``identical words and phrases within the same statute,'' and 
does not apply when two related statutes play different roles in a 
common goal. Powerex Corp. v. Reliant Energy Servs., Inc., 551 U.S. 
224, 232 (2007). In this instance, the Department has concluded that 
Congress did not intend for FSEOG and HEERF programs to play the same 
role.
    Additionally, the Department believes that this final rule is in 
keeping with the changes to the HEERF program made under CRRSAA and 
ARP, which direct institutions to ``prioritize grants to students with 
exceptional need.'' See CRRSAA section 314(c)(3); ARP section 2003. The 
Department agrees with the numerous commenters who provided evidence to 
support that students who are ineligible for title IV aid are among 
those with exceptional needs. For example, undocumented students and 
their families are more likely to have lower median incomes, limited 
access to health insurance and care, and jobs that do not allow them to 
work from home, increasing their risk of infection.\3\ While the term 
``exceptional need'' does appear within certain parts of the HEA (as in 
the case of FSEOG, see HEA section 413C(c)(2), and in school Program 
Participation Agreement requirements, see HEA section 463(a)(8)), the 
Department agrees that Congress did not explicitly cross reference 
either of those sources, and neither have a unique definition that 
could be readily imported into the HEERF context. Rather, the language 
in CRRSAA and ARP directing schools to prioritize students with 
exceptional need re-emphasizes that Congress intended that schools have 
discretion to determine who should receive funds, including whether 
such grants should go to title IV eligible students or not.
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    We also concur with the commenters that the distribution of awards 
under section 18004(a)(3) of the CARES Act through ``part B of title 
VII of the Higher Education Act'' that may be used ``for grants to 
students for any component of the student's cost of attendance (as 
defined under section 472 of the Higher Education Act)'' was intended 
to complement the distribution of ``emergency financial aid grants'' 
under section 18004(c). As such, we find that the overarching intent of 
these two provisions was to support students, whether or not they are 
eligible to participate in title IV aid programs, and that a more plain 
text reading of the CARES Act leads to the conclusion that the term 
``students,'' means all students.
    While as described below the Department maintains that rulemaking 
is warranted in this context, it now agrees that imposing title IV 
eligibility onto the HEERF grants to students would contravene the 
statute's purpose. The Department recognizes that the CARES Act was 
enacted to provide rapid relief to students in order for them to 
respond to their educational needs in the wake of an unprecedented 
global pandemic. The Department now agrees that required verification 
of title IV eligibility could impose unnecessary delays in distributing 
funds to students, which would run directly counter to the overriding 
legislative purpose of this funding.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under HEERF programs. Because an individual is 
no longer required to be title IV eligible to receive a HEERF student 
grant, we are removing the definition of ``student'' from the general 
provisions regulations that apply to student assistance under the title 
IV programs and relocating the revised definition to 34 CFR part 677, 
which governs the HEERF programs.

Constitutional Challenges to the Application of Student Eligibility 
Requirements

    Comments: Some commenters challenged the imposition of eligibility 
requirements on the distribution of CARES Act emergency relief grants 
as being in violation of separation of powers principles and the 
Spending Clause. These commenters noted that Federal funding to States 
may only carry conditions that Congress has explicitly imposed. 
Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17-18 (1981). As 
such, these commenters advanced the argument that ``legislation enacted 
pursuant to the spending power is much in the nature of a contract'' 
and that ``[t]he legitimacy of Congress's power to legislate under the 
spending power thus rests on whether the State voluntarily and 
knowingly accepts the terms of the `contract.''' Id. In this respect, 
the commenters noted that IHEs were required to sign a certification 
and agreement in order to receive HEERF money, but they were not given 
the ``clear notice'' required for exercises of the spending power. 
Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy, 548 U.S. 291, 296 
(2006).
    Discussion: The Department maintains that the definition of 
``student'' as revised in this final rule does not exceed the 
Department's regulatory authority or otherwise violate the Spending 
Clause or separations of powers principles. While acknowledging the 
restrictions inherent in the Spending Clause, ``Congress is not 
required to list every factual instance in which a state will fail to 
comply with a condition. Such specificity would prove too onerous, and 
perhaps, impossible.'' Mayweathers v. Newland, 314 F.3d 1062, 1067 (9th 
Cir. 2002). Here, the Department's rulemaking is ``reasonably related 
to the purpose'' of the HEERF programs in providing much needed 
direction to institutions regarding which individuals may receive 
financial aid grants under the HEERF programs. New York v. United 
States, 505 U.S. 144, 172 (1992). We note that, while the definition of 
the term ``student'' set forth in this final rule is less restrictive 
than the one set forth in the IFR, the Secretary has broad authority to 
``make, promulgate, issue, rescind, and amend rules and regulations 
governing the manner of operation of, and governing the applicable 
programs administered by, the Department.'' 20 U.S.C. 1221e-3; see id. 
section 3474 (``The Secretary is authorized to prescribe such rules and 
regulations as the Secretary determines necessary or appropriate to 
administer and manage the functions of the Secretary or the 
Department.''). The way in which this final rule aligns with this 
rulemaking authority also is discussed in further detail below.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we are removing the definition of ``student'' from the 
general provisions

[[Page 26622]]

regulations that apply to student assistance under the title IV 
programs and relocating the revised definition to 34 CFR part 677, 
which governs the HEERF programs.

No Delegation of Authority to the Department

    Comments: Several commenters challenged the Department's IFR as 
being in excess of the rulemaking authority delegated to the 
Department. These commenters argued that section 18004 contains no 
evidence that Congress intended to delegate rulemaking authority to the 
Department. Thus, these commenters stated that, while Congress could 
have chosen to delegate authority to the Department to set eligibility 
criteria for the receipt of grant funds, it did not. Other commenters 
acknowledged that the Department does hold general authority to 
promulgate regulations governing the programs it administers, 20 U.S.C. 
1221e-3, but that the Department lacks express authority in the context 
of the CARES Act and that, ``[s]uch a broad interpretation would be 
antithetical to the concept of a formula grant.'' City of Los Angeles 
v. Barr, 941 F.3d 931, 942 (9th Cir. 2019). Another commenter stated 
that the Supreme Court has also noted that a ``clear basis'' for 
delegation is particularly important when the rule directly concerns 
matters of ``vast economic . . . significance.'' The CARES Act 
ostensibly includes no ``clear basis'' for the delegation of the 
authority that the Department assumes through the promulgation of this 
rule. As a result, these comments also argued that the IFR would fail 
at ``Chevron step zero'' for lacking a delegation of authority to act 
in this manner.
    Discussion: The Department maintains its position that it has the 
necessary authority to engage in rulemaking with respect to the 
programs that it administers, including the HEERF programs. 
Specifically, as acknowledged by some commenters, 20 U.S.C. 1221e-3 
confers on the Secretary the authority to ``make, promulgate, issue, 
rescind, and amend rules and regulations governing the manner of 
operation of, and governing the applicable programs administered by, 
the Department.'' The HEERF programs were clearly given to the 
Department to administer, as originally enacted in the CARES Act, and 
continued through the additional monies appropriated for these programs 
within CRRSAA and ARP. For example, the CARES Act appropriated funding 
``to carry out the Education Stabilization Fund'' (emphasis added), of 
which the HEERF funds are a part. The primary funding stream under 
section 18004(a)(1) of the HEERF program more broadly provides that 
``the Secretary [of Education] shall allocate funding,'' thus 
indicating that all funds in HEERF are within the purview of the 
Department.
    The final rule clarifies ambiguity as to the administrative scope 
of coverage of HEERF programs (i.e., timing of student enrollment), so 
that institutions may manage HEERF program funds effectively and 
efficiently. In specifying the administrative scope of that coverage, 
the Department is guided by the purpose of the HEERF grants to 
students, which are to cover ``expenses related to the disruption of 
campus operations due to coronavirus'' under the CARES Act and ``for 
any component of the student's cost of attendance or for emergency 
costs that arise due to coronavirus'' under CRRSAA and ARP. This text 
provides the necessary framework for the expenses for which HEERF 
grants to students may be used while leaving ambiguity as to what point 
in time students must have been enrolled in order to receive HEERF 
funding. The Department is mindful that many students who were enrolled 
during the pandemic have been forced to pause their education by 
withdrawing, and that institutional debt is one of the primary barriers 
to students re-enrolling and finishing their education.\4\ By adopting 
a definition of ``student'' that allows students who were enrolled 
since the declaration of the national emergency to receive HEERF 
grants, the Department seeks to provide clarity as to which students 
may receive HEERF funding consistent with Congressional intent.
---------------------------------------------------------------------------

    \4\ https://www.newamerica.org/education-policy/reports/comeback-story/recommendations/.
---------------------------------------------------------------------------

    The Department has authority to interpret ambiguity in the statute. 
The Supreme Court has emphasized that ``[i]f Congress has explicitly 
left a gap for the agency to fill, there is an express delegation of 
authority. . . . Sometimes the legislative delegation to an agency on a 
particular question is implicit rather than explicit.'' See Chevron, 
467 U.S. at 843-44, 104 S. Ct. at 2781-82. In this instance, the 
Department's use of notice-and-comment rulemaking procedures required 
by the Administrative Procedure Act (APA), 5 U.S.C. 551, et seq., has 
allowed the Department to receive important public input on the burden 
that results from an overly restrictive definition of ``student'' and 
has informed the Department's changes within this final rule. The 
Department received several comments as part of its notice and comment 
process indicating that commenters desired additional clarity on the 
eligibility of students for HEERF grants based on their enrollment 
status, while some commenters advocated for an expansive interpretation 
of which students could be considered ``enrolled.'' These comments 
informed and underpinned our regulating on the relationship between 
eligibility and student timing of enrollment.
    Additionally, the revised definition of ``student'' in this final 
rule reflects our current position that the text of the statute (which 
uses ``students'' without any qualification), viewed in context, 
clearly speaks to all students, regardless of immigration status. And 
although the Department now believes Congress's intent is clear on this 
issue, it has explained its position in this final rule in light of the 
Department's previous assumption about the application of section 1611 
to HEERF funds, as well as to address comments on the applicability of 
section 1611. This final rule thus clarifies that the unqualified 
statutory term ``students'' means just what it says--it encompasses all 
students, regardless of immigration status. And, because the statutory 
term ``students'' is clear on that issue, the use of that term--as 
explained more fully above--indicates that section 1611 does not apply.
    Therefore, the Department believes that this final rule is 
consistent with the APA and its rulemaking authority granted by 
Congress.
    Changes: None.

Notice and Comment; Delay of Effective Date

    Comments: Some commenters argued that the Department's grounds for 
waiving notice and comment rulemaking in the IFR were insufficient, and 
therefore that the Department did not fulfill its obligations under the 
APA.
    Commenters disputed that the waiver served the public interest. One 
commenter claimed that the Department did not explain how issuance of 
the IFR, which made previous guidance enforceable, would lead to 
quicker distribution of HEERF funds, or how the waiver was in the 
public interest. They also pointed out that the Department's desire to 
make previous guidance on the use of HEERF funds legally binding cannot 
establish good cause, specifically citing United States v. Reynolds, 
710 F.3d 498 (3d Cir. 2013), for this purpose. Commenters also noted 
that the IFR was issued during pending litigation, which one commenter 
pointed out called into question the level of certainty it would 
provide.
    Commenters stated that the importance of institutions properly 
distributing the HEERF allocations and

[[Page 26623]]

prevention of waste, fraud, and abuse were insufficient causes for 
waiving notice and comment rulemaking. They said that grounds for the 
waiver were undermined by the three-month period between enactment of 
the CARES Act and issuance of the IFR, and that the Department could 
make such an argument with respect to any funding it administers. 
Commenters also pointed to case law stating that a desire to provide 
immediate guidance does not constitute good cause. One commenter said 
the Department failed to provide evidence that the one-time emergency 
HEERF funds would be subject to fraud or waste.
    Several commenters stated that the current national emergency was 
also an insufficient basis for the waiver. They said that the length of 
time between the CARES Act's enactment and issuance of the IFR, and the 
fact that guidance on this topic was issued in April 2020, also 
undermined this argument. They said that any emergency was now of the 
Department's own making, which case law holds is not justification for 
a waiver of notice and comment rulemaking. In fact, one commenter 
pointed out that the need for public comment was great, given the 
expansiveness of the IFR and its effect of denying emergency relief to 
students during a pandemic and economic recession.
    In addition, commenters argued that, for the same reasons they 
asserted the Department did not have good cause to waive notice and 
comment rulemaking, it also did not have good cause to waive the 30-day 
delayed effective date required by the APA and Congressional Review 
Act.
    Finally, one commenter contrasted the process for the associated 
information collection with the process for this IFR. They noted that, 
despite the Department's claims that it was acting for reasons of 
urgency, it issued an information collection request in relation to its 
distribution of the HEERF funds that was subject to a longer notice and 
comment period (60 days) than the IFR (30 days), which they claimed 
suggested it treated the same set of facts with different levels of 
urgency.
    Discussion: We appreciate the concerns raised by commenters on 
these topics, including good cause to waive notice and comment 
rulemaking and delays of effective dates. However, whether or not the 
IFR met the standard for good cause to waive notice and comment 
rulemaking, the Department has now considered the comments received in 
response to the IFR, and is issuing this final rule which responds to 
them. We greatly value those comments and appreciate the value that 
public comment provides, especially with respect to a rule of this 
nature. As explained elsewhere throughout this preamble, the Department 
is now, with the benefit of comments received, revising the rule set 
forth in the IFR to better effectuate the purposes of the CARES Act, as 
well as CRRSAA and ARP. See Little Sisters of the Poor Saints Peter & 
Paul Home v. Pennsylvania, 140 S. Ct. 2367, 2385 (2020).
    With respect to the Department's information collection request, 
notice and comment rulemaking under the APA (5 U.S.C. 553) and 
information collection approval process under the Paperwork Reduction 
Act (44 U.S.C. 3501, et seq.) are separate processes. The Department 
requested an emergency clearance under the Paperwork Reduction Act to 
allow for the immediate collection of this information. Following that, 
the public was then provided the ability to comment on the proposed 
burden assessment through the standard information collection process 
with notice requesting comment being published in the Federal Register. 
However, in both instances, the Department pursued the accelerated 
procedures provided for in applicable law, due to the exigency of the 
situation.
    Changes: None.

Change in Policy; Arbitrary and Capricious

    Comments: Commenters argued that the IFR was arbitrary and 
capricious because it changed the Department's policy position without 
acknowledgment or explanation, and did not examine relevant data, 
consider effects on students, or provide a satisfactory explanation for 
the choices it made. Commenters pointed out what they viewed as various 
inconsistencies between the IFR and previous Department statements, 
including an April 9, 2020, letter sent by Secretary DeVos to college 
and university presidents. They also referenced a television appearance 
by Secretary DeVos. More specifically, commenters stated that the April 
9, 2020, letter indicated that each institution may develop its own 
system and process for determining how to allocate CARES Act funds. 
Commenters pointed to the Funding Certification and Agreement issued by 
the Department, which they said initially characterized individual 
emergency financial aid grants as not constituting Federal financial 
aid under title IV of the HEA. According to one commenter, this 
position was more logical and consistent with the CARES Act and other 
funding, but it was reversed by the IFR without displaying awareness of 
the change or explaining it. Another commenter pointed to what they 
said were other inconsistencies in the way the Department interpreted 
or applied different statutory sections, including interpretations of 
section 18004(c), the application of 8 U.S.C. 1611, and the way funds 
were allocated when compared with the eligibility criteria.
    Discussion: In these final regulations, we are fully explaining our 
revision of the position taken in the IFR. To the extent this is a 
departure from our prior policy, all changes are fully explained as 
required by applicable case law, including cases cited by commenters, 
such as F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502 (2009), 
and Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016). In 
addition, we believe that the revisions and explanations throughout 
this document address the points raised by commenters. As discussed 
above, the revised definition of ``student'' also resolves the 
disparity the commenter referenced with respect to funding allocation.
    Changes: Changes are discussed in applicable sections throughout 
this preamble.
    Comments: None.
    Discussion: With respect to student program eligibility, the 
current definition of ``student'' in section 668.2 solely refers to the 
CARES Act. Given the passage of CRRSAA and ARP, which also allocate 
funds for the HEERF programs, the Department believes that this revised 
definition of ``student'' should encompass student eligibility for 
these programs as well. Thus, the new definition of ``student'' refers 
to student eligibility for the CARES Act, CRRSAA, and ARP under the 
umbrella of the HEERF programs. We also have added the phrase 
``financial aid grants to students'' as one of the specific purposes 
for which ``student'' is defined because that language was introduced 
in section 314(c) of CRRSAA.
    Changes: We have removed the requirement that a student must be 
eligible for title IV aid to receive financial assistance under the 
HEERF programs and clarified in the definition of ``student'' that any 
individual who is or was enrolled at an eligible institution on or 
after the date the national emergency was declared for COVID-19 may 
qualify for assistance under the HEERF programs. Because an individual 
is no longer required to be title IV eligible to receive a HEERF 
student grant, we are removing the definition of ``student'' from the 
general provisions regulations that apply to student

[[Page 26624]]

assistance under the title IV programs and relocating the revised 
definition to 34 CFR part 677, which governs the HEERF programs.

Waiver of Notice and Comment Rulemaking and Delayed Effective Date 
Under the Administrative Procedure Act

    This final rule defines ``student'' for purposes of the HEERF 
programs, which include funding from the CARES Act, CRRSAA and ARP. 
Congress enacted the CARES Act, as well as CRRSAA and ARP, to help the 
nation cope with the urgent economic and health crises created by the 
COVID-19 pandemic and created the HEERF programs to provide emergency 
financial aid grants to students. CRRSAA and ARP build on the framework 
for HEERF programs originally created by the CARES Act by allocating 
money into the same programs, and it is logical to apply the same 
definition of ``student'' for provisions in those two statutes as for 
the CARES Act. We believe that the public would reasonably have 
anticipated that this final rule would apply to all HEERF funding. In 
addition, the purpose of notice and comment has been fulfilled in this 
case. Here, the IFR ``adequately frame[d] the subjects for 
discussion.'' Nat'l Rest. Ass'n v. Solis, 870 F. Supp. 2d 42, 51 
(D.D.C. 2012) (quoting Conn. Light & Power Co. v. Nuclear Reg. Comm'n, 
673 F.2d 525, 533 (D.C. Cir. 1982)). Application of these rules to 
CRRSAA and ARP funding was a reasonable development of the original 
proposal. See id. Further, the Department has responded to the public 
comments received in response to the IFR in this final rule, and the 
position taken in this final rule with respect to CRRSAA and ARP 
funding is consistent with the position many commenters advocated with 
respect to the CARES Act.
    Nevertheless, out of an abundance of caution and because CRRSAA and 
ARP were enacted after the closing of the public comment period for the 
IFR, we are including this waiver of rulemaking in this final rule. We 
believe that, in the event the inclusion of CRRSAA and ARP is not a 
logical outgrowth, such waiver is both justified and necessary, based 
on the circumstances.
    In light of the urgent economic challenges facing many students as 
a result of the crisis, the Department has determined that there is 
good cause for promulgating this final rule without additional notice 
and comment and that it would be contrary to the public interest to 
engage in notice and comment rulemaking. The public comments summarized 
throughout this preamble underscore the importance of this aid to 
students. For example, as noted earlier in this preamble, the 
Department now agrees with the numerous commenters who provided 
evidence to support the conclusion that students who are ineligible for 
title IV aid are among those with the most exceptional needs. This 
final rule will enable institutions to distribute these emergency funds 
to all eligible students in an expedient manner. Delay of these 
critical funds to engage in notice and comment rulemaking would be 
directly contrary to the public interest at issue, addressing exigent 
need due to the national pandemic.
    Under the APA (5 U.S.C. 553), the Department generally offers 
interested parties the opportunity to comment on proposed rules. 
However, the APA provides that an agency is not required to conduct 
notice and comment rulemaking when the agency, for good cause, finds 
that notice and public comment thereon are impracticable, unnecessary, 
or contrary to the public interest (5 U.S.C. 553(b)(B)). While we are 
responding to public comments received in response to the IFR in this 
final rule, we also believe that, if needed, a waiver of notice and 
comment rulemaking with respect to this final rule is warranted by the 
circumstances and is appropriate to encompass the full scope of the 
final rule. In light of the current national emergency and the 
importance of institutions distributing as quickly as possible the 
HEERF allocations, including those from CRRSAA and ARP, via emergency 
financial aid grants to students to help with their expenses related to 
the disruption of campus operations due to COVID-19, the normal 
rulemaking process would be impracticable and contrary to the public 
interest. Therefore, we believe that good cause exists for waiving the 
notice and comment requirements of the APA.
    The Department is not required to conduct negotiated rulemaking for 
this rule. The requirement in HEA section 492 that requires the 
Department to obtain public involvement in the development of proposed 
regulations for title IV of the HEA does not apply to this final rule, 
because it implements the CARES Act, not title IV. Moreover, even if it 
did apply, section 492(b)(2) of the HEA provides that negotiated 
rulemaking may be waived for good cause when doing so would be 
``impracticable, unnecessary, or contrary to the public interest.'' 
Section 492(b)(2) of the HEA also requires the Secretary to publish the 
basis for waiving negotiations in the Federal Register at the same time 
as the regulations in question are first published. Even if section 492 
applied to this rule, good cause would exist to waive the negotiated 
rulemaking requirement, since, as explained above, notice and comment 
rulemaking is not practicable or in the public interest in this case.
    The master calendar requirement in section 482 of the HEA likewise 
does not apply to this rule, because the rule does not relate to the 
delivery of student aid funds under title IV.
    Additionally, the APA generally requires that regulations be 
published at least 30 days before their effective date, except as 
otherwise provided by the agency for good cause found and published 
with the rule (5 U.S.C. 553(d)(3)). As described above, good cause 
exists for this rule to be effective upon publication in light of the 
current national emergency and the importance of institutions properly 
distributing the HEERF allocations via emergency financial aid grants 
to students to help with their expenses related to the disruption of 
campus operations due to COVID-19. Under the CRA, a major rule may take 
effect no sooner than 60 calendar days after an agency submits a CRA 
report to Congress or the rule is published in the Federal Register, 
whichever is later. 5 U.S.C. 801(a)(3)(A). However, the CRA creates 
limited exceptions to this requirement. See 5 U.S.C. 801 (c), 808. An 
agency may invoke the ``good cause'' exception under section 808(2) in 
the case of rules for which the agency has found ``good cause'' under 
the APA standard in section 553(b)(B), to issue the rule without 
providing the public with an advance opportunity to comment. As stated 
above, the Department has found good cause to issue this rule without 
additional notice and comment rulemaking, and thus we are not including 
the 60-day delayed effective date in this rule.

Executive Orders 12866 and 13563

Regulatory Impact Analysis

    Under Executive Order 12866, the Office of Management and Budget 
(OMB) must determine whether this regulatory action is ``significant'' 
and, if so, subject to the requirements of the Executive order and 
subject to review by OMB. Section 3(f) of Executive Order 12866 defines 
a ``significant regulatory action'' as an action likely to result in a 
rule that may--
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local, or 
Tribal governments or

[[Page 26625]]

communities in a material way (also referred to as an ``economically 
significant'' rule);
    (2) Create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles stated in the 
Executive order.
    This final regulatory action will have an annual effect on the 
economy of more than $100 million. Therefore, this regulatory action is 
an economically significant regulatory action subject to review by OMB 
under section 3(f)(1) of Executive Order 12866. Pursuant to the 
Congressional Review Act (5 U.S.C. 801 et seq.), the Office of 
Information and Regulatory Affairs designated this rule as a ``major 
rule,'' as defined by 5 U.S.C. 804(2).
    We have also reviewed this action under Executive Order 13563, 
which supplements and explicitly reaffirms the principles, structures, 
and definitions governing regulatory review established in Executive 
Order 12866. To the extent permitted by law, Executive Order 13563 
requires that an agency--
    (1) Propose or adopt regulations only upon a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things and to the extent practicable--the costs of 
cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives rather 
than the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including economic incentives--such as user fees or 
marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''

Need for Regulatory Action

    The Department is issuing this final rule to remove the requirement 
that a student must be eligible for title IV aid to receive financial 
assistance under the HEERF programs and clarify in the definition of 
``student'' that any individual who is or was enrolled at an eligible 
institution on or after the date the national emergency was declared 
for COVID-19 may qualify for assistance under the HEERF programs. The 
final rule also applies the revised definition of ``student'' to funds 
to be distributed under CRRSAA and ARP, as well as the CARES Act. This 
final rule is meant to provide flexibility and clarify administrative 
processes for institutions so the funds can be provided to eligible 
students as efficiently as possible, with an emphasis on providing 
funds to students with exceptional need as directed by the changes to 
the HEERF programs made under the CRRSAA and the ARP. The final rule 
also describes the expansion of access to all students enrolled at 
institutions, not just title IV eligible students. The financial aid 
grants under the HEERF programs are meant to assist students with 
expenses related to the pandemic to reduce disruption to their 
education, so this final rule revises the Department's interpretation 
of an eligible ``student'' so the funds can be disbursed in a timely 
manner and to those students with exceptional need. Adopting a broad 
and simple definition of a ``student'' allows the emergency grant funds 
for students to maximize their purpose and fully live up to 
Congressional intent in time to assist with the COVID-19 related 
expenses the funds are intended to alleviate.

Costs and Benefits

    The emergency financial aid grants under section 18004 of the CARES 
Act are intended to assist eligible students with expenses related to 
the COVID-19 pandemic to limit disruption of their educational 
activities. In accordance with OMB Circular A-4 (available at 
www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a-4.pdf), we are evaluating the costs and benefits of the final rule 
compared to a pre-statutory baseline. The Department acknowledges that 
many of the emergency financial aid grants under section 18004 of the 
CARES Act have already been awarded to students under the previous 
definition of ``student.'' However, there are still significant funds 
available for students under section 314 of CRRSAA and section 2003 of 
ARP, so students affected by the revised definition of student can 
benefit from those funds. Therefore, where applicable in this section, 
the Department discusses not only the costs and benefits of the final 
rule compared to a pre-statutory baseline, but also the costs and 
benefits relative to institutions having already made many emergency 
financial aid grant awards using the previous definition of 
``student.'' This final rule revises which students are eligible for 
the grants but does not change the amount available or the allocation 
formulas for providing the funds to institutions. The dollar amount of 
transfers available to eligible students is a minimum of $6.25 billion 
and up to $12.5 billion from the initial HEERF funding, depending on 
the amount institutions retain for institutional expenses. We have not 
discounted or annualized this amount because it is meant to be 
disbursed to students as efficiently as possible. Much of the initial 
HEERF funding for students from the CARES Act has been distributed, so 
the revised definition of student will not affect much of those funds. 
However, the additional funding provided by CRRSAA and ARP makes at 
least $6.46 billion and $18.37 billion, respectively, in transfers 
available to students and the benefits of those funds are available to 
all the students based on the revised definition.
    As described in this preamble, the Department now agrees with the 
majority of commenters that aligning the eligibility requirements for 
the HEERF grants to title IV is not the best policy to effectuate the 
goal of helping students and institutions respond to circumstances 
created by the current pandemic. As commenters noted, students excluded 
from receiving grants because of the eligibility requirements in the 
IFR would include some of those most affected by the COVID-19 pandemic 
and the lack of emergency relief funds could significantly disrupt 
their educations and economic prospects. The emergency relief available 
under the CARES Act, CRRSAA, and ARP could help these students continue 
their educations. The Department now agrees that the funding should be 
distributed regardless of title IV eligibility, so the potential costs 
noted by the commenters are not applicable under this final rule. This 
final rule explains the expanded eligibility and allows students to 
know if they are eligible to receive such funds

[[Page 26626]]

from their institution. This change from the IFR will allow 
institutions to award grants to their students with the most need, 
including students with significant unmet need that may not otherwise 
be eligible for Federal funding.
    Because institutions will determine how they will distribute funds 
to their students, the Department does not know the exact distribution 
of who will receive the grants. Table 1 shows the estimated pool of 
potential recipients as derived from data from the Integrated 
Postsecondary Education Data System (IPEDS) for institutions that 
received an allocation. It is not specific to Spring 2020 enrollment 
but does provide an indication of the number of students who could 
receive funds. The change from the IFR is reflected in the 1.2 million 
non-resident alien and 3.3 million students involved exclusively in 
distance education programs who are potentially eligible for grants 
under the final rule.

                 Table 1--Estimated Potential Grant Recipients by Control of Institution \5\ \6\
----------------------------------------------------------------------------------------------------------------
                                                      Public          Private       Proprietary        Total
----------------------------------------------------------------------------------------------------------------
Total Enrollment \1\............................      19,335,244       5,271,445       2,078,903      26,685,592
    Undergraduate...............................      17,493,764       3,533,450       1,695,833      22,723,047
    Graduate....................................       1,841,480       1,737,995         383,070       3,962,545
Non-Resident Alien..............................         729,367         420,550          34,221       1,184,138
% All-Distance \2\..............................           12.40           28.40           62.50  ..............
Distance Education eligible under final rule....       1,806,382         837,479         614,126       3,257,987
----------------------------------------------------------------------------------------------------------------

    Students will benefit from assistance in paying additional expenses 
associated with elements included in their cost of attendance, such as 
room and board, that changed with the disruption of campus activities. 
As confirmed by the Internal Revenue Service, the relief provided under 
section 18004 of the CARES Act will not be considered gross income, so 
students have no Federal tax consequences to deter them from accepting 
this assistance. Students will have to work with their institutions to 
access the funds according to the process the institution establishes 
for awarding the relief. As described in the Paperwork Reduction Act 
section of this preamble, the estimated number of students applying for 
relief is increased compared to the IFR published June 17, 2020, but 
the time per application is reduced because students would not have to 
submit paperwork to prove title-IV eligibility. Students are expected 
to take 1,280,908 hours for a total of $22.4 million at a wage rate of 
$17.50 \7\ to apply for emergency relief.
---------------------------------------------------------------------------

    \5\ Analysis of IPEDS 2018-19 12-month enrollment file, effy2019 
available at https://nces.ed.gov/ipeds/datacenter/DataFiles.aspx?goToReportId=7.
    \6\ National Center for Education Statistics, Digest of 
Education Statistics 2019, Table 311.15. Number and percentage of 
students enrolled in degree-granting postsecondary institutions, by 
distance education participation, location of student, level of 
enrollment, and control and level of institution: Fall 2017 and Fall 
2018. Fall 2018 share of students taking exclusively distance 
education courses. Available at https://nces.ed.gov/programs/digest/d19/tables/dt19lowbar;311.15.asp.
    \6\ Students hourly rate estimated using national median hourly 
wage for all occupations. Bureau of Labor Statistics, May 2020 
Occupational Employment Statistics Data. Available at https://www.bls.gov/oes/current/oes_nat.htm#00-0000. Last accessed March 31, 
2021.
    \7\ Students' hourly rate estimated using national median weekly 
wage for 16-24 year-olds. Bureau of Labor Statistics, Labor Force 
Statistics, Table 3: Median usual weekly earnings of full-time wage 
and salary workers by age, race, Hispanic or Latino ethnicity, and 
sex, not seasonally adjusted. Available at https://www.bls.gov/webapps/legacy/cpswktab3.htm. Last accessed April 13, 2021.
---------------------------------------------------------------------------

    Institutions are also affected by this final rule. They have some 
flexibility in determining how they will distribute the funds they were 
allocated for this emergency relief. They will incur some costs in 
setting criteria or establishing an application process for their 
students. We assume the distribution of the funds can largely rely on 
existing processes and information involved in the disbursement 
financial aid. Several commenters noted that there would be a 
significant burden on institutions in confirming students' eligibility 
for the emergency relief, including for students who do not have an 
existing valid SAR or ISIR for the 2019-20 or 2020-21 award years. One 
commenter estimated that it would take an institution approximately 
148.5 hours to administer HEERF funds. However, with the change in the 
final rule, the burden on institutions should be reduced because they 
do not have to confirm students' title IV eligibility.
    As described in the Paperwork Reduction Act section of this 
preamble, the burden on institutions may be reduced compared to the IFR 
that involved checking title IV eligibility, but we do not incorporate 
that possibility into the estimated25,680 hours and $1,203,622 at a 
wage rate of $46.87 for postsecondary education administrators.\8\
---------------------------------------------------------------------------

    \8\ Bureau of Labor Statistics, Occupational Employment and Wage 
Statistics, May 2020 National Occupational Employment and Wage 
Estimates Outlook Handbook--Management Occupations--Postsecondary 
Administrators, 201920 median hourly wage. Available at https://
https://www.bls.gov/oes/current/oes_nat.htm#11-0000. Last accessed 
April 13, 2021.
---------------------------------------------------------------------------

    To the extent that students use emergency financial aid grants to 
pay for expenses related to their cost of attendance, institutions will 
benefit from the revenue stemming from payments that students would 
otherwise not be able to make. Table 2 summarizes the amounts to be 
allocated to institutions by sector. The full breakout of amounts 
allocated to individual institutions, including the maximum that can be 
allocated to institutional costs, is available in the Allocations for 
section 18004(a)(1) of the CARES Act document \9\ on the Department's 
CARES Act website.\10\ These allocations were made according to the 
formula described in the Methodology for Calculating Allocations 
document \11\ on the Department's CARES Act website. The allocation 
formula emphasizes institutions' share of Pell Grant recipients with 75 
percent of the allocation based on each IHE's share of full-time 
equivalent (FTE) enrollment of Pell Grant recipients who were not 
enrolled in exclusively distance education prior to the coronavirus 
emergency, relative to the share of such individuals in all 
institutions. The remaining 25 percent is based on the institution's 
share of FTE enrollment of students who were not Pell Grant recipients 
and who were not enrolled exclusively in distance education prior to 
the coronavirus emergency. This formula helps direct relief to 
institutions that serve lower income students as part of their on-
campus operations. Table 2-A summarizes the

[[Page 26627]]

initial section 18004(a)(1) allocations that were posted in April 2020 
prior to the allocation of the $1.86 million that was originally held 
in reserve.
---------------------------------------------------------------------------

    \9\ Available at www2.ed.gov/about/offices/list/ope/allocationstableinstitutionalportion.pdf.
    \10\ www2.ed.gov/about/offices/list/ope/caresact.html.
    \11\ Available at www2.ed.gov/about/offices/list/ope/heerf90percentformulaallocationexplanation.pdf.

                            Table 2-A--Summary of CARES Act HEERF (a)(1) Allocations
----------------------------------------------------------------------------------------------------------------
                                                                                                 Maximum amount
                  Type of institution                       Total award       Minimum amount   for institutional
                                                             allocation      for student aid        portion
----------------------------------------------------------------------------------------------------------------
Public.................................................      8,904,536,829      4,452,268,877      4,452,267,952
Private, Non-Profit....................................      2,484,027,454      1,242,014,126      1,242,013,328
Proprietary............................................      1,118,690,220        559,345,530        559,344,690
                                                        --------------------------------------------------------
    Total..............................................     12,507,254,503      6,253,628,533      6,253,625,970
----------------------------------------------------------------------------------------------------------------

    As indicated earlier in this preamble, under CRRSAA, approximately 
$22.7 billion in additional funding was made available for institutions 
of higher education under HEERF. Funding was appropriated for the 
existing (a)(1), (a)(2) and (a)(3) programs previously authorized under 
the CARES Act, as well as for a new (a)(4) program authorized under 
CRRSAA that provides funds for proprietary institutions for exclusive 
use as financial grants to students. Proprietary institutions are no 
longer eligible to receive awards under the (a)(1) program.
    These funds were allocated according to a slightly revised formula, 
but institutions were required to use at least the same amount for 
student grants as they did under the original HEERF allocation. CRRSAA 
appropriates more funding (approximately $22.7 billion instead of $12.6 
billion) for supplemental and new awards under CRRSAA section 
314(a)(1), so, on average, a larger share of (a)(1) allocations will be 
available for institutional support than under the CARES Act. The 
allocation methodology is described in the Methodology for Calculating 
Allocations Under Section 314(a)(1) document posted January 14, 
2021.\12\ Students enrolled in exclusively distance education courses 
are included in the CRRSAA section 314(a)(1) allocation formula. 
Institutions will now receive allocations that factor in such students 
under the formula, and the formula also allows exclusively online 
institutions that were ineligible for funding under section 18004(a)(1) 
of the CARES Act to apply for grant funds. Amounts apportioned for 
students enrolled in exclusively distance education courses may be used 
only for financial aid grants to students. Table 2B summarizes the 
allocations to institutions of CRRSAA funds.
---------------------------------------------------------------------------

    \12\ https://www2.ed.gov/about/offices/list/ope/314a1methodologyheerfii.pdf.

                           Table 2-B--Summary of CRRSAA (a)(1) and (a)(4) Allocations
----------------------------------------------------------------------------------------------------------------
                                                                                                 Maximum amount
                  Type of institution                       Total award       Minimum amount   for institutional
                                                             allocation      for student aid        portion
----------------------------------------------------------------------------------------------------------------
Public.................................................     16,440,482,886      4,475,143,071     11,965,339,815
Private, Non-Profit....................................      4,077,819,283      1,308,911,589      2,768,907,694
Proprietary............................................        680,914,080       680,914,0800  .................
                                                        --------------------------------------------------------
    Total..............................................     21,199,216,249      6,464,968,740     14,734,247,509
----------------------------------------------------------------------------------------------------------------


                             Table 2-C--Summary of ARP (a)(1) and (a)(4) Allocations
----------------------------------------------------------------------------------------------------------------
                                                                                                 Maximum amount
                  Type of institution                       Total award       Minimum amount   for institutional
                                                             allocation      for student aid        portion
----------------------------------------------------------------------------------------------------------------
Public.................................................     28,830,604,105     14,657,490,881     14,173,113,224
Private, Non-Profit....................................      7,191,354,595      3,713,709,802      3,477,644,793
Proprietary............................................       395,845,7000       395,845,7000  .................
                                                        --------------------------------------------------------
    Total..............................................     36,417,804,400     18,767,046,383     17,650,758,017
----------------------------------------------------------------------------------------------------------------

    We estimate that the definition of student eligibility for the 
financial aid grants to students will not have an impact on the Federal 
budget. The CARES Act provided a maximum of $12.5 billion, with a 
minimum of $6.25 billion required to be spent on emergency financial 
aid grants to students and not spent on institutional expenses. The 
definition of student eligibility also applies to the $22.7 billion in 
additional funding appropriated under CRRSAA and $39.6 billion under 
ARP. These totals include amounts available under sections (a)(2) and 
(a)(3) of CARES, CRRSAA, and ARP that provide funds to minority-serving 
institutions and as supplemental assistance to private, non-profit, and 
public institutions to be awarded competitively. The final rule does 
not impact the Federal budget because it expands which students are 
eligible to receive emergency relief provided by the CARES Act, CRRSAA, 
and ARP but does not change the amount available for such grants. As 
described in the

[[Page 26628]]

Costs, Benefits, and Transfers section related to institutions, 
allocations were determined in April 2020 for the CARES Act funds with 
$50 million held in reserve to account for data limitations in 
allocating the initial amounts to eligible institutions. When issuing 
the interim final rule, we anticipated that $12.5 billion would 
ultimately be disbursed in 2020, and therefore estimated $12.5 billion 
in transfers in 2020 relative to a pre-statutory baseline. Reserve 
allocations of $1.86 million went out but the full $50 million was not 
needed, and all unobligated CARES (a)(1) funding was transferred to 
CRRSAA (a)(1) funding. The definition of student also applies to $22.7 
billion in CRRSAA funds allocated in January 2021 and $39.6 billion in 
ARP funds which will be allocated to institutions in April 2021.

Accounting Statement

    As required by OMB Circular A-4, in the following table we have 
prepared an accounting statement showing the classification of the 
impacts associated with the provisions of these final regulations in 
2020-2021, using 3 percent and 7 percent discount rates. This table 
provides our best estimate of the changes in monetized transfers in 
2020-2021 as a result of this final rule. We note that transfers below 
flow from the Federal Government to eligible students and are processed 
through institutions.

  Table 3--Accounting Statement: Classification of Estimated Impacts in
                                2020-2021
                              [In millions]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                Category                             Benefits
------------------------------------------------------------------------
Assistance may support students
 continuing in their programs...........          Not quantified
                                         -------------------------------
                                                       Costs
                                         -------------------------------
Paperwork burden on institutions to                   7%              3%
 administer funds and on students to               $23.6           $23.6
 apply..................................
------------------------------------------------------------------------
                Category                             Transfers
------------------------------------------------------------------------
Minimum relief for eligible students to               7%              3%
 help with additional expenses due to            $31,486         $31,486
 covid-19 pandemic (HEERF from CARES
 Act, CRRSAA, and ARP)..................
Maximum assistance to institutions for           $38,639         $38,639
 COVID-19 pandemic related expenses from
 CARES Act, CRRSAA, and ARP.............
Funding available to HBCUs, TTCUs, MSIs,          $5,718          $5,718
 and SIPs under CARES, CRRSAA and ARP
 (a)(2).................................
Competitively awarded supplemental                $660.2          $660.2
 assistance to private, non-profit and
 public institutions under CARES, CRRSAA
 and ARP (a)(3).........................
------------------------------------------------------------------------

Regulatory Flexibility Act Certification

    The Secretary certifies that these regulations will not have a 
significant negative economic impact on a substantial number of small 
entities. The U.S. Small Business Administration Size Standards define 
``small entities'' as for-profit or nonprofit institutions with total 
annual revenue below $7,000,000 or, if they are institutions controlled 
by small governmental jurisdictions (that are comprised of cities, 
counties, towns, townships, villages, school districts, or special 
districts), with a population of less than 50,000.
    However, as noted in several of the Department's recent 
regulations, we believe that an enrollment-based standard for small 
entity status is more applicable to institutions of higher education. 
The Department recently proposed a size classification based on 
enrollment using IPEDS data that established the percentage of 
institutions in various sectors considered to be small entities, as 
shown in Table 4. We described this size classification in the NPRM 
published in the Federal Register on July 31, 2018 for the proposed 
borrower defense rule (83 FR 37242, 37302). The Department discussed 
the proposed standard with the Chief Counsel for Advocacy of the Small 
Business Administration, and while no change has been finalized, the 
Department continues to believe this approach better reflects a common 
basis for determining size categories that is linked to the provision 
of educational services.

                            Table 4--Small Entities Under Enrollment Based Definition
----------------------------------------------------------------------------------------------------------------
                             Sector                                    Small           Total          Percent
----------------------------------------------------------------------------------------------------------------
2-year Public...................................................             342           1,240              28
2-year Private, Non-Profit......................................             219             259              85
2-year Proprietary..............................................           2,147           2,463              87
4-year Public...................................................              64             759               8
4-year Private, Non-Profit......................................             799           1,672              48
4-year Proprietary..............................................             425             558              76
                                                                 -----------------------------------------------
    Total.......................................................           3,996           6,951              57
----------------------------------------------------------------------------------------------------------------

    As described in the Regulatory Impact Analysis, institutions may 
benefit from applying no more than 50 percent of their allocation of 
CARES Act HEERF funds to institutional costs, so some small entities 
will benefit from those revenues. Public and private, non-profit 
institutions can use allocated funds from CRRSAA and ARP above the 
amount they received under the CARES Act for institutional expenses. 
They will also have to establish a process for

[[Page 26629]]

administering and disbursing the funds. We expect that the 2,586 
estimated small entities allocated funds for this purpose under the 
CARES Act, CRRSAA, and ARP will spend a total of 5,172 hours totaling 
$242,412 at a wage rate of $46.87 \13\ for postsecondary administrators 
to administer the distribution of the relief.
---------------------------------------------------------------------------

    \13\ Bureau of Labor Statistics, Occupational Employment and 
Wage Statistics, May 2020 National Occupational Employment and Wage 
Estimates Outlook Handbook--Management Occupations-Postsecondary 
Administrators, 201920 median hourly wage. Available at https://
https://www.bls.gov/oes/current/oes_nat.htm#11-0000. Last accessed 
April 13, 2021.
---------------------------------------------------------------------------

    Table 5 shows the allocations of funds to small entities by sector, 
with any institution for which there was no small business indicator 
available considered a small entity. As for all institutions, the 
allocations of funds to specific small institutions are available on 
the Department's CARES website,\14\ CRRSAA website,\15\ and ARP 
website.
---------------------------------------------------------------------------

    \14\ Available at https://www2.ed.gov/about/offices/list/ope/allocationstableinstitutionalportion.pdf.
    \15\ Available at https://www2.ed.gov/about/offices/list/ope/crrsaa.html.

             Table 5--Summary of Allocations of (a)(1) and (a)(4) Funds to Small Entities by Sector
----------------------------------------------------------------------------------------------------------------
                                                                                                 Sum of maximum
              Sector                      Source            Sum of total      Sum of minimum        award to
                                                             allocation     award to students     institutions
----------------------------------------------------------------------------------------------------------------
Private..........................  Non-Profit..........      1,696,561,228        248,701,847        675,401,095
                                   CARES Act...........        295,300,392         14,346,167        280,954,225
                                   CRRSAA..............        512,382,528        166,085,661        346,296,867
                                   ARP.................        888,878,308         68,270,019         48,150,003
Public...........................  ....................      1,243,353,304        602,193,954        641,159,350
                                   CARES Act...........        266,608,121        133,304,213        133,303,908
                                   CRRSAA..............        204,286,897         68,130,854        136,156,043
                                   ARP.................        772,458,286        400,758,887        371,699,399
Proprietary......................  ....................        554,759,869        431,554,396        123,205,473
                                   CARES Act...........         57,474,850         28,737,500         28,737,350
                                   CRRSAA..............        307,916,595        307,916,595                  0
                                   ARP.................        189,368,424         94,900,301         94,468,123
Total............................  ....................      3,494,674,401      1,282,450,197      1,439,765,918
                                   CARES Act...........        619,383,363        176,387,880        442,995,483
                                   CRRSAA..............      1,024,586,020        542,133,110        482,452,910
                                   ARP.................      1,850,705,018        563,929,207        514,317,525
----------------------------------------------------------------------------------------------------------------

    Because institutions control the distribution of the funds to 
eligible students and have flexibility to establish a process suitable 
to their circumstances, no alternatives were considered specifically 
for small entities.

Paperwork Reduction Act of 1995

    As part of its continuing effort to reduce paperwork and respondent 
burden, the Department provides the general public and Federal agencies 
with an opportunity to comment on proposed and continuing collections 
of information, in accordance with the Paperwork Reduction Act of 1995 
(PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that: The public 
understands the Department's collection instructions, respondents can 
provide the requested data in the desired format, reporting burden 
(time and financial resources) is minimized, collection instruments are 
clearly understood, and the Department can properly assess the impact 
of collection requirements on respondents.
    In the IFR, the Department interpreted, for purposes of determining 
eligibility for the CARES Act funds, the term ``student,'' to mean a 
person who is eligible under section 484 of the HEA to receive title IV 
aid, as suggested by the references to title IV in the context of 
section 18004.
    Based on comments received on the IFR and further review of the 
CARES Act, including in light of legal challenges, the Department has 
been persuaded that this definition was too prescriptive. In this final 
rule the Department has modified the definition of a student, for the 
purposes of receiving emergency financial aid grants under the Higher 
Education Emergency Relief Fund programs as originally enacted under 
the CARES Act, to be an individual who is or was enrolled at an 
eligible institution on or after the date of declaration of the 
national emergency concerning the novel coronavirus disease. The change 
in the definition of a student for these purposes is also supported in 
subsequent passage of the CRRSAA and ARP. Please refer to the 
supplementary information and Analysis of Comments and Changes earlier 
in this preamble for further information.
    Some commenters challenged the estimates of hours and costs from 
the IFR, mostly on the basis that they were too low or did not account 
for necessary steps. Because the revised definition of ``student'' in 
this final rule no longer necessitates a more detailed review of 
student eligibility for funding, there has been no change to the 
estimated burden on institutions from the IFR. We continue to believe 
that many institutions expanded their current financial aid appeals 
process and utilize that framework to receive requests for COVID-19 
assistance from eligible students. We maintain the estimate that each 
institution that received an allocation required five hours to set up 
any new form for students to complete and establish review and 
recordkeeping processes. The estimated burden for the 1,651 private 
institutions remains 8,255 hours (1,651 x 5 hours). The estimated 
burden for the 1,641 proprietary institutions remains 8,205 hours 
(1,641 x 5 hours). The estimated burden for the 1,844 public 
institutions remains 9,220 (1,844 x 5 hours). The total burden to all 
institutions receiving an allocation of funds remains 25,680 hours 
(5,136 institutions x 5 hours).
    Because the definition of ``student'' has been broadened in this 
final rule, the universe of students eligible to receive funds has been 
recalculated. Using the unduplicated head count for 2018-2019 as 
reported by IPEDS, the number of enrolled students is calculated at 
26,685,592. We estimate that 60 percent, or 16,011,355 of those 
eligible students may request additional aid from their institution 
based on

[[Page 26630]]

changed circumstances due to the coronavirus. As students are no longer 
required to show title IV eligibility to receive this additional aid, 
we are adjusting the time for students to make a request for additional 
funds from their institution. We estimate that it would take 
approximately 5 minutes per student to complete a request for 
additional aid for a total student burden of 1,280,908 hours (.08 hours 
x 16,011,355 students).
    An emergency collection, 1840-0844, was previously approved by OMB 
on June 17, 2020 for the burden assessed to both institutions and 
students as noted in the IFR and ICR supporting statement. The 
emergency collection had an expiration date of December 31, 2020. The 
comment period for the ICR closed August 18, 2020. Of the four comments 
received for the ICR two were substantive comments that echoed comments 
filed for the IFR. The emergency clearance lapsed without filing either 
a 30-day public comment period request for the ICR or a request to 
discontinue the ICR.
    The Department received emergency approval under OMB control number 
1840-0857 in order to allow institutions to utilize the revised student 
definition for purposes of disbursing funds to students as soon as 
possible. The Department will publish 60-day and 30-day Federal 
Register notices as required by 5 CFR 1320.8(d), soliciting comments on 
the information collection.

    1840-XXXX--Eligibility of Students at Institutions of Higher Education for Funds Under the HEERF Programs
----------------------------------------------------------------------------------------------------------------
                                                                                                 Estimate costs
                                  Number of       Number of       Hours per                      student $17.50
       Affected entity           respondents      responses       response      Total burden      institutions
                                                                                                     $46.87
----------------------------------------------------------------------------------------------------------------
Individual Student...........      16,011,355      16,011,355             .08       1,280,908        $22,415,890
Private Institution..........           1,651           1,651               5           8,255            386,912
Proprietary Institution......           1,641           1,641               5           8,205            384,568
Public Institution...........           1,844           1,844               5           9,220            432,141
                              ----------------------------------------------------------------------------------
    Total....................      16,016,491      16,016,491  ..............       1,306,588         23,619,511
----------------------------------------------------------------------------------------------------------------

Federalism

    Executive Order 13132 requires us to ensure meaningful and timely 
input by State and local elected officials in the development of 
regulatory policies that have federalism implications. ``Federalism 
implications'' means substantial direct effects on the States, on the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.
    In the IFR, we solicited comments on whether the rule may have 
federalism implications and encouraged State and local elected 
officials to review and provide comments. In the Public Comment section 
of this preamble, we discuss any comments we received on this subject.
    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 PDF. To use PDF, you must have 
Adobe Acrobat Reader, which is available for free on 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.

List of Subjects

34 CFR Part 668

    Administrative practice and procedure, Aliens, Colleges and 
universities, Consumer protection, Grant programs--education, Loan 
programs--education, Reporting and recordkeeping requirements, 
Selective Service System, Student aid, Vocational education.

34 CFR Part 677

    Colleges and universities, Grant programs--education, Reporting and 
recordkeeping requirements.

Michelle Asha Cooper,
Acting Assistant Secretary for Postsecondary Education.

    For the reasons discussed in the preamble, the Secretary amends 
parts 668 and 677 of title 34 of the Code of Federal Regulations as 
follows:

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

0
1. The general authority citation for part 668 continues to read as 
follows:

    Authority: 20 U.S.C. 1001-1003, 1070g, 1085, 1088, 1091, 1092, 
1094, 1099c, 1099c-1, 1221-3, and 1231a, unless otherwise noted.
* * * * *


Sec.  668.2   [Amended]

0
2. In Sec.  668.2, amend paragraph (b) by removing the definition of 
``Student'' and the authority citation following the definition.

PART 677--HIGHER EDUCATION EMERGENCY RELIEF FUND PROGRAMS

0
3. The authority citation for part 677 is revised to read as follows:

    Authority: 20 U.S.C. 1221e-3; section 314(a)(2), Pub. L. 116-
260, Division M, 134 Stat. 1182, unless otherwise noted.


0
4. Add subpart B to read as follows:

Subpart B--Student Eligibility

Sec.
677.3 Student eligibility.
677.4 [Reserved]

    Authority: 20 U.S.C. 1221e-3, 3474; Section 18004, Pub. L. 116-
136, 134 Stat. 281, as amended through Section 314, Pub. L. 116-260, 
Division M, 134 Stat. 1182, and Section 2003, Pub. L. 117-2, 135 
Stat. 4.


Sec.  677.3  Student eligibility.

    Student, for purposes of the phrases ``grants to students'', 
``emergency

[[Page 26631]]

financial aid grants to students'' or ``financial aid grants to 
students'' as used in the Higher Education Emergency Relief (HEERF) 
programs, is defined as any individual who is or was enrolled (as 
defined in 34 CFR 668.2) at an eligible institution (as defined in 34 
CFR 600.2) on or after March 13, 2020, the date of declaration of the 
national emergency concerning the novel coronavirus disease.


Sec.  677.4  [Reserved]

[FR Doc. 2021-10190 Filed 5-12-21; 8:45 am]
BILLING CODE 4000-01-P