Methodology for Calculating Allocations per Section 18004(a)(1) of the CARES Act

Summary

Department of Education note on how it allocated Higher Education Emergency Relief Fund money under Section 18004(a)(1) of the CARES Act. Of the fund, 90% ($12,557,254,500.00) goes to institutions by formula: 75% by each institution’s share of full-time equivalent (FTE) enrollment of Pell Grant recipients not enrolled exclusively in distance education before the coronavirus emergency, and 25% by its share of that enrollment among students who were not Pell recipients. Because the exact data did not exist, the Department approximated both factors from IPEDS and Federal Student Aid Pell data, using 2017/18 enrollment, the 2018/19 award year and fall 2018 distance-education shares. It reserved $50 million for a later award, partly for eligible schools the formula may have missed.

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Methodology for Calculating Allocations per Section 18004(a)(1) of the CARES Act


Of the funds available for the Higher Education Emergency Relief Fund, 90% ($12,557,254,500.00) of
the funds will be awarded to IHEs based on two formula factors: (1) 75% of the funds will be awarded to
IHEs based on each IHE’s share of full-time equivalent (FTE) enrollment of Pell Grant recipients who
were not enrolled exclusively in distance education prior to the coronavirus emergency, relative to the
total FTE enrollment of such individuals in all IHEs; and (2) 25% of the funds will be awarded to IHEs
based on each IHE’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, relative to the
total FTE enrollment of such individuals in all IHEs. The first factor primarily allocates funds based on
undergraduate enrollment since Pell Grant eligibility is limited to undergraduates and students in
postbaccalaureate teacher education programs. The second factor allocates funds based on undergraduate
and graduate enrollment.

Because limitations of available data preclude calculating precise amounts for the factors, the U.S.
Department of Education (the Department) approximated the factors using the best available data from
ED’s Integrated Postsecondary Education Data System (IPEDS) and Pell Grant Volume data provided by
the Office of Federal Student Aid (FSA).

The first factor was approximated as follows. The number of undergraduate students awarded Pell grants
as reported in IPEDS was adjusted based on the institution’s share of total Pell recipients as reported by
FSA for the 2018/19 award year. The FTE enrollment of these Pell recipients was approximated by
looking at the ratio in IPEDS between 2017/18 FTE undergraduate enrollment and 2017/18 undergraduate
headcount enrollment. In order to approximate FTE enrollment of Pell Grant recipients who were not
enrolled exclusively in distance education, the estimated FTE enrollment of Pell Grant recipients was
multiplied by the percentage of fall 2018 undergraduate degree/certificate-seeking students not enrolled
exclusively in distance education as reported in IPEDS.

The second factor was estimated by subtracting the approximated FTE enrollment of Pell Grant recipients
(if any) from the total 2017/18 FTE enrollment of students as reported in IPEDS and then multiplying the
difference by the percentage of fall 2018 undergraduate, graduate, and professional students not enrolled
exclusively in distance education as reported in IPEDS.

The Department acknowledges the limitations of this data, and therefore has reserved $50 million to be
provided in a subsequent award.

Some additional points to note:

    •   The data used to determine distance education participation are based on a fall unduplicated
        enrollment which is different from FTE enrollment and, in the case of the total FTE enrollment,
        also different from FTE enrollment for a 12-month period. The unduplicated enrollment is a
        simple headcount of students enrolled in classes; whereas the FTE enrollment counts part-time
        students in accordance with their enrollment rate.
    •   Allocation amounts were calculated at the 6-digit OPEID.
    •   Some OPEID information was adjusted based on information provided by FSA regarding change
        of ownership or affiliation.
    •   For some IHEs, the approximated FTE enrollment of Pell Grant recipients exceeded the total FTE
        enrollment. For these IHEs, the total non-Pell FTE enrollment was set to $0, making the IHE
        ineligible for the second factor.
•   The ratio of FTE undergraduate enrollment to undergraduate headcount enrollment was capped at
    100 percent.
•   Schools that are currently ineligible or were not participating in Title IV per the IPEDS data are
    excluded.
•   There may be some currently participating and eligible schools which may be excluded from this
    formula. For this reason, a reserve of $50 million has been set aside in part to address such
    institutions.


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