HEERF II Proprietary Institution Grant Funds for Students ((a)(4) Program): Frequently Asked Questions (CFDA 84.425Q)

Summary

A Frequently Asked Questions document on the Higher Education Emergency Relief Fund (HEERF) II Proprietary Institution Grant Funds for Students (CFDA 84.425Q), the (a)(4) program, published January 14, 2021 and updated March 19, 2021. It states that the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), signed December 27, 2020, gives the U.S. Department of Education approximately $22.7 billion for institutions of higher education. The answers cover how proprietary institutions apply by April 15, 2021, the requirement that grant funds go to financial aid grants to students, the expanded use of unspent CARES Act funds, and when grantees should draw down funds.

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“HEERF II Proprietary Institution Grant Funds for Students ((a)(4) Program): Frequently Asked Questions (CFDA 84.425Q).” Original at www.ed.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/heerf-ii-proprietary-institution-grant-funds-for-students-a-4-program-43e52bccf9/, SHA-256 a37b558bf2b9895cfcb6ad3b7ccfbb2c50e4679ec091b90b9f2f25b3151986a9.

Full text

Higher Education Emergency Relief Fund (HEERF) II
Proprietary Institution Grant Funds for Students (CFDA 84.425Q) ((a)(4)
Program) Frequently Asked Questions 1

Coronavirus Response and Relief Supplemental Appropriations Act, 2021

Published January 14, 2021. Updated March 19, 2021. 2

On December 27, 2020, the President signed the Coronavirus Response and Relief
Supplemental Appropriations Act, 2021 (CRRSAA) (P.L. 116-260). This new law gives the
U.S. Department of Education (Department) approximately $22.7 billion to distribute to
institutions of higher education in order to prevent, prepare for, and respond to coronavirus
through the HEERF.

This law has some similarities—as well as important differences—from the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act) (P.L. 116–136) that was enacted on March
27, 2020. These FAQs provide an overview of those similarities and differences and describe
the differences between the funds allocated under section 314(a)(4) of the CRRSAA. The
grant program authorized under section 314(a)(4) of the CRRSAA is referred to below as the
“(a)(4) program” and its funds as “(a)(4) funds.”

CRRSAA (a)(4) Program

1. Question: Will proprietary institutions receive funds under the CRRSAA? How do they
apply?

Answer: Yes, but proprietary institutions are not eligible for supplemental funding under
the CRRSAA (a)(1) programs; rather, such institutions must apply for awards under a
new section 314(a)(4) program. This program provides a separate funding stream for
proprietary institutions that may be used only for financial aid grants to students. The
amount each proprietary institution is eligible to receive is based on the formula
described in section 314(a)(1) of the CRRSAA and listed on an allocation table (the
“(a)(4) allocation table”).

Each completed application for a section 314(a)(4) program grant must consist of:

1) A completed SF-424 and SF-424 supplemental form;
2) A Certification and Agreement (Proprietary Institution Grant Funds for
Students) (Red C&A)

The Grants.gov Funding Opportunity Number is ED-GRANTS-011521-005 for this
program, Proprietary Institution Grant Funds for Students (CFDA 84.425Q). Applications
1
Other than statutory and regulatory requirements included in the document, the contents of this guidance do
not have the force and effect of law and are not meant to bind the public. This document is intended only to
provide clarity to the public regarding existing requirements under the law or agency policies.
2
Question 7 has been revised to reflect new changes as of March 19, 2021. Question 15 has been added from
the HEERF II (a)(1) FAQs. Questions 16-22 have been newly added as of this March 19, 2021 updated FAQ.

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must be submitted by April 15, 2021. To register to use Grants.gov, please visit their
“How to Apply for Grants” webpage here, or call their Applicant Support helpdesk at 1-
800-518-4726. More information about how to apply is available on our HEERF II
CRRSAA website.

2. Question: My proprietary institution is listed on the CRRSAA (a)(4) program allocation
table but did not receive funding under the CARES Act. Can we receive funds under the
CRRSAA?

Answer: Yes. Your proprietary institution may apply for funds under the CRRSAA
(a)(4) program for proprietary institutions even if it did not receive funding under the
CARES Act.

3. Question: What amount of (a)(4) funds must institutions devote to financial aid grants to
students?

Answer: The CRRSAA requires that proprietary institutions receiving funding under the
(a)(4) program to use all their grant funds to provide financial aid grants to students.

4. Question: What are the requirements for making financial aid grants to students?

Answer: Unlike the CARES Act, the CRRSAA requires that institutions prioritize
students with exceptional need, such as students who receive Pell Grants, in awarding
financial aid grants to students. However, students do not need to be only Pell recipients
or students who are eligible for Pell grants. In addition, the CRRSAA explicitly provides
that financial aid grants to students may be provided to students exclusively enrolled in
distance education.

Institutions may not (1) condition the receipt of financial aid grants to students on
continued or future enrollment in the institution, (2) use the financial aid grants to satisfy
a student’s outstanding account balance, unless it has obtained the student’s written (or
electronic), affirmative consent, or (3) require such consent as a condition of receipt of or
eligibility for the financial aid grant. 3

Institutions should carefully document how they prioritize students with exceptional need
in distributing financial aid grants to students, as the Department intends to establish
reporting requirements regarding the distribution of financial aid grants to students
consistent with section 314(e) of CRRSAA.

3
The Department’s guidance for emergency financial aid grants under section 18004(a)(1) of the CARES Act
did not advise institutions to use such grants to satisfy a student’s outstanding account balance. However, upon
further consideration, the Department believes that allowing students to consent to the application of a
CRRSAA financial aid grant to their student accounts would facilitate such a use of funds, if desired by the
student, while retaining the student’s discretion to determine what costs should be covered with his or her
financial aid grant funds.

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5. Question: How may students use their financial aid grants?

Answer: Financial aid grants for students may be used for any component of the
student’s cost of attendance or for emergency costs that arise due to coronavirus, such as
tuition, food, housing, health care (including mental health care) or child care.

See Question 19 of the Higher Education Emergency Relief Fund (HEERF) Frequently
Asked Questions (FAQ) Rollup Document for more details as to how institutions may
pay the financial aid grants to students, if not applying it to a student’s account after
obtaining the student’s written (or electronic), affirmative consent.

6. Question: How long does a proprietary institution have to apply for the (a)(4) program?

Answer: CRRSAA section 314(f) requires that proprietary institutions apply for funding
within 90 days of the publication of the Notice Inviting Applications, which is April 15,
2021.

CARES Act (a)(1) Program

7. Question: My proprietary institution received a CARES Act section 18004(a)(1) Student
Aid Portion (CFDA 84.425E) and/or Institution Portion (CFDA 84.425F) grant. How has
the use of funds changed for any of these unspent CARES Act grant funds?

Answer: The expanded use of funds authority under the CRRSAA also applies to any
unspent CARES Act (a)(1) program funds. Institutions may use those unexpended funds
for the following:

• Defraying expenses associated with coronavirus (including lost revenue,
reimbursement for expenses already incurred, technology costs associated with a
transition to distance education, faculty and staff trainings, and payroll);
• Carrying out student support activities authorized by the Higher Education Act of
1965, as amended (HEA), that address needs related to coronavirus; and
• Making financial aid grants to students in the same way they are allowed to use
their Proprietary Institution Grant Funds for Students, including by providing
such grants to students exclusively enrolled in distance education (as described in
Question 4).

Institutions have this expanded flexibility to use unliquidated (unspent) funds effective
December 27, 2020 (the date of enactment of the CRRSAA), for costs incurred on or
after March 13, 2020, the date on which the President declared a national emergency
due to the COVID-19 pandemic (85 FR 15337).5

Please note that under section 314(d)(5), an institution that utilizes the expanded use of
funds authority under the CRRSAA for its unspent CARES Act funds must ensure at
least 50% of the funds it received under CARES Act section 18004(a)(1) (generally, its
Student Aid Portion award) is used for financial aid grants to students. (Revised March
19, 2021).

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8. Question: What “student support activities” may be supported by the expanded uses of
funds for my unspent Institutional Portion CARES Act funds?

Answer: Section 314(c)(2) allows a proprietary institution to use unexpended
Institutional Portion CARES Act funds (CFDA 84.425F) on student support activities
authorized by the HEA, where those student support activities address needs related to
the coronavirus. The Department interprets this provision to, among other authorized
activities, authorize grantees to use CRRSAA funds to carry out TRIO and Gaining Early
Awareness and Readiness for Undergraduate Programs (GEAR UP) program activities to
the extent that those activities address needs related to the coronavirus.

For example, (a)(1) institutional funds may be used to support the transition to virtual
activities, purchase PPE, or support other innovative learning methods that would allow
an institution to engage in student support activities authorized under the HEA during the
COVID-19 pandemic.

9. Question: My proprietary institution received a CARES Act HEERF grant. Will my
institution be able to receive a grant under the (a)(4) program if we have not yet complied
with the quarterly or annual reporting requirements for the HEERF grant program?

Answer: Proprietary institutions that have not yet complied with the reporting
requirements of the CARES Act may receive (a)(4) awards with a restriction on the
ability to use (drawdown) those awarded funds (stop payment status) until the institution
has satisfied its CARES Act HEERF reporting obligations.

Grant Administration

10. Question: Do the existing CARES Act HEERF FAQs still apply?

Answer: Except for the differences explained herein, the existing CARES Act HEERF
FAQs continue to apply to an institution’s previous expenditures under its existing
CARES Act HEERF grants. As explained by Question 7, CRRSAA section 314(d)(2)
allows institutions expanded use of funds authority for unexpended CARES Act funds.
The Department is in the process of identifying and clarifying which specific FAQs may
continue to be relied upon with the new CRRSAA and for an institution’s unexpended
CARES Act funds.

11. Question: Does the June 17, 2020 Interim Final Rule (IFR) (85 FR 36494) limiting
student eligibility for emergency financial aid grants under the CARES Act to students
who are or could be eligible to participate in the Department’s Title IV Federal student
financial aid programs under HEA Section 484 apply to HEERF programs under
CRRSAA?

Answer: No. The IFR and its implementing regulation, 34 CFR § 668.2, apply only to
funds made available under the CARES Act and not to funds made available under
CRRSAA.

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12. Question: When should my institution draw down funds once they have been obligated
by the Department?

Answer: Although the entire amount of a grantee’s (a)(4) award will be available to the
grantee as soon as it has been obligated by the Department, under 2 CFR § 200.305(b),
HEERF grantees are under an obligation to minimize the time between drawing down
funds from G5 and paying obligations incurred by the grantee (liquidation). If a HEERF
grantee is using HEERF grant funds to make financial aid grants to students, the
Department may evaluate for compliance with the rule grantees who have not drawn
down the funds from G5 and not paid the obligations (the financial aid grants to students)
to the students within fifteen calendar days. For all other allowable uses, the Department
may evaluate grantees who have not taken these steps within three calendar days. This
enhanced flexibility for student grant programs is because students may not accept and
draw down their financial aid grants from grantees’ accounts within the three day
window, or an institution may experience difficulties in contacting eligible students due
to factors related to the pandemic.

13. Question: Can my proprietary institution charge indirect or administrative costs to the
(a)(4) grant award?

Answer: No. Proprietary institutions may not charge any indirect or administrative costs
to funds made available under this award as the allocation in this grant award represents
an amount of funds that must be distributed to students.

14. Question: Do proprietary institutions have to submit an audit regarding the use and
expenditure of HEERF grant funds?

Answer: It depends. Proprietary institutions must have a compliance audit conducted of
its administration of the HEERF grant(s) for any institutional fiscal year during which:
(1) the institution expended $500,000 or more in total HEERF grant funds, whether under
section 18004(a)(1) of the CARES Act or section 314(a)(4) of the CRRSAA, or (2) was
on Federal Student Aid’s Heightened Cash Monitoring (HCM) 1 or 2 list during any
point of the institution’s fiscal year in which it expended any HEERF grant funds. The
Department will communicate with grantees on timing and audit submission procedures.

15. Question: Where can I obtain more information about the HEERF program?

Answer: Institutions should regularly check our HEERF II CRRSAA website for the
latest CRRSAA information and program guidance. For earlier CARES Act information
and program guidance, please check our HEERF CARES Act website here.

FAQs added March 19, 2021:

16. Question: Under the Uniform Guidance requirements, institutions must receive prior
written approval (prior approval) for a many types of costs under 2 CFR § 200.407. Is
that prior approval required for HEERF grants?

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Answer: Generally, no. This FAQ constitutes notice that due to the COVID-19
pandemic, the Department is providing its prior approval for the following cost items for
all formula grants under the HEERF program from March 13, 2020 through the period of
grant performance specified under your institution’s GANs for all HEERF grants. For
proprietary institutions, these flexibilities are as follows:

Waivers for section 18004(a)(1) CARES Act grants:

• § 200.308 Revision of budget and program plans
• § 200.313 Equipment
• § 200.430 Compensation—personal services, paragraph (h)
• § 200.431 Compensation—fringe benefits
• § 200.456 Participant support costs (defined at § 200.75)
• § 200.458 Pre-award costs
• § 200.475 Travel costs

Waivers for section 314(a)(4) CRRSAA grants:

• § 200.458 Pre-award costs

All cost items charged under these categories must be documented and, as with all costs,
must be reasonable and necessary for the performance of the grant per the Cost Principles
of the Uniform Guidance, 2 CFR part 200 subpart E.

Please note that, per the Certification and Agreements and Supplemental Agreements for
the HEERF program and under section 314(d)(3) of the CRRSAA, senior administrator
and executive salaries, benefits, bonuses, contracts, and incentives; stock buybacks,
shareholder dividends, capital distributions, and stock options; and any other cash or
other benefit for a senior administrator or executive are not allowable costs under the
HEERF program.

Other cost items listed in 2 CFR § 200.407 that require prior approval continue to require
the institution to seek approval from the Department prior to charging those cost items to
your HEERF grant. Please email your assigned education program officer contact as
indicated by Box 3 in your GAN with any questions. (Added March 19, 2021).

17. Question: Can institutions use HEERF grant funds (unspent CARES Act funds,
CRRSAA funds, and American Rescue Plan funds) to make financial aid grants to non-
degree seeking, non-credit, dual enrollment, continuing education students or students
who are qualified aliens?

Answer: Yes. Institutions can use HEERF grant funds to make financial aid grans to
non-degree seeking, non-credit, dual enrollment, and continuing education students.
Students who are qualified aliens, as defined within 8 U.S.C. section 1641 (including
refugees and persons granted asylum), may also receive HEERF financial aid grants. As
always, students have discretion about how they receive their grants and institutions must

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receive affirmative consent from students before using a financial aid grant to satisfy
outstanding bills. (Added March 19, 2021).

18. Question: Can my institution charge financial aid grant expenses to my CRRSAA award
if we made financial aid grants to student that were not otherwise covered by CARES Act
funds before December 27, 2020?

Answer: Yes. Institutions may charge aid grant expenses to their CRRSAA award if they
made financial aid grants to student that were not otherwise covered by CARES Act
funds and that were incurred on or after March 13, 2020, the day the national emergency
was declared, to their CRRSAA awards. (Added March 19, 2021).

19. Question: How much time do institutions have to disburse their CARES Act and
CRRSAA funds?

Answer: Institutions generally must expend their HEERF funds within one year from the
date when the Department processed the most recent obligation of funds for each specific
grant. Thus, proprietary institutions have one year from the date of obligation of their
CARES Act award to expend those funds, and one year from the date of their CRRSAA
obligation to expend their (a)(4) grant funds. No-cost extensions up to one year are also
available under certain circumstances. Institutions may contact their assigned grant
program officer identified on the GAN for more details on requesting an extension.
(Added March 19, 2021).

20. Question: Can students who have left school (for any reason) at any time since the
declaration of the national emergency receive financial aid grants?

Answer: Yes. Institutions may choose to make financial aid grants to students who have
left school for any reason during the period of the national emergency, beginning on
March 13, 2020, the date of the declaration of the national emergency.

As always, students have discretion about how they receive their grants, and institutions
must receive affirmative consent from students before using financial aid grants to satisfy
a student’s outstanding account balance. (Added March 19, 2021).

21. Question: Can students give institutions permission to apply CRRSAA funds to student
account charges that were posted to the student’s account prior to December 27, 2020?

Answer: Yes. Institutions may, with a student’s permission, make financial aid grants to
students to satisfy account charges that were posted to the student’s account prior to
December 27, 2020, so long as that student was enrolled during a period of time for
which the national emergency was declared.

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22. Question: Can institutions use student accounts as a pass-through vehicle to disburse
CRRSAA funds without a student’s consent if 100% of the award is provided directly to
the student’s account and 0% is applied to institutional or other charges?

Answer: Yes. Institutions may provide emergency financial aid grants directly to
students using the normal process for providing credit balances to students without
obtaining a student’s consent, so long as these funds remain unencumbered by the
institution.

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