Just when the Federal Update is put to bed, there’s something new to report.
CARES Act —
Every day seems to bring a new wrinkle in the CARES Act, which directs the U.S. Education Secretary to distribute $12 billion by formula to higher education institutions in the U.S. It also includes an additional $1 billion for HBCUs and other minority serving institutions (MSIs), $300 million for campuses particularly hard hit by costs associated with the virus, with priority to schools that didn’t receive at least $500,000 of the $12 billion, and provides monies to each state’s governor. In South Carolina Governor McMaster has $48.7 million in discretionary CARES funding to distribute to K-12 public schools, technical colleges, as well as public and private four-year colleges and universities.
Of the monies being distributed by the Secretary of Education DeVos, half of what each institution receives must be given directly to students in the form of emergency grants, and half can be spent by the institution in addressing the disruptions caused by COVID-19.
Not surprisingly, an 800+ page bill written in a few days contains some ambiguities. Since the March 27th passage of the CARES Act, we have been working to gain clarification from the U.S. Department of Education and understand how the “student half” and “institutional half” are to be spent. The good news is a number of campuses have received the student half and have started distributing the funds to their students. Campuses cannot apply for the institutional half until they have applied for the student half. Many of our campuses have to-date still not received those funds.
The legislation also created unintended consequences. The emergency grants received by students had been considered taxable income to the students. We have only recently been informed that the IRS will consider the grant to be not taxable.
Payroll Protection Program —
The new Payroll Protection Program loans administered through the Small Business Administration are limited to institutions with 500 or fewer employees. However, the legislation treated full-time and part-time employees equally, meaning that part-time student workers, including federal work-study students, were counted towards the 500 employee limit. This effectively excluded several SCICU institutions from participation in the Payroll Protection Program.
Now the SBA has clarified that student workers who participate in the Federal Work-Study (FWS), Work Colleges, or Job Locator and Development programs, or similar programs funded by states and municipalities, can be excluded from the employee count for PPP loan eligibility.
April 22 Executive Order limiting immigration —
From the White House, President Trump signed an executive order on April 22 limiting immigration to the U.S. for the next 60 days in order to protect the health and jobs of Americans put at risk by COVID-19. The order suspends new immigrant visas for 60 days, and applies to people who are currently outside the U.S. seeking entry and do not currently have a valid visa. The executive order does not apply to those who are already lawful permanent residents or healthcare professionals seeking an immigrant visa to help fight the pandemic in the U.S. Spouses and children under 21 who are immediate family members of U.S. citizens, and U.S. military personnel are also exempt from the ban. We are very concerned about the impact of the ban on recruiting international students to SCICU member institutions.
New Title IX regulations —
As significant as is the CARES Act, of even longer lasting impact to colleges and universities are the new federal Title IX regulations which govern how campuses address sexual assault and sexual harassment.
The new regulations, more than 2,000 pages of them (a summary is available), make significant changes to how most campuses operate by requiring a system of adjudication that is more like court, including the right to cross-examine individuals who have made a sexual assault claim. However, the survivors do not have to appear in person. Campuses will also be required to adopt a single standard of evidence for students, faculty and staff – either the more rigorous “clear and convincing evidence,” or the current requirement, “preponderance of evidence,” which is defined as 51 percent of the evidence favoring a finding of fault.
Despite requests from campuses and higher education organizations for more time to implement, the new regulations must be implemented by August 14 of this year.