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In this round, $350M in pipeline for colleges

Students to get lion’s share of U.S. funds by Jaime Adame | May 30, 2021 at 3:09 a.m.
Old Main on the University of Arkansas, Fayetteville campus is shown in this Aug. 30, 2014, file photo. (NWA Democrat-Gazette file photo)

More than $350 million in the latest round of federal coronavirus relief aid is flowing to colleges and universities in Arkansas, according to U.S. Department of Education data released earlier this month.

Student emergency grants make up more than half that total. The remaining portion can be used "for institutional purposes," according to the federal Education Department. The institutional aid is meant to help with "defraying expenses associated with the coronavirus," including lost revenue and cost reimbursements.

The latest round of funding as well as previous rounds have been used by schools preparing their budgets for the next fiscal year after enrollment declined at many colleges and all dealt with changes caused by the coronavirus pandemic.

"We have had a lot of challenges, as you're well aware," Gina Terry, the chief financial officer for the University of Arkansas System, said Thursday in a discussion about campus budgets during a trustees' meeting. "We have had quite a bit of support from the federal government and certain campuses incorporated that."

Compared with previous federal coronavirus relief packages that also provided students with grant aid, the latest one is larger. It also makes all students eligible for emergency grants of the type disbursed by colleges and universities, a college official said.

[CORONAVIRUS: Click here for our complete coverage » arkansasonline.com/coronavirus]

Another change for colleges is that, unlike with past federal relief, a new state law establishes an approval procedure involving the state Department of Finance and Administration as well as lawmakers.

The latest relief funds are part of what's known as the American Rescue Plan. Throughout the country, the legislation is providing $39.6 billion to higher-education institutions, according to the U.S. Department of Education.

That's more money for higher education than the two previous federal relief packages combined, the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Coronavirus Response and Relief Supplemental Appropriations Act, according to the U.S. Department of Education. The three emergency relief packages add up to $76.2 billion for higher education.

When it comes to the student aid, universities contacted by the Arkansas Democrat-Gazette referred to a student's financial need being a factor in deciding award amounts.

The University of Arkansas, Fayetteville is receiving about $42.3 million, including a minimum of nearly $21.3 million for student grants, the most of any college or university in the state.

The grants will be given out "according to federal guidelines based on need," UA-Fayetteville spokesman Mark Rushing said Tuesday in an email.

"We are currently in the process of reviewing available guidance from the U.S. Department of Education while developing a distribution process for students as well as a plan to help offset institutional losses experienced during the pandemic. No final decisions or timetables are available at this time," Rushing said.

At the University of Arkansas at Little Rock, a plan is taking shape to disburse the latest student grants, according to Cody Decker, UALR's vice chancellor for student affairs.

The American Rescue Plan "funds will be disbursed over the next academic year (fall 2021, spring 2022, and summer 2022), with initial disbursements occurring at the beginning of the fall term," Decker said Tuesday in an email.

UALR will deliver aid directly while also accepting applications, Decker said.

The direct undergraduate aid uses a formula that takes into account the amount of a student's unmet financial need, Decker said.

By also having application-based aid, Decker said the university "enables students to submit additional requests for funding to cover coronavirus-related expenses." He said it is not yet known how large the grants will be for students.

Colleges in the state have gained experience disbursing student grant aid, but Decker said there are changes with the American Rescue Plan, which he referred to by its initials, ARP.

"Unlike previous versions of coronavirus financial aid grants, the ARP changed the definition of eligible students to make all enrolled students (approximately 7,500 students) eligible for ARP funds," Decker said, referring to UALR's enrollment.

With past student relief grants, many colleges required students to fill out a Free Application for Federal Student Aid to be eligible for the grant dollars.

Decker said that the new round of grants still will be "largely based on the student's unmet financial need," even though it won't be an eligibility requirement to fill out the application.

Not all students are eligible for the most common types of federal financial aid awarded through the free application system. Students granted temporary authorized status through the Deferred Action for Childhood Arrivals program, for example, are not eligible for federal aid.

UALR is set to receive nearly $18.8 million this time around, including a minimum of nearly $9.8 million for student grants.

As for the institutional portion of the relief aid, Decker said UALR has yet to determine how it will allocate those dollars, but he added that "it is likely that some part of it will be used for recovery of lost revenue due to the pandemic."

Bill Smith, a spokesman for Arkansas State University, said in an email Wednesday that a campus committee will meet "to discuss the guidance they have received and finalize a plan for how and when students will receive aid." The same group will discuss how best to use the portion allotted for use by the institution, he said.

Smith said the state Department of Finance and Administration must approve the university's plan.

Scott Hardin, a spokesman for the finance department, said this requirement comes from a new state law, Act 997, which says: "Any state agency, constitutional office, or institution shall request a transfer of appropriation, as provided in the American Rescue Plan Act of 2021 Appropriation Sections of this Act, from the Chief Fiscal Officer of the State (DFA), stating clearly the amount requested, purpose and any additional information requested by the Chief Fiscal Officer of the State."

Hardin said there is no requirement for private colleges and universities to receive finance department approval for their use of American Rescue Plan funds.

Act 997 also states that a request made to the finance department for an American Rescue Plan appropriation "shall require prior approval by the Legislative Council during the extended recess, beginning on May 1, 2021, of the 2021 Regular Session," or by the state's Joint Budget Committee.

A May 6 memo from Larry Walther, director of the state's finance office, to all state agencies tells them to "be prepared to explain and justify the requests as needed." Hardin provided the memo.

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