DeVos Formally Limits Emergency Aid

After a series of fits and starts that colleges say has confused the distribution of emergency aid grants to help students dealing with the coronavirus pandemic, the Education Department finally issued an interim formal rule saying undocumented students and millions of others who are not eligible for regular student aid cannot receive the help.

In part, the department said it took the position out of fear that if colleges were able to hand out the grants to any student they wished, they could create fake classes and programs and use the grants to attract students to pad their enrollment and revenue.

Critics such as the American Council on Education, though, said they suspect Education Secretary Betsy DeVos wanted to limit who can get the grants as a way to exclude undocumented and international students. And indeed, in a statement, the department said the rule will “help to ensure taxpayer-funded coronavirus relief money is distributed properly and does not go to foreign nationals, non-citizens and students who may be enrolled in ineligible education programs.”

Grants that have already been handed out are not subject to the restriction, said the rule, which was quickly criticized by higher education institutions and advocacy groups. The rule will take effect when it is published in the Federal Register, which could happen any day.

The issuing of the rule, however, doesn’t end the confusion over which college students can get the grants, which are intended to help them pay for necessities like food and rent.

Federal judges in California and Washington are expected to rule, also any day, on lawsuits seeking injunctions to prevent the department from implementing its interpretation of who can get aid.

California’s community college system and the Washington State attorney general both argue in separate suits that DeVos is violating congressional intent by limiting who is eligible to get about $6 billion in grants Congress created in the CARES Act coronavirus relief package in March. U.S. District Judge Yvonne Gonzalez Rogers, who is presiding over the California case, appeared to be sympathetic toward the community colleges' arguments during a hearing Tuesday.

The rule is the latest chapter in what’s been a dizzying series of statements by the Education Department that has confused colleges about whom they could give the grants to and hindered the money from being distributed. California community colleges, for example, said they have kept in reserve millions of dollars they have received for the grants until the controversy is decided.

After DeVos initially said colleges would have wide discretion on who should get the grants, the department said in a frequently-asked-questions document on its website that only those eligible for regular student aid could receive them. That excluded not only undocumented students but veterans who rely on the GI Bill instead of regular student aid to go to college, as well as millions of others who have not filled out financial aid forms.

Then, three weeks ago, the department announced its previous guidance is not legally binding, as it argued the lawsuits should be dismissed. But on Monday, regulatory documents the department filed indicated it would be issuing the interim rule on Tuesday, only to have the department abruptly pull back, saying it would be at least a week before it would issue the rule. Then the department issued it two days later, on Thursday afternoon, shortly before a hearing on the Washington lawsuit began.

At the center of the debate is what to make of the fact that Congress did not define the term “student” in the CARES Act.

The department in the rule pointed to references in other parts of the stimulus bill to sections of the nation’s main higher education act governing the granting of regular financial aid. It conceded that the CARES Act doesn’t explicitly say the emergency grants could only go to those who qualify for regular aid, but that it has the discretion to interpret ambiguity in the law. The department also noted that the CARES Act does not explicitly say the grants are not subject to a ban created by the Clinton administration on undocumented people getting federal aid.

But Senate Democrats, advocacy groups and the lawsuits argued that by not defining students, Congress meant to give colleges wide discretion in handing out the grants, including to undocumented students.

Senator Patty Murray, the top Democrat on the Senate's education committee, blasted the rule. "As students across the country are struggling to make ends meet in the face of unprecedented financial challenges, Secretary DeVos’ efforts to deny some much-needed aid is cruel," she said in a statement. "These extreme eligibility requirements will not only harm students, but they are also contrary to Congressional intent. I’ll keep fighting to ensure that students get the relief they need -- and that Secretary DeVos implements the law as Congress intended."

Potential for Abuse?

The department in the rule also argued that distributing the Higher Education Emergency Relief Fund grants based on an established standard like qualifying for regular student aid would make it easier for colleges to hand out the money quickly.

But the department also said it had another concern. "The potential for waste, fraud and abuse is significant when institutions of higher education are given the opportunity to quickly make cash awards to students," the rule said, especially when colleges are worried about losing money and students during the pandemic.

“If a broad definition of ‘student’ were employed for purposes of emergency financial aid grants to students, unscrupulous institutions could create cheap classes and programming that provides little or no educational value and then use the HEERF grant funding to incentivize individuals not qualified under Title IV to enroll as paying students in those classes and programs, thereby qualifying for a grant,” the department said in the rule.

Among those excluded from the grants are students with poor grades, because they cannot receive other federal student aid. The department said colleges could hand out the emergency grants to encourage students with bad grades to re-enroll, “for the purpose of increasing revenues via the tuition such students would pay.”

Laying out other scenarios, the department also said colleges could use the 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.”

It's no surprise that the department’s rule reflected its previous views, ​​​said Daniel Madzelan, the American Council on Education’s assistant vice president for government relations and public affairs.

“But that does not mean we are not very disappointed that basically the department is ignoring roughly eight million students and their needs,” he said, scoffing at the fears colleges would use the grants as a “moneymaker.”

Congress, according to Madzelan, had said, “We trust your colleges and universities. The department is saying, ‘We don’t trust you.’”

Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, called the department’s reasoning “flimsy.”

"If ED was so concerned about fraud, waste and abuse, why did it give money to schools and then urge them to get that money out quickly, before issuing any guidance or regulation on student eligibility?" he said. "ED made it clear from the outset that emergency grants could not be applied to outstanding balances at an institution, so there was little chance that schools would just keep the money for themselves."

Ben Miller, vice president for postsecondary education at the progressive Center for American Progress, also criticized the rule.

“Even if this was the right policy call (which it unequivocally wasn’t) who is it helping to publish a rule two months after colleges could start applying for funds?” he said via email. “All this does is create confusion and potentially delays getting money into the hands of students.”