How the American Rescue Plan funding will help higher ed

On March 10, 2021, Congress passed the American Rescue Plan. The American Rescue Plan Act (ARPA) is allocating $40 billion for Colleges and Universities to invest in student success. Many institutions are using these funds to invest in student success technology, staff training, retention programs and other efforts that support students throughout their educational journey.

Most of ARPA funding will go to public and private nonprofit institutions. If your institution received CARES or CRRSAA funding, it is likely eligible to receive ARPA funds.

Here are 6 things all higher ed leaders should know about ARPA funding:

1. IT'S A LOT OF MONEY: ARPA allocated ~$40B in dedicated higher ed funding—more money than CARES ($14.2B) and CRRSAA ($22.7B) combined

2. HALF WILL BE USED AS STUDENT EMERGENCY FUNDING : The law requires that 50% of formula-allocated funding be awarded as emergency financial aid, like the CARES Act. The Higher Education Emergency Relief Fund (HEERF) allocation formula is the same as CRRSAA. This means that students will receive significantly higher direct emergency funding from ARPA than they did from CRRSAA or cares ($18BN through ARPA).

Like CRRSAA, funds can be used to cover expenses associated with the Pandemic, including defraying lost revenue. Finally, ARPA requires institutions to use a portion of their funds to implement public health and safety best practices as well as to conduct outreach to financial aid applicants about opportunities for additional aid.

3. THE ALLOCATION FORMULA IS THE SAME AS CRRSAA: The funding formula is the same as the one used for CRRSAA. It accounts for part-time students which will ensure that community colleges along with four-year publics receive a proportionate share given their enrollment composition. A few small changes were made which will result in a greater proportion of the money going to non-profits and publics.

Since the funding formula is identical to CRRSAA, institutions can predict their ARPA funding by multiplying their total CRRSAA award by 1.75. Eg: An institution that received $1M through CRRSAA would likely receive $1.75M under ARPA and would have to award $880K to students as emergency financial aid.

4. DEPLOYMENT TIMELINE IS STILL UNCLEAR: The timeline of when ARPA funding will be distributed is still unclear although it will likely distribute the funding as soon as possible. Institutions may have to submit a new application to receive ARPA funding however, since the expense window start date is 12/27/2020, expenses occurring after that date will be eligible for HEERF aid.

5. OVERALL THIS IS GREAT NEWS FOR HIGHER ED: In the short-term, ARPA’s $350B in state and local stimulus aid should mitigate the most dramatic cuts to public higher ed funding. This is great news for higher education institutions, especially community colleges who are highly dependent on local and state support.

EdSights partners with institutions to help them support students using AI and SMS texting. Over the past year we've helped institutions distribute emergency aid, communicate financial opportunities and ensure that students are being supported in a timely and scalable way. To learn more about our student success programs get in touch through this form.