Is assistance with community college, college tuition or other higher education challenges an eligible use of ARP funds?

The U.S. Department of the Treasury’s (“Treasury”) Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) Final Rule provides recipients with a flexible approach that sets guidelines on eligible uses of Fiscal Recovery Funds (“FRF”) and affords municipal officials the discretion to direct funds to the eligible uses of greatest need.[1]

The Final Rule focuses on eligible uses of funding to address disparities in early education; postsecondary education is not mentioned. Furthermore, “tuition” is not explicitly defined in the American Rescue Plan Act of 2021 (“ARP”)[2] or the Final Rule. [3]  

Though not specifically mentioned, the use of ARP funding for higher education (post-high school) tuition or other costs related to degree completion may align with the “assistance to households” category. According to the eligible uses defined in 35.6(b)(3)(ii)(A),[4] recipients may use funds to respond to the public health emergency or its negative economic impacts, including assistance to households. Assistance to households can include job training and cash transfers from the recipient to individuals, but would require that: (i) a household or population experienced economic harm; (ii) the use of funds is in response to the COVID- 19 public health emergency; and (iii) the amount is not grossly in excess of the amount needed to address the negative economic impact identified by the recipient.[5]

As described in both the legislation and the Final Rule, a recipient may apply ARP funds to four categories of use, one of which is “the provision of government services to the extent of the reduction in revenue due to the COVID–19 public health emergency.”[6]

Treasury has defined “government services” as:

includ[ing], but…not limited to, maintenance or pay-go funded building of infrastructure, including roads; modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; and the provision of police, fire, and other public safety services. [7]

If a recipient chooses to apply ARP funds to post-high school programs, the recipient likely will need to tie its use of ARP funds to the provision of government services and to the extent of revenue reduction of the recipient due to the public health emergency.[8] For example, if a community college, as a government service, is determined to be a municipality’s area of greatest need, then the use of ARP funds for that college would require demonstrating a nexus to the municipality’s reduced revenue calculations. Treasury’s guidance addresses how recipients can calculate the extent of the reduction in their general revenue.[9]

Other forms of funding may be explored to provide assistance with community college, college tuition, and higher education funding. For instance, in May 2021, the Department of Education announced the Higher Education Emergency Relief Fund (“HEERF”) and $36 billion in funds made available for emergency aid to public and private nonprofit institutions, as well as $396 million made available to proprietary colleges to serve students and ensure that learning continued during the COVID-19 pandemic.[10]

On January 31, 2022, the Department of Education announced an additional $198 million in new awards as Supplemental Support under the ARP. The Supplemental Support is offered to public and private nonprofit institutions for the purpose of assisting students who did not receive allocations under HEERF:

The SSARP Program assists public and private nonprofit institutions that have the greatest unmet need related to the coronavirus, as determined by the secretary after allocating available funds under HEERF III, including institutions with large populations of graduate students who otherwise did not receive a HEERF allocation under the American Rescue Plan Act, 2021. The Department urges institutions applying for the SSARP program to continue to use the funds to support campuses and students as they deal with the immediate challenges posed by the pandemic.[11]

Additional information addressing elements of Treasury’s recent guidance on using ARP funds for educational programs can be found in the following Bloomberg Federal Assistance e311 Q&A.[12]

Can municipalities use ARP funds to fund educational programs (e.g., Pre-K classrooms or gun violence prevention programs)?

Last Updated: February 16, 2022