May 2020 Federal News of Note
U.S. House Passes Latest COVID-19 Relief Legislation
On May 15, 2020, the U.S. House passed the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES) Act (H.R. 6800). The latest COVID-19 relief package was introduced by House Democratic lawmakers and passed mostly along party lines.
Key takeaways affecting education include:
- Increased Institutional Aid – Allocates $100 billion to support schools and higher education institutions, including $90 billion for a State Fiscal Stabilization Fund for grants to states to support K-12 schools and public colleges and universities and $10 billion to alleviate coronavirus-related costs for private colleges and universities, including Minority-Serving Institutions.
- Adjustments to Main Street Lending Program – Expands eligibility to all nonprofits (including schools, colleges, and universities), and requires the Federal Reserve to provide nonprofits a low-cost loan option plus the ability to defer payments. Additionally, the loans could be forgiven for non-profits predominately serving low income communities that are ineligible to receive a Paycheck Protection Program (PPP) loan.
- Modifications to Paycheck Protection Program – Extends the covered period for the program from June 30 to December 31, 2020. The bill also expands eligibility to all nonprofits (including private schools, private colleges, and private universities) regardless of their employee count. Under the CARES Act, the program was limited to small businesses with fewer than 500 employees.
- Improvements to Employee Retention Tax Credit – Makes public institutions eligible for credit; expands the refundable payroll tax credit up to 80% of $15,000 and $45,000 in the aggregate in wages paid to each employee per quarter during the COVID-19 crisis.
- Expansion of Emergency Paid Sick Leave and Family and Medical Leave Tax Credits – Removes the limitation on public sector employers enacted in the Families First Coronavirus Response Act (FFCRA), allowing public colleges and universities to receive the 100% refundable tax credit on the payroll taxes required to be paid under such leave and additional health benefits. Additionally, large private nonprofits (including private schools, private colleges, and private universities) would be eligible for the tax credits.
- Exemption of Emergency Financial Aid Grants from Taxation – Exempts from taxation all CARES Act emergency student financial aid grants and any institution-provided emergency student financial aid grants.
- Increased Federal Funding for State and Local Governments – Provides $500 billion in funding to assist state governments and $375 billion in local fiscal relief funding, which could be allocated to benefit public colleges and universities.
The package also includes additional funding for food and nutrition assistance, unemployment benefits, and coronavirus testing and tracing. Read the House Appropriations Committee summary and the American Council on Education’s (ACE) summary for more details on specific provisions.
CASE joined ACE and higher education association colleagues in a letter of support prior to the bill’s passage in the House. The Senate is not expected to consider their version of relief legislation until after the Memorial Day holiday. Ultimately, the final bill will likely reflect a compromise between the House, Senate, and Administration.
U.S. Department of Education Releases Final Title IX Rule, Requires Implementation by August 14, 2020
On May 6, 2020, the U.S. Department of Education (Department) released the final Title IX rule, reversing the previous administration’s guidance on campus sexual harassment and assault. Title IX of the Education Amendments of 1972 prohibits sex discrimination under any federally funded education program or activity.
Announcement of the final rule follows a lengthy comment and review period on the Department’s proposed rule released in November 2018. In January 2019, CASE submitted comments with the American Council on Education (ACE) and other higher education associations voicing both support for certain aspects of the proposed regulation and significant concerns. CASE also joined ACE in a letter on March 24, 2020 to Secretary Betsy DeVos urging the Department to suspend regulatory efforts related to Title IX until the COVID-19 situation is resolved and institutions have returned to normal operations. Despite these efforts, the Department neither delayed regulatory action nor included the most significant recommendations of the higher education community in the final rule.
More than 2,000 pages, the new rule regulates how U.S. federally funded schools, colleges, and universities should respond to campus sexual harassment and assault claims. It also requires institutions to comply with the regulations by August 14, 2020.
Major provisions with changes include:
- Definition of Title IX – The definition is narrowed, requiring incidents to meet the more demanding standard of “so severe, pervasive, and objectively offensive” to be reported under Title IX.
- Application to education programs and activities – Schools, colleges, and universities are not legally obligated to investigate incidents that take place off campus at independent locations. Institutions can also choose whether to handle complaints that occur during study abroad or oversees programs, since the new rule does not require institutions to respond to reports outside the U.S.
- Title IX staffing and training – The rule requires institutions to have multiple staff work through various parts of individual cases, moving away from the “single investigator model.” Additionally, all involved staff must be trained on the new rule, and updated training materials must be published by August 14.
- Investigations and hearings – Institutions are now required to permit cross-examinations of involved parties during live-hearings led by school officials, shifting to a more legalistic process.
While a congressional response to the Department’s Title IX rule is unlikely, the American Civil Liberties Union (ACLU) is seeking relief through the judicial system. CASE will work with our higher education partners to address the new Title IX rule.