Higher Ed’s Parachute

Inside Higher Ed

Lilah Burke

March 22, 2021

With the ink now dry on Congress’s $1.9 trillion stimulus package, some colleges and universities have begun making plans for the money they’re slated to get. Many of those plans include covering budget shortfalls from last year or expected ones this year.

The nation’s nonprofit institutions are set to get about $36 billion from the package. The text of the legislation stipulates that colleges and universities must spend at least half the money they receive on emergency aid to students. However, some institutions are considering allocating more than that to students.

“As we work through this, providing enough aid for our students will be our top priority,” said Patricia McGuire, president of Trinity Washington University. “I think we will still have so much need we will continue to spend the institutional portion on aid as well.”

Eighty percent of Trinity’s students are eligible for federal Pell Grants. McGuire said that another priority will be buttressing the college’s tech capacity — an endeavor that would include improving home internet access for students and expanding the institutional server capacity. Many students had issues with bandwidth this year while learning remotely, McGuire said.

After those tasks and potentially some investments in faculty development, a portion of the money will go to covering lost revenue for the past year, McGuire said. In addition to room and board losses, Trinity lost about $1 million from the cancellation of conferences for this year. The congressional funds will help the college meet financial expectations set by the bank that holds its loans.

Other colleges have made similar plans for their allocations.

“For the dollars allocated to the university out of the American Rescue Plan, OU plans to put much of it toward reimbursing COVID-related expenses from the past year,” said a spokesperson from the University of Oklahoma via email.

Institutions can’t say for sure how much they’ll be getting from the package, but the Education Department will likely take into account general head count as well as the number of students eligible for Pell Grants at each institution. A distribution simulation from the American Council on Education estimates that OU will receive around $49 million (with half of that to be given to students).

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