Washington, D.C. — Today, the Center for American Progress released a new brief looking at how the recently passed Coronavirus Aid, Relief, and Economic Security Act (CARES) Act’s funding formula for distributing aid to institutions of higher education directs too much funding to wealthier and for-profit colleges at the expense of public colleges. The piece looks at what schools need to weather the financial fallout of the coronavirus pandemic and how Congress can better target this support in future legislation.
To stave off devastating state cuts—and the subsequent tuition increases that would accompany them—the brief calls on Congress to provide an explicit fund for direct support to public colleges and universities, rather than a single fund that forces public colleges to compete for dollars against wealthy private colleges and poor-performing for-profits. In the absence of a specific fund for public institutions of higher education, the report also includes modeling of how various changes to the CARES Act institutional aid funding formula—including banning or limiting for-profits; a distribution based on head count distribution; or both limiting for-profits to emergency aid and using head count enrollment—could better target resources to schools that serve more low-income students and students from marginalized communities.
Key findings from the brief include:
- Under the CARES Act, public colleges of two years or less educate almost 40 percent of students, yet these institutions only received about 27 percent of the funds. Additionally, four-year private nonprofit colleges benefit substantially from the non-Pell allocation—due in large part to graduate student enrollment.
- Public colleges received nearly $300 million more from the CARES Act thanks to the exclusion of online-only students.
- Excluding for-profit higher education institutions from the CARES Act formula would increase public college funding by 10 percentage points.
- If funds were distributed to schools based on the number of students they serve, rather than just the number of full-time equivalent students enrolled, less-than-four-year public colleges would receive 39 percent of funds, up from the 27 percent they got under the CARES Act.
- Limiting for-profits to emergency aid on top of using head count enrollment is the most feasible change to the formula; it would increase funds to public colleges by 8 percentage points.
Please click here to view estimates for how these proposed changes would effect aid totals at the institution-level.
“The future of public higher education in this country is at risk if the federal government fails to provide substantial aid to our nation’s public colleges, which rely predominantly on state funding to keep their doors open. But not enough of the aid Congress has dedicated to higher education has gone to community colleges and public institutions that desperately need the help. That is why Congress must consider the formula changes outlined in this brief,” said Ben Miller, vice president of Postsecondary Education at CAP and author of the brief.
Please click here to read: “A Better Formula for Higher Education’s Federal Coronavirus Funding: Increasing, Improving, and Accelerating Funding for Higher Education in the Next Stimulus Package” by Ben Miller
For more information or to speak with an expert, please contact Colin Seeberger at gro.ssergorpnacirema@regrebeesc.
To find the latest CAP resources on the coronavirus, visit our coronavirus resource page.