Client Alert – House Democrats’ Third COVID-19 Response Bill Includes $40 Billion for Schools and Universities

While negotiations continue on the United State Senate’s COVID-19 emergency relief bill, Democrats in the House of Representatives have unveiled their own stimulus plan.  The Democrats’ response bill, which is more than 1,000 pages long, proposes injecting some $40 billion into schools and universities to stabilize educational funding.

The Democrats’ counterproposal allocates $30 billion for a “State Fiscal Stabilization Fund,” to “prevent, prepare for and respond” to coronavirus.  The proposal vests the Secretary of Education with the authority to make grants to the Governor of each state for “support of elementary, secondary, and postsecondary education and, as applicable, early childhood education programs and services.”  For example, institutions of higher education receiving these funds “shall use funds for education and general expenditures and grants to students for expenses directly related to coronavirus and the disruption of campus operations,” or “for the acquisition of technology and services directly related to the need for distance learning and the training of faculty and staff to use such technology and services.”  Priority shall be given to “under-resourced institutions, institutions with high burden due to the coronavirus, and institutions who do not possess distance education capabilities.”  Further, under this proposal, $9.5 billion shall remain available to schools until September 30, 2020, to “prevent, prepare, and respond” to COVID-19.  The proposed bill includes limitations on payments, as well.  For instance, payments shall not be used to increase endowments, or for capital outlays relating to facilities for athletics or religious worship.

For more information, please contact Tricia B. O’Reilly at [email protected] or (973) 757-1104 or Hector Daniel Ruiz at [email protected] or (973) 757-1019.

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