Navigating COVID-19 In Higher Education

Nelia Kruger, CPA, MSA

17 June 2020

On March 13, 2020, the President of the United States declared a national emergency concerning the novel coronavirus disease (COVID-19) outbreak. While the news was the most significant at the time, it’s hard for many people to believe this was just three short months ago. For those in the higher education industry, the effects of COVID-19, that declaration and the subsequent aftermath continues to reverberate as institutions grapple with the present and the future of higher education.

The many facets of COVID-19 on campuses could lead this article into a myriad of possible discussions from employee health and financial wellbeing, institutional risk assessments, going concerns, legal ramifications and student survival, both academic and personal, just to name a few. This article cannot begin to cover all the topics but, I hope you find this to be a repository of useful financial and student information in one place that you can refer to as you and your institutions navigate COVID-19.


The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law by President Trump on March 27, 2020. The economic relief package provided over $2 trillion to protect the American people from the public health and economic impacts of COVID-19. Page 143 of the act specifically addressed the Department of Education’s (ED) portion of the funding.


The Higher Education Emergency Relief Fund (HEERF) is a subset of the educational portion of the CARES Act that designated approximately $14 billion to institutions of higher education to be passed on to students as well as to cover COVID-19 related expenses. The CARES Act provided several methods for distributing funds. ED released their distribution methodology in a Funding Cover Letter on April 9, 2020. Final allocations were released later on.
In accordance with the regulations, a minimum of 50% of the allocation is for students in the form of Emergency Student Financial Aid Grants. In an effort to jump start institutions to release student funds quickly, ED released a Student Funding Cover Letter and Certification for Funds almost immediately. A few weeks later, ED released Student Funding FAQs, which addressed many issues but continues to leave the awarding methodology in the hands of the institutions. The common theme remains the same – emergency student funds should be equitable, impactful and efficient. Student funding is for the sole benefit of the individual and can in no way benefit the institutions the funds pass through. Funds are meant to assist the neediest of students but also have a far-reaching effect over all students. Funds should be released and available as quickly as possible. The IRS even came onboard to further address the benefit these funds were to have on the students without providing any additional burden when they released their FAQs over the taxability of the emergency financial aid grants.

The remaining balance of the HEERF funds, which can certainly end up being less than 50%, are available to the institutions to cover costs of COVID-19 expenses, both previously incurred as well as future expenses. In mirroring the student portion of HEERF, ED also released an Institutional Funding Cover Letter, Certification for Funds and Institutional Funding FAQs. While ED encourages the funds to be used for the costs associated with the major changes in instructions, day-to-day safety and maintaining payroll, other uses such reimbursement of refunds provided and foregone revenue are also acceptable. Careful consideration for the use of the funding and the timing of that use are very important to the as ear-end financial reporting, Single Audit report and your audit engagement. It’s best to keep your auditor up to date on your institution’s plans for the funding.


In addition to HEERF, CARES provided relief for student financial aid offices in the form of temporary modifications to Title IV programs. The Congressional Research Service, a nonpartisan public policy research institute of the United States Congress, released a very simple and easy to follow summarization of student provisions related to campus-based financial aid programs, federal student loan modifications and other related changes – found HERE. ED is also releasing FAQs on Title IV program issues as they find necessary. ED also released additional guidance for COVID-19 related campus interruptions on April 3, 2020 through an initial electronic announcement then later updated the information on May 15, 2020 with an updated electronic announcement.


The CARES Act has provided the following provisions that could positively impact your development and fundraising office in the upcoming year:

– Creation of a temporary universal charitable contribution deduction – Sec. 2204 of the CARES Act creates a universal deduction for charitable contributions of up to $300. This deduction will apply to all taxpayers who do not itemize enabling them to deduct $300 worth of qualified charitable contributions from their AGI. Currently, this is temporary and will only apply to contributions made in 2020.

– Removal of charitable contribution limitation on cash gifts for individuals – suspends existing 60% AGI limitation for individual charitable contributions in 2020. Individuals can now deduct donations up to 100% of their 2020 AGI. This change only applies to cash contributions (gifts to donor-advised funds (DAFs) are not eligible).

– Increased charitable contribution limitation for corporations – The CARES Act increases the current taxable income limit on cash contributions made by corporations from 10% to 25% for 2020.


Fortunately, and perhaps unfortunately in some cases, available information is on overload. I hope this article helps put all the relative information in one place for easy access and use, but I know that information of CARES Act and your institutions does not stop at websites that end in .GOV. The following sites are likely ones that you have always frequented but I’ve tried to provide the links to their direct COVID-19 resource centers:

– National Association of College and University Business Officers (NACUBO) – Navigating COVID-19

– American Institute of Certified Public Accountants (AICPA) – Coronavirus (COVID-19) Resource Center

– National Association of Independent Colleges and Universities (NAICU) – Coronavirus Disease (COVID-19) Resources

– National Association of Student Financial Aid Administrators (NASFAA) – Coronavirus (COVID-19) Web Center

– Association of College & University Auditors (ACUA) – Coronavirus (COVID-19) Guidance and Resources

– Council on Governmental Relations (COGR), an association of research universities and affiliated medical centers and independent research institutions – Institutional and Agency Responses to COVID-19 and Additional Resources

– National Association of State Auditors, Comptrollers and Treasurers (NASACT) – COVID-19 Resources for States

For less regulatory information and more thought provoking articles, the following are great resources:

– EDUCASE – a nonprofit association and the largest community of technology, academic, industry, and campus leaders advancing higher education through the use of IT – HERE
– The Chronicle of Higher Education – the nation’s largest newsroom dedicated to covering colleges and universities – HERE
– Inside Higher Ed – the go-to online source for higher education news, thought leadership, careers and resources – HERE

The information about Covid-19 and its impact on institutions, both currently and in the future, is endless; to keep up with it all, nearly impossible. The goal, however, with you in your institution and me in this article is to stay as well informed and organized as possible. Miguel de Cervantes wrote that “To be prepared is half the victory.” Having the right information at hand and the willingness to learn and adapt when necessary, will mean the continued success of a higher education institution.

In addition to having the right information on hand, communication and teamwork are key. Contact your auditor for help or O’Connor & Drew, P.C. with any issues or questions related to COVID-19 and your institution.

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