$2 Trillion Stimulus Bill Includes Investments in K-12 Education

President Trump signed the $2 trillion COVID-19 stimulus package into law on Friday, March 27. We are still analyzing the 880-page bill but have compiled some highlights that may be of interest to you. 

In addition to providing targeted funding to businesses and governmental programs, the package provides direct funding to States and some local governments. 

According to analysis done by the nonpartisan Legislative Fiscal Bureau, Wisconsin will receive approximately $2.2 billion from the Coronavirus Relief Fund created by the Act. About $1.8 billion would go to the state government while the remaining funds would go to the City of Milwaukee, Milwaukee County and Dane County. 

Broadband and Distance Learning

Rural Utilities Service--Distance Learning, Telemedicine and Broadband Program: Provides $25 million for telemedicine and distance learning services in rural areas. 

Reconnect Pilot: Provides $100 million for grants for the costs of construction, improvement, or acquisition of facilities and equipment needed to provide broadband service in eligible rural areas.

Public Broadcasting: Provides $75 million to the Corporation for Public Broadcasting to provide stabilization grants to public telecommunications entities to maintain programming and services and preserve small and rural stations. 

Institute for Museum and Library Services: Provides $50 million to the Institute of Museum and Library Services for grants to States, territories and tribes to expand digital network access, purchase internet accessible devices, and provide technical support services.

Federal Communications Commission Telehealth: Provides $200 million to the FCC to respond to COVID-19. This includes supporting health care providers by providing telecommunications services, information services, and devices necessary to enable the provision of telehealth services. 

General Education 

Education Stabilization Fund: Provides $30.7 billion to the Education Stabilization Fund. This includes:

•  Elementary and Secondary Education: $13.5 billion in formula funding directly to states, to help schools respond to coronavirus and related school closures, meet the immediate needs of students and teachers, improve the use of education technology, purchase educational technology (including hardware, software, and connectivity), support distance education,and make up for lost learning time. It is estimated that Wisconsin will receive about $174 million from this funding source.

• State Flexibility Funding: $3 billion in flexible formula funding to be allocated by states based on the needs of their elementary and secondary schools and their institutions of higher education. It is estimated that Wisconsin will receive about $46 million ffrom this funding source.

National Emergency Educational Waivers. Provide the Secretary of Education with waiver authority to provide waivers (upon the request of a State educational agency or Indian tribe) from the Elementary and Secondary Education Act, except civil rights laws, that are necessary and appropriate due to the COVID-19 declaration of disaster. Requires the Secretary to create  an expedited application process to request a waiver. Waivers will only be valid during the 2019-20 school year. 

Report on IDEA Waivers: Within 30 days of the Act being signed into law, the Secretary of Education is required to the relevant Congressional committees with recommendations on any additional waivers under the Individuals with Disabilities Education Act (20 U.S.C. 1401 et seq.), the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.), the Elementary and Secondary Education Act of 1965, and the Carl D. Perkins Career and Technical Education Act of 2006 (20 3 U.S.C. 2301 et seq.) the Secretary believes are necessary to be enacted into law to provide limited flexibility to States and local educational agencies to meet the needs of students during the COVID-19 emergency. 

Service Obligation to Teachers. For teachers who could not finish their year of teaching service as a result of COVID-19, their partial year of service shall be counted as a full year of service toward TEACH grant obligations or Teacher Loan Forgiveness. Waives a requirement that teachers must serve consecutive years of teaching service for Teacher Loan Forgiveness eligibility, if a teacher’s service is not consecutive as a result of COVID-19.

Higher Education and Student Loans 

Temporary Relief for Federal Student Loan Borrowers: Requires the Secretary to defer student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans.

Use of Supplemental Educational Opportunity Grants for Emergency Aid. Allows higher education institutions to award additional SEOG funds to assist undergraduate or graduate students with unexpected expenses and unmet financial need as the result of COVID-19. 

Federal work-study payments. Allows higher education institutions to issue work-study payments to students who are unable to work due to work-place closures as a lump sum or in payments similar to paychecks.

Adjustments of Subsidized Loan Limits. For students who dropped out of school as a result of COVID -19 excludes the term from counting toward lifetime subsidized loan eligibility. 

Exclusion from Federal Pell Grant Duration Limit. For students who dropped out of school as a result of COVID -19 excludes the term from counting toward lifetime Pell eligibility.

Institutional Refund and Federal Student Loan Flexibility. For students who dropped out of school as a result of COVID -19, the student is not required to return Pell grants or federal student loans to the Secretary. Waives the requirement that institutions calculate the amount of grant or loan assistance that the institution must return to the Secretary in the case of students who dropped out of school as a result of COVID-19

Exclusion for certain employer payments of student loans: Allows employers to provide a student loan repayment benefit to employees on a tax-free basis. Under the provision, an employer may contribute up to $5,250 annually toward an employee’s student loans, and such payment would be excluded from the employee’s income. The $5,250 cap applies to both the new student loan repayment benefit as well as other educational assistance (e.g., tuition, fees, books) provided by the employer under current law. The provision applies to any student loan payments made by an employer on behalf of an employee after date of enactment and before January 1, 2021.

Economic Relief 

Recovery Rebates for Americans: Provides a one-time payment of $1,200 to individuals with incomes below $75,000 or a one-time payment of  $2,400 for joint filers with incomes below $150,000. Payments are increased by $500 per child. The bill requires the one-time payments to be made as soon as possible. 

Treasury Loans to Businesses, States and Local Government: Provides $500 billion to the Treasury Secretary for loans, loan guarantees, direct lending or investments in airlines, businesses and nonprofits with between 500 and 10,000 employees, states and municipalities who have incurred losses due to COVID-19. Businesses and non-profits would need to use the funds to maintain 90% of their employees at full compensation and benefits through September 30, 2020. The Secretary’s ability to make loans under this program ends on December 31, 2020. The Secretary is required to publish guidance within 10 days of enactment (April 6). The funding pool breaks down as follows:

• $454 billion for loans and investments in businesses, states and municipalities 
• $25 billion for airlines
• $4 billion for air cargo carriers
• $17 billion for businesses critical to maintaining national security 

Relief Payments to States, Tribal Governments and Local Units of Government: Provides $150 billion in direct payments to states, tribal governments and local units of government with. To qualify, local governments must have populations of more than 500,000 people. Payments are required to be used to cover expenditures related to COVID-19 that occur between March 1, 2020 and December 30, 2020. Expenditures must not have been accounted for in the state or local government’s most recent budget. The bill requires the Treasury Secretary  to make these payments within 30 days of enactment. 

Loans for Small Businesses, Non-profits, Contractors and Self-Employed Individuals. Allows nonprofits and other businesses with less than 500 employees to get loans from the Small Business Administration if they were adversely impacted by COVID-19. Loans can be used to cover payroll costs, health care benefits, mortgage or rent payments, utilities or interest on debt. Borrowers will be eligible for loan forgiveness if they maintain employees and their salaries. The eligibility period runs from February 15, 2020 to June 30, 2020. Maximum loan amounts will be determined using the organization's average monthly payroll amounts over a one year period. The bill appropriates $349 billion for this loan program. 

Employee retention credit for employers subject to closure due to COVID-19. Provides a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose (1) operations were fully or partially suspended, due to a COVID-19-related shutdown order, or (2) gross receipts declined by more than 50 percent when compared to the same quarter in the prior year.

Small Business Administration Disaster Loans: Provides $562 million to the Disaster Loan Program. 

Unemployment Insurance 

Unemployment Benefits for Individuals Typically Not Covered: Extends eligibility for unemployment benefits to individuals who are typically not covered, including those who are self-employed, or who have exhausted their rights to regular unemployment if they are directly impacted by COVID-19. Individuals in this category would be eligible for benefits from January 27, 2020 and December 31, 2020. The unemployment amount will be based on the compensation amount for the state the individual was employed as well as the Federal Pandemic Compensation amount of $600. 

Increased Unemployment Compensation and Benefits: Requires States to provide their regular weekly unemployment amount plus a payment of  $600 per week. The enhanced funding would end on July 31, 2020. The enhanced compensation will not impact an individual’s ability to apply for Medicaid.  The bill also provides an additional 13 weeks of unemployment benefits through December 31, 2020. 

Voting 

Election Security Grants: Provides an additional  $400 million to the Election Security Grant program for the 2020 federal election cycle. The bill requires the Election Assistance Commission to make payments to states within 30 days after enactment, which is approximately April 26.