How Colleges Can Maximize the Benefits of the New Federal Stimulus Package


How Colleges Can Maximize the Benefits of the New Federal Stimulus Package

Passage of the $900 billion pandemic relief bill in late December offered at least a glimmer of hope for struggling colleges. This was a substantially better package for higher education than the CARES Act, offering more money and greater spending flexibility.

EAB’s Kaitlyn Maloney and Jackson Nell discuss implications of the new funding formula on different types of institutions and offer reasons why the exclusion of for-profit institutions and imposition of a “wealth tax” on schools with generous endowments will help divert a larger percentage of funds to institutions with the greatest need.

They urge university leaders to be open and transparent in how they plan to distribute increased financial aid to students. Finally, Kaitlyn and Jackson discuss why we might expect incremental improvement rather than transformational change under the Biden administration.

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On December 21, 2020, Congress finalized a new stimulus package and federal budget in the Consolidated Appropriations Act of 2021 to provide another round of relief to the US economy. While this latest relief package is far smaller and later than many of us would have hoped for, higher education leaders can expect some additional federal assistance to start 2021.

With so much at stake, education leaders want to know what to expect from the Federal Government over the next two years. To help leaders prepare for the Biden administration, EAB assessed the likeliness and impact of its potential higher education policy proposals below. Following this analysis, we also offered some advice for leaders to bear in mind across the coming weeks.

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