By Jeff Selingo

Higher education leaders are evaluating options for using federal relief funds to help with the disruption caused by COVID-19 to colleges and universities. They also consider long-term investments to reduce college costs.
College officials are still debating how to spend the money they have been given. The CARES Act required that universities and colleges give half of their allotment to students. Although there were restrictions on how the funds could be spent, most institutions still had millions of dollars to spend on what?
As they mulled over their options, something unexpected happened–administrators stopped looking at long-existing structures and policies as sacrosanct. Universities set up digital access for students, granted grants to students in need, and expanded summer programs to better prepare students for college.
“Because of pandemic, I believe we all lowered resistance to new ideas,” stated Sue Ellspermann, President of Ivy Tech Community College of Indiana. It is the largest single-accredited statewide community college system in the country.
What Federal Funding is Available?
Let’s look at the COVID-19 relief fund for higher education that was created since the outbreak of the pandemic to better understand how universities and colleges are using federal dollars.
March 2020’s Coronavirus Aid, Recovery and Economic Security Act (CARES Act) allocated $30.7 billion to education and specifically created the Higher Education Emergency Relief Fund.
The Coronavirus Response and Relief Supplemental Appropriations Act, which was signed in December 2020, authorized a second HEERF to support education with $81.8 billion.
March 2021 saw the approval of the American Rescue Plan, a third stimulus bill with $40 billion for higher education.
With daily signs of momentum in the effort to vaccinate U.S. adults, college leaders are beginning to plan for a new normal on their campuses after the pandemic, some are using the relief money to invest in solutions to a problem that existed long before COVID-19–affordability.
This issue is at a critical point, especially in the United States where many students find that the cost of earning a credential is a barrier for them to get a job, a raise, or a promotion. Higher education institutions are under increasing pressure to lower student costs. Many universities and colleges are now looking for ways to increase retention and graduation rates.
Despite the fact that the emergency assistance was granted to two higher education institutions, administrators are still unsure how to best use the money. They fear that students will not be able to save money and that any new or innovative ideas will be rejected.
The American Rescue Plan is the latest round of relief funds. It’s actually much easier. Jon Fansmith, Director for Government Relations at American Council on Education, stated that the government has finally realized that there are better ways to help students than replacing lost income. He said that there is now more flexibility to use the money to address all aspects of the cost of attendance.
How Ivy Tech Put the Funds to Work
Many colleges and universities used some CARES Act funds for students’ internet access and devices. This solved an immediate problem. Ivy Tech went further with its plan to make college more affordable by investing in it. The system hired 25 new staff members two years ago to help with digital course design and offered professional development courses in online instruction. The goal is to make every course at Ivy Tech’s 40 locations online, with the tuition and course materials included.
Students often feel anxious about the cost of textbooks, which can cause them financial stress. According to uAspire, more than half of college’s cost is covered by indirect expenses. Colleges fail to provide students with essential information about these costs. These unexpected costs can cause financial hardship, especially for students from low-income communities and communities of color, who face affordability gaps nationwide.