CAA: Additional Provisions of the Education Stabilization Fund
by Heather Ambrose and Donna Lemons, CPA
Parents in the midst of the COVID-19 pandemic have certainly seen a very different educational model this year, with many becoming teachers themselves. On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021 into law that will provide almost $82 billion additional dollars to the Education Stabilization Fund. The funding is similar to the CARES Act, broken down into several smaller funds with specific focuses.
About $4 billion is allocated to the Governors Emergency Education Relief Fund. These funds will provide each state with emergency support to continue education services to students and the ongoing functionality of the local education agencies (LEAs) that have been most significantly impacted by Covid-19. This fund also includes $2.75 billion set aside for private schools.
The Elementary & Secondary Emergency Relief Fund will provide approximately $54 billion for K-12 public schools, including charter schools. Funding will also be provided to each state educational agency.
The Higher Education Emergency Relief Fund will receive an additional $23 billion, which includes funds set aside for Historically Black Colleges & Universities, minority serving and development institutions and for those with the greatest unmet needs.
LEAs in any of the funds above should use these funds to:
• Coordinate with agencies in the prevention of, preparation for and response to Covid-19;
• Attain resources to address individual needs of students;
• Provide training and professional development to faculty and staff;
• Create and implement long-term closure plans – including meals, technology & connectivity, compliance with IDEA, etc.;
• Provide mental health services and support;
• Address learning loss and create plans to recover mastery; and
• Provide school repairs and improvements related to reducing the risk of Covid-19 transmission.
Also included in this bill is approximately $800 million in relief to US territories and programs operated or funded by the Bureau of Indian Education (elementary, secondary & Tribal Colleges & Universities).
Of note to those with student loans: this new legislation does not extend the forbearance on student loan payments that was created in the CARES Act beyond the current expiration date of January 31, 2021. While President-elect Biden could extend the forbearance after his inauguration, loan payments are now scheduled to resume in February. The good news is that borrowers who choose to consolidate their Federal student loans awarded prior to October 1, 2017 may select from any student loan servicer to service their new consolidated student loans.
If you have any questions about how these provisions may impact your individual tax situation, please do not hesitate to reach out to your trusted BRC advisor.
Donna L. Lemons Senior Accountant, CPA
NC License #43849