State Approaches to Federal Stimulus Funding for Higher Education
By Dillon McNamara
In the wake of the COVID-19 pandemic, the federal government provided significant funding for states and institutions of higher education. This was the first time the federal government distributed stimulus funding for higher education since the 2009 American Reinvestment and Recovery Act, passed during the Great Recession. Federal stimulus funding for the pandemic came through three major pieces of legislation:
● Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed in March 2020.
● Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act, passed in December 2020.
● American Rescue Plan (ARP), passed in January 2021.
Relief funding was distributed in different ways. Some funding, such as from the Higher Education Emergency Relief Fund (HEERF), included in all three bills, was distributed directly to Title IV-eligible postsecondary institutions. The ARP included the Coronavirus State and Local Fiscal Recovery Fund, which allocated funding to states, counties, and local governments to cover lost public sector revenue and support industries and businesses negatively impacted by the pandemic. The CARES Act and CRRSA also included the Governor’s Emergency Education Relief (GEER) Fund. The purpose of this funding was to allow each state’s governor to “provide subgrants to local educational agencies and institutions of higher education … to support their ability to continue providing educational services to their students and to support the ‘on-going functionality’ of these entities.”[1] States could choose how much to allocate in funding for K-12 or higher education purposes — some states issued all their GEER funding to elementary and secondary education, and others issued all funding to postsecondary subgrantees.
This structure of GEER funding afforded states significant flexibility and control over how to distribute stimulus funds for education. The CARES Act and CRRSA distributed $7.05 billion in GEER funding, and a total of $1.58 billion across 40 states went toward higher education.[2] In the states that chose to use GEER funding for higher education purposes, some states provided the funding to institutions of higher education through a student enrollment or outcomes-based formula, and others used the funding to reduce or eliminate cuts in state aid to public colleges and universities that may have been necessary due to reduced state revenues in the spring and summer of 2020.
However, some states chose to use GEER to launch or pilot new programs and initiatives for higher education, such as new statewide student scholarships and new grant opportunities for postsecondary institutions. Several examples of how states approached using this federal stimulus funding to support higher education priorities provide insight into how state higher education leaders were thinking through how best to allocate this new and unique source of funding during the early days of the pandemic. These examples also provide valuable lessons to other state leaders and state higher education staff on how best to leverage non-state funding to launch new postsecondary pilots or programs.
Michigan: Futures for Frontliners
In early 2020, Michigan was focused on how to reach their state attainment goal, and they had recently launched a new 60x30 office within their Department of Labor and Economic Opportunity. In March 2020, a bill was passed in the Michigan State Legislature to create Michigan Reconnect, a scholarship program that provided free tuition and fees for adults returning to institutions of higher education to complete their degree. Unfortunately, the onset of the COVID-19 pandemic had created a negative outlook on future revenues, and the state initially decided to not appropriate any funding for the program.
However, GEER funding received in the following months allowed Michigan to recommit to its focus on supporting completion and attainment efforts. That summer, the state announced that it was using $18 million in GEER funding to create a new Futures for Frontliners scholarship program. Futures for Frontliners offered last-dollar funding to make a postsecondary degree free for Michigan students who had worked in frontline industries in the spring and summer of 2020. These industries include health care, emergency services, grocery stores, and critical manufacturing. The first cohort of scholarship recipients received funding to start in January 2021, and they were eligible for up to four years of funding for their degree.
Demand for the program was strong, and the initial $24 million in stimulus funding helped support 85,000 students who had worked on the “frontlines” in the early months of the pandemic. The success of the Futures for Frontliners program helped build support for funding a new Michigan Reconnect program. Using data showing the demand for a tuition-free program, like Frontliners, Michigan state officials successfully petitioned the Legislature for $30 million in state funding to support an initial Reconnect cohort. This first Reconnect cohort received funding for the fall of 2021, and a second tranche of $55 million in funding was appropriated to support a new cohort for the 2022–23 academic year.
New Jersey: Grants to Support State Goals
Like Michigan, in early 2020, New Jersey was unable to appropriate funding for a new higher education initiative due to the COVID-19 pandemic. This initiative, the Hunger-Free Campus Grant Act, was intended to provide funding for public colleges and universities to combat food insecurity among students. In the spring of 2020, New Jersey’s state agency for higher education had convened a pandemic advisory group, consisting of college presidents from all sectors of higher education. Agency officials heard feedback that students at institutions of higher education were losing jobs and housing due to the pandemic, so state officials commissioned a student survey of the basic needs of students at New Jersey postsecondary institutions. The results from this survey highlighted the prevalence of homelessness and malnourishment among college students. Recognizing that these economic insecurities were being intensified by the pandemic, state officials decided to allocate $1 million in GEER funding to support the grant program. Institutions of higher education used awarded funds to establish food pantries, SNAP-eligible campus stores, and meal plan-sharing initiatives on their campuses. This initial round of funding helped show legislators and state officials the demand for the program and its positive outcomes for students. Because of this, the state expanded the program in 2022 using $1.5 million in state funding.
New Jersey also decided to use $28.5 million in GEER funding to create a new Opportunity Meets Innovation Challenge (OMIC) competitive grant program for institutions. This program was an idea originally recommended in the state’s JobsNJ economic plan that was released right before the pandemic. OMIC awarded flexible funds that would allow institutions to create new programs that were backed by the five pillars of New Jersey’s state plan for higher education: On-Ramps to College, Affordability, Student Success, Safe and Inclusive Learning Environments, and Research, Innovation, and Talent. Institutions used this funding in a variety of ways, such as creating or improving local dual enrollment programs, stocking or opening food pantries, building out new staff training on corequisite instruction models and student advising, and creating or expanding on-campus multicultural centers. The OMIC program allowed the state to make concrete progress on their higher education goals and gave postsecondary institutions flexible funding at a time during the pandemic when their budgets were tighter and they may not have been able to independently support and fund these new initiatives.
New Mexico: Digital Divide and the Workforce
In the first round of GEER funding, the New Mexico Higher Education Department was awarded nearly $4.01 million from the state to address broadband and internet connectivity challenges. Using this funding, the Department created a new “Spectrum of Education” competitive grant application. Any of the state’s public higher education institutions, including the state’s three public tribal universities, could apply. Additionally, postsecondary collaborators such as cross-technology groups, associations, or teacher preparation programs were encouraged to apply for funding. Grantees could use funding to address a host of “cradle to career” issues, such as training instructional providers, improving connectivity services, modernizing workforce programs, or building institutional capacity.
In response to this funding being made available, a single application was put forth by all 29 public postsecondary institutions. Addressing broadband and connectivity was a major focus of the application, as this issue was viewed as the biggest challenge for these institutions during the early pandemic period when most instruction was still remote. Once awarded, funding went to support new internet hotspots for students and centers for internet access, as well as construction of new satellite campuses for extension services.
Later in 2020, when the state was awarded additional GEER funding through the CRRSA, New Mexico decided to use $3 million to support building a new workforce-postsecondary partnership. The state used this funding, along with separate federal stimulus funding received by the New Mexico Department of Workforce Solutions, to support the operations of a new state workforce online hub, Ready.NM.gov. This site serves as a one-stop shop for job seekers and students ready to enter the workforce, providing a suite of essential resources, such as:
● Training & Education: Short- and long-term certificate programs at public New Mexico institutions of higher education are advertised on the site, as well as any available scholarships.
● Employment Opportunities: Employers can post their job listings on the site, and job seekers can view information and wage data on “in-demand” industries.
● Business Support: Information on starting an apprenticeship program with the support of a local college or university, as well as information on hiring incentives offered by the state, is available for employers.
Lessons for State Higher Education Leaders
These three state examples provide lessons for state leaders and state higher education staff on how best to leverage non-state funding to launch new postsecondary pilots or programs. Often, states do not have much time to deliberate on how to use stimulus funding, as funding is usually required to be distributed and expended within a short window. Also, it is difficult for states to predict when future opportunities to take advantage of new sources of federal funding will become available. Because of this, it is significant that state higher education leaders learn how to effectively distribute non-state and federal funding from previous programs and initiatives and that they are well prepared for new non-state and federal funding opportunities. When exploring future uses of non-state funding, states should:
1. Focus funding on immediate needs, but also connect it back to state goals. Michigan tied their Futures for Frontliners program to the state’s attainment goal, while also focusing on their response to the pandemic, by making the initial eligibility only for frontline employees during the spring and summer of 2020. Similarly, New Jersey connected their grant funding to goals from their state plan for higher education and to food insecurity, which was heightened during the pandemic.
2. Work with stakeholders, such as institutional leaders and/or state employers, to get buy-in for funding a new program.
New Mexico surveyed institutions about what their immediate needs were prior to creating the Spectrum of Education grant program. Additionally, New Jersey had a pandemic advisory group of college presidents that they worked with to pitch their GEER funding ideas and gain buy-in and trust from their stakeholders for the OMIC program.
3. Think forward — Even if funding is small, can a pilot or “first cohort” build support for a larger initiative?
Michigan’s Futures for Frontliners program was narrower in focus and eligibility than the Reconnect program, but outcomes and demand data from the initiative built up support for state funding for the 2021 and 2022 Reconnect cohorts.
4. Use data and local context to help the funding fit state and local communities’ needs.
Data and local context matters, and all three states successfully used them to address their communities’ needs. New Mexico’s tribal colleges and rural institutions made broadband a necessary pandemic funding item for postsecondary institutions. New Jersey used survey data on student economic insecurities to show the need for material hardships-focused funding such as the Hunger-Free Campus Grant program, and similarly, Michigan used data to recommit to the Reconnect program.
These four major takeaways from Michigan, New Jersey, and New Mexico’s efforts to pilot new programs and initiatives can help state higher education leaders determine innovative ways to use non-state funding to launch new postsecondary programs and initiatives.
[1] Office of Elementary and Secondary Education, U.S. Department of Education. (2020). Frequently asked questions about the Governor’s Emergency Education Relief Fund (GEER Fund). https://oese.ed.gov/files/2020/05/FAQs-GEER-Fund.pdf
[2] McNamara, D., & Laderman, S. (2022). Issue brief: Sources and uses of COVID-19 federal stimulus funding to support higher education(SHEF 2021 Issue Brief). State Higher Education Executive Officers Association.
