The pros and cons of BYU rejecting CARES funding

BYU was set to receive $32 million from the CARES Act but turned it down in May, opting instead to provide a COVID Relief Fund to students.

BYU stated it turned down the funds because of “the financial strain this pandemic has put on other institutions, some of which may not be able to open their doors to students again without government relief.” The university said it did not apply for CARES funds and that it felt it could support its students using its own funds.

The university as yet to announce when funds will be released, but applications were due on June 1.

While BYU has been both praised and criticized for the move, the decision to reject CARES funding was not as simple as it may have seemed, and the consequences — both positive and negative — of doing so may still affect students going forward.

BYU’s funds may be less generous

BYU’s choice to reject CARES funds came following public pressure for many universities with large endowments to not accept CARES fund.

Various Congress members and President Donald Trump called for wealthy universities like Harvard to not accept CARES Act money. Individuals on social media also targeted BYU due to its backing by The Church of Jesus Christ of Latter-day Saints, which received criticism for allegedly stockpiling $100 billion in charitable donations.

The agreement schools must sign to receive CARES funds, however, specifically mentions schools with large endowments.

“The Secretary urges Recipient to devote the maximum amount of funds possible to
emergency financial aid grants to students, including some or all of the funds earmarked for
Recipient’s Institutional Costs, especially if Recipient has significant endowment or other resources at its disposal,” reads the agreement.

Schools must pay no less than 50% of CARES funds to students as emergency financial aid grants, but some other wealthy universities like Cornell decided to use 100% of the funds for student relief grants.

BYU declined to report how much money it will be providing to students as part of its COVID Relief Fund. An FAQ about the funds is inconclusive about whether students will get the amount they applied for and whether everyone who applied will receive money. “BYU will have to weigh and evaluate all requests individually and in total before determining final amounts.”

CARES and BYU’s funds are almost identical in terms of what they cover, but BYU’s funds have one important stipulation — the funds are only for students who couldn’t cover their expenses through their own resources or family assistance. Some students questioned whether cutting into their personal or family’s emergency funds to cover expenses rendered them ineligible for BYU’s COVID relief funds.

“The university hopes students whose basic needs and increased expenses have been met through their own resources and the assistance of family members will choose to allow funds to be allocated to other students with more need,” reads an FAQ about whether students wil get the amount they apply for.

The FAQ also states that students may need to include the money as income on their taxes, something that is not required with CARES funds.

BYU’s fund does not include employees

BYU has not announced any emergency funds related to full-time or student employees who may have lost work due to COVID-19 disruptions.

The 50% of CARES funds eligible to defray institutions’ expenses can be used for lost revenues and payroll for full-time and student employees. It cannot be used to reimburse colleges for payments, though.

A BYU FAQ about working during the pandemic instructs supervisors to try to allow remote work and to find meaningful work for employees whose tasks cannot be performed during the pandemic, but states “employees should not be paid if they are not working, other than sick or vacation.”

The FAQ also instructs employees to use sick or vacation days if remote work isn’t feasible. Part-time student employees do not accrue sick or vacation leave, but full-time employees accrue days each biweekly pay period on an hour-per-hour basis. As of the end of May, a full-time employee would have earned only five days of sick leave and five to nine vacation days during 2020, although some employees may have more than that saved from previous years.

BYU’s funds include international and undocumented students

In order to receive CARES funds, students must be eligible for federal student aid programs. Although BYU may have a disproportionally large amount of students eligible given the number of married students on campus, CARES funds left international students and undocumented students, including those under the Deferred Action for Childhood Arrivals program, without any emergency financial assistance.

BYU’s funding is available to “all matriculated students enrolled in classes as of March 13, 2020.” This includes international students, undocumented students and DACA students.

Additionally, students who may need financial assistance but don’t qualify for federal student aid programs due to their parents’ income are also eligible.

In contrast to BYU, all eight institutions in the Utah System of Higher Education accepted CARES funds while also providing funds to students who were not eligible for CARES funds. This assistance was funded privately by community donors and ongoing fundraising efforts, according to a USHE press release.

BYU’s funds are also open to students only enrolled in all-online classes, whom the CARES Act left out.

Less paperwork and red tape for BYU

The Department of Education guidance regarding CARES funds was “confusing or vague,” according to Forbes. Some original guidelines were backtracked, others weren’t specific and some contradicted information from other federal departments. This left many institutions wondering what the funds could and could not be used for.

For example, Duke University’s primary reason for turning down CARES funding was “legal and regulatory” problems with accepting the funds, according to an article by its student paper.

“In reviewing what the funds would be used for and also what the requirements were from the government in terms of reporting and ambiguity, we determined that there were some fairly significant legal and regulatory issues that were unclear to us and could have had a significant impact,” vice president Michael Schoenfeld told the Duke Chronicle.  

Schools that did accept CARES money are required to report data about the disbursement of funds.

A memo from the Department of Education states that schools must publish how grants were distributed to students, the total amount given to students, the total number of students who received funds, how the amount of each grant was calculated and any instructions, any directions given to students and the estimated number of students eligible to receive funds.

Schools must also comply with Section 15011 of the CARES Act, which requires institutions receiving funds to report on a monthly basis until Sep. 30, 2021, about the spending of CARES funds and to submit a plan about how the funds will be used by June 25. The section also requires institutions to submit a report each calendar period containing the following:

• The total amount of CARES funds received
• A list of all projects or activities for which the funds were used for, including the name and a description of the project or activity and the estimated number of jobs created or retained by it
• Detailed information on any level of subcontracts or subgrants awarded by the university or its subcontractors or subgrantees

These reports are then required to be made public no more than 30 days after the end of each quarter on a userfriendly website to “foster greater accountability and transparency in the use of covered funds and the Coronavirus response” under the CARES Act.

Universities are also required to pay their employees “to the greatest extent practicable” to receive funds. The National Association of Student Financial Aid Administrators has determined this to mean institutions must be making a good faith effort to pay employees and be able to document it.