College Students Got Billions in Emergency Pandemic Aid. What Happens When the Funding Dries Up?

For a student at Iowa State University, an emergency grant meant that he didn’t have to choose between buying food and buying medication for his diabetes after losing his job last year.

At Southern New Hampshire University, one of these grants allowed a student to skip extra waitressing shifts and spend a weekend catching up on schoolwork.

For millions more college students around the country, billions of dollars that have been poured into emergency financial aid since last spring have paid for rent, groceries and child care. It marks an unprecedented investment in assisting college students with their basic needs and has helped students stay enrolled, officials say, even as most colleges are still learning the most effective way to give out so much money.

The federal government has set aside more than $31 billion for emergency grants to help students deal with the financial fallout of the pandemic and recession. By comparison, that’s more than the government spends in a year on Pell grants for low-income students, the largest form of federal financial aid aside from student loans.

“It’s really been a lifeline for our students,” Roberta Johnson, director of financial aid at Iowa State University, said of the federal funding.

The money has come in three batches, from the CARES Act last spring, the pandemic relief bill passed in December, and finally, from the American Rescue Plan, which earmarked more than $18 billion for emergency grants. Many colleges are finishing up the last of their second round of grant funding. The last, and largest, batch of money started hitting colleges' bank accounts earlier this month, but it doesn’t need to be spent until the end of the spring semester next year.

Here's how colleges are handling the windfall:

How colleges are distributing emergency grants

Colleges have found that emergency grants, which are traditionally small, one-time financial aid awards, help students pay for car repairs, food and other living expenses that can disrupt their academic progress. A grant as small as $250 can help. It’s been a growing area of higher education assistance for several years now.

But it was still a relatively small practice — a hodgepodge of limited money largely driven by donations to individual colleges. That changed last spring, when thousands of colleges had to quickly scale up to distribute an amount that has dwarfed their typical emergency aid budgets.

Administrators at Iowa State University are looking for lessons from their previous experiences with emergency aid to decide how they'll divvy up nearly $29 million in grants from the American Rescue Plan. About 7,200 students received grants from each of the previous two relief packages.

In the first round of CARES Act money, the Iowa State required students to submit applications. But that created a lot of work, both for the staffers who had to sort through thousands of pages of paperwork, and for the students who had to jump through hoops, even if they were short ones, to get money they needed.

Yet when the university shifted to award the second batch of money via automatic grants based off financial need according to the FAFSA, some of those students ended up giving the money back, saying they didn't need it and there were others who did.

That’s been a common struggle for colleges, who are weighing the need to get money to students quickly, in a way that doesn’t create unnecessary bureaucratic hurdles, while also ensuring that the dollars are going to those who need them the most.

“We don’t have a good answer for that one yet, but we’re hoping to figure that out in the next round,” Johnson says.

Southern New Hampshire University has outsourced much of that process to a third party called Edquity, a technology company that created an app to help colleges manage quick emergency grant decision-making, says Tim Lehmann, the university's vice president of student financial services.

While the university handled awarding the money from the CARES Act last year, it received a lot more federal money in the second round — a jump to $24 million from $2.7 million, the result of a change in the formula that captured a college’s online enrollment in calculating its share of the money. SNHU has about 165,000 students enrolled in its online programs.

With such a large amount of money, Lehmann says, Edquity had the scale and ability to understand what would make an equitable distribution and how to quickly determine exceptional need, which the Education Department has told colleges to prioritize.

The university has spent about a fifth of its second round of money and is waiting to learn from that before firming up plans for the $51 million it will spend on emergency grants from the final round. Lehman expects they'll cast a wider net with that pot of money, trying to reach students they couldn’t help in previous rounds, including international students, undocumented students, DACA recipients and even students who have graduated but were enrolled during the upheaval of 2020. (New rules from the Education Department allow grants for those groups for the first time.)

“There is a lot of need out there, and just finding ways to disperse it to the right person at the right time has been a learning experience,” Lehmann says.

At Goucher College, a private school in Maryland with about 1,300 undergraduate students, the first two rounds of money were spent immediately, says Jonathan Lindsay, vice president for enrollment management. But with the upcoming third round, Lindsay expects to set up an awards system so that some of the money is available for students facing financial problems in the fall and some is still available for those who face issues in the spring.

Awarding the emergency money has been a learning experience on his campus, too. It made him realize that the campus’s process for accessing emergency aid before the pandemic wasn’t clearly defined for students or well-managed, in the sense that decisions and money dispersals weren’t always made quickly.

“If you’re having an emergency, typically it’s an emergency that needs help now, not two weeks down the line” he says.

Other ways colleges helped address emergency needs

The nearly $32 billion of emergency funding only counts money that the government required colleges to spend on student grants. Some colleges, like San Joaquin Delta College, spent much more, pulling from the other stimulus monies the government gave to colleges.

In the second round of funding, for example, the two-year college in Stockton, California was required to award $3.2 million in grants. But after the college handed out money to all the students it determined had significant need, the total topped $6.2 million, says Tina Lent, the director of financial aid. She hopes to award larger grants with money from the American Rescue Plan — the average so far has been about $1,500 — since the college has so much more money than the first two go-arounds.

Many colleges also boosted the federal emergency grants with money raised from private donors, particularly to help students who weren’t eligible for the federal money.

Central Washington University spent $80,000 from its foundation to reach those students. It also helped line up laptops, WiFi hotspots, rental waivers and free campus dining bucks to meet student needs, says Greg Heinselman, dean of student success. The university so far has spent $7.7 million from the federal government on grants to about 5,600 students, money that has been life-changing for some students.

"They didn't know where their next meal was going to come from, or where rent was going to come from, and especially how they were going to be able to continue as students," he says.

How students are spending emergency financial aid

Melissa Sullo, 36, is one of the students who used the Edquity app to get an emergency grant from Southern New Hampshire University. While there were some technical hiccups to get her student ID number accepted, once she was in and answered a few questions, $500 arrived in her account within a couple days.

She's a recently divorced mom of five kids under the age of 10, and she spends $500 a week to pay for childcare while she's at work. So that grant means she can skip a weekend of waitressing shifts — her second job — and catch up on her school work. She returned as a student last year to finish a bachelor’s degree in psychology.

"It's a lot on my plate, and being approved for any funding was so helpful," she says. "I got a little emotional, honestly."

Initially, students needed emergency grants to help with immediate expenses spurred by the pandemic: moving or traveling home when campuses shuttered, wage replacement for lost jobs, assistance with buying equipment needed to learn from home.

But as the months wore on, more persistent financial challenges have been the primary focus. Necessities like rent, food and transportation have been the most frequently listed needs from students, according to officials on a variety campuses. Child care and medical bills were common as well.

For Schiieyenne Parker-Bowser, the emergency financial aid came at a crucial crossroad. She just graduated with her bachelor’s degree from Trinity Washington University, though the achievement hasn’t quite set in yet.

Six months ago, when the 34-year-old was about to give birth to her son and COVID-19 spread through her home, infecting her, her mother and three her of kids, Parker-Bowser thought she’d have to take the spring semester off. She was about to go on an unpaid maternity leave from her job as a concierge in an office building in Arlington, Virginia. She was supposed to be getting help from the government through the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families, but there was a delay with her paperwork.

That’s when she asked Trinity for help. Overall, she received three different grants in the past year, one for $1,500 last spring, and then one for $1,000 and the final one for $2,000 this year. They paid for school expenses and rent, mainly.

“If I didn’t go back, I honestly probably wouldn’t have gone back in the fall. I might have given up," she says. "I’m glad I didn’t.”

Trinity serves a distinctly low-income community; the median income of full-time undergraduate students is less than $25,000. Many students work to help support their parents or grandparents, or they have children of their own. Students’ needs sometimes far outstrip the college’s ability to help, and the pandemic piled on top of what was already high need, says Trinity President Pat McGuire

“These grants, for our students, they are like Manna from heaven, really,” she says.

What happens with funding for emergency grants in the future?

It’s too soon to say with any firm data whether this unparalleled investment in emergency grants will, say, raise graduation rates or help students pass more of their courses.

Typically, the most effective emergency grant programs are built on strong data from years of tracking students to figure out where and when students are struggling, says Bridget Burns, executive director of the University Innovation Alliance, which recently completed a three-year study on emergency grants at 11 large public universities. And if a college didn’t already have the data in place before the pandemic, that’s not something they would have had time to build this year.

But there are promising signs that the money helped stave off some of the worst outcomes. In a December survey from the Hope Center for College, Community and Justice at Temple University, 78% of students who received emergency aid said it helped them stay in school. At four-year colleges, it was 61%.

While the pandemic and its recession has pushed many more colleges students into unstable financial territory, the reality is that these grants are often filling basic needs that existed before the pandemic, and ones that will remain in the future.

“My concern now is, what are we going to do when it’s over?” McGuire said of the emergency money. “Because the needs aren’t going away.” Her university already raises private money and puts some institutional money toward emergency grants, but nowhere close to the nearly $5 million it will have spent in federal money since the pandemic started.

The Hope Center has suggested creating a permanent federal fund for emergency grants for students. And Sen. Tina Smith, a Democrat from Minnesota, introduced legislation last year to do that.

In a perfect world, experts say, existing financial aid would be enough to keep students from falling into emergency financial situations. One step toward that would be doubling the amount of the federal Pell grant, a proposal President Joe Biden has said he supports and something that has broad appeal across higher education groups.

“We can’t separate hunger and housing security from your ability to write a paper and learn a new concept,” Burns says. “They are inherently connected, so we cannot think that tuition is sufficient.”

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