Policy Brief: Emergency Funding for COVID-19 and California’s Higher Education Systems

Before the COVID-19 pandemic hit, things were going well for California’s public institutions of higher education. Across all three systems, levels of government funding have been high and increasing, student outcomes have been improving, and programs for students in need have been strong. Then in March 2020, COVID-19 sent shocking changes through the means and working methods of these educational institutions.

Crisis strikes

Almost overnight, the campus was closed and students, faculty, and staff were sent home. Student and family incomes collapsed. The University of California (UC), California State University (CSU), and California Community College (CCC) systems faced a financial catastrophe akin to the Great Recession in 2008, while suffering from a global virus outbreak. Because of the complexity, differences in size, and unique campuses within each system, there is no comprehensive solution that can fix the financial and public health crisis affecting institutions.

California public institutions have faced potentially catastrophic financial dynamics: sharp declines in revenue from tuition, housing, dining, and ancillary services such as parking and libraries, as well as rising costs associated with COVID-19 on-campus safety measures and with moving coursework and student services online. To make matters worse, government funding also declined for the 2020-2021 fiscal year.

The emergency federal relief was significant and timely

The federal government quickly passed a series of emergency relief bills—known together as the Higher Education Emergency Relief Fund, $10.1 billion of which was earmarked for California. This money was to be divided equally between student aid and institutional shortfalls—originally only for the required transition to online courses, but later expanded to cover other related costs.

Student help. California students have received more than $5 billion in emergency aid. The first round of funding had restrictive student disbursement rules. Based on full-time enrolled students on campus rather than total staff and number of Pell Grant recipients (as a measure of student need), this round favored UCs and CSUs over CCCs. Although later rounds sought to address funding inequality, community college students received less per student aid than their college counterparts during the pandemic.

Moreover, although the US Department of Education and California’s public systems provided guidance, each campus faced different challenges in getting money to students in need. Since the students’ information on file was based on their families’ financial situation from previous tax years, and students moved away from campus, the disbursement was a trade-off between speed and accuracy. And because the pandemic has altered student and family income, ensuring accurate disbursement has also been a challenge.

Especially during the first round of federal aid, the neediest students may have gone without extra help, especially at community colleges. Community college students often study part-time while also working, and Pell Grant uptake is low; Moreover, these students often depend on state aid, not federal aid, so many of them did not have their federal aid applications on file. It was difficult to reach those without fixed home addresses and/or internet connections.

institutional spending. The University of California, CSU, and community colleges have received about $4.5 billion in institutional relief funding. In the first round, spending on campus aid has been limited to moving courses online temporarily, a big transition that needs to happen quickly. During subsequent rounds, the federal government eased restrictions to allow the aid to go to additional institutional expenses related to the pandemic. It is worth noting that most institutions used some of this funding to support the neediest students along with the part allocated to students. Although every organization has made spending information public, about 13 percent of expenditures fall into the “Other” category, making understanding their usage difficult.

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