How Colleges Spent Extra Covid-Relief Money on Their Students

During the height of the pandemic, many students struggled to navigate barriers — like emotional stress, health concerns, and financial troubles — that made it difficult to stay enrolled in college.

How colleges spent billions in federal relief.

Through the Higher Education Emergency Relief Fund, or Heerf, the federal government made $30 billion in pandemic-relief aid available to colleges specifically to distribute to their students. Heerf also gave colleges a separate bucket of money they could choose to spend on other purposes, like recovering lost revenue. That bucket is referred to as “institutional” funds or spending. Many colleges chose to direct some of those institutional funds toward students in crisis as well. A Chronicle analysis of the forms colleges filed to document their Heerf spending reveals how colleges spent their institutional money on students, and to what degree.

In 2021, for example, Heerf money for public and private nonprofit colleges provided more than $16 billion in student-directed funds. That year, the colleges allocated nearly $1.7 billion of their institutional funds to student aid in the form of emergency grants and to clear the outstanding balances that students owed them.

The March 2021 legislation that produced the third round of Heerf money paved the way for colleges to use federal relief aid to clear balances from student accounts. Colleges could award emergency grants to students and then — with the students’ permission — use the money to erase their balances. Or the institutions could wipe away student debt and then reimburse themselves with Heerf money. Colleges overwhelmingly chose the latter.

In 2020 and 2021, colleges spent $4.9 billion in institutional funds on student aid. Nearly two-thirds, or more than $3 billion, of that money went to clearing students’ outstanding balances owed to their institutions (but not money owed on private or federal loans). That money — settling outstanding balances — was the second-largest category of institutional money after lost revenue, as we noted in our earlier analysis. Emergency grant aid was the fourth-largest category of institutional spending, at $1.8 billion.

Our analysis shows that nearly every type of college spent at least 20 percent of its institutional funds on emergency aid for students or clearing students’ balances.

The amount of institutional money the 3,031 colleges in our analysis spent on emergency grants varied widely. Twenty-six colleges allocated more than $10 million each of their institutional funds for emergency financial aid, while nearly 1,300 allocated no institutional funds at all. The average expenditure for the 1,741 institutions that gave any funds in this category was just over $1 million.

For student aid in the form of satisfying student accounts, or student reimbursement, the top 47 colleges each gave more than $10 million, while 965 didn’t give any in this category. The average amount for the 2,066 colleges that gave in this category was just over $1.5 million.

Methodology

Except where indicated, data is for the institutional portion of Heerf funds allocated to colleges for 2020 and 2021. Only degree-granting public and private nonprofit institutions are included in this analysis. Institutional-portion funds include a(2), a(3), and a(4) funds, which are allocated to colleges only for specific criteria. A(2) funds, for example, are provided to historically Black colleges, minority-serving institutions, and tribal colleges. Groupings are based on 2021 Carnegie Classifications of Institutions of Higher Education’s basic categories. “Other” includes associate/baccalaureate colleges, special-focus four-year colleges, special-focus two-year colleges, tribal colleges, and unclassified institutions.