The new law is called the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSA). Thanks to our colleagues in CAPE, here’s what is known about the law, which was signed Dec. 27 in a whopping 5,500 pages of legalese.
The new COVID relief law does three things for K-12 private schools and their supporters:
- It authorizes emergency funding exclusively for private schools.
- It authorizes another round of Paycheck Protection Program (PPP) loans.
- It extends for one year a universal charitable deduction for non-itemizers.
Emergency funding for private schools comes in the form of a second round of GEER (Governors Emergency Education Relief) Fund (GEER II) which includes $2.75 billion in dedicated aid for private schools to be administered by a public agency. This program is called “Emergency Aid for Non-Public Schools (EANS).”
Wisconsin will get $77.4 million in EANS funds. But the law requires a state’s Governor to apply for the funds by Feb. 8. WCRIS has sent a letter to Gov. Evers requesting he apply.
A private school must choose between EANS or the new round of PPP. Private schools may not participate in both. Further, the new law does not include equitable services for private schools or students under its second round of funding for the Elementary and Secondary School Emergency Relief (ESSER) Fund. So there’s no help there for our schools.
Key Points about EANS Funds:
- The state education agency (SEA) will be the public agency to administer EANS.
- The SEA must “prioritize” assistance to private schools that “enroll low-income students and are most impacted by the qualifying emergency.”WCRIS is working with our state counterparts and CAPE staff to determine and influence how this vague language will be administered.
- The SEA must notify private schools about the program and schools must apply for relief. Once the USDE approves a governor’s “certification and agreement,” the USDE will award the state its EANS funds within one business day. SEAs then have 30 days to create an application for private schools to use and give them time to apply.WCRIS is already discussing this application form with DPI and providing input on how it can be written to be user friendly for private schools.
- EANS funds must be obligated within six months of an approved state application. Unobligated funds revert to the governor’s GEER fund which does not require private sector school assistance. We believe this creates an incentive for Gov. Evers to apply because the public sector will get any unused funds. Everyone wins.
- Private schools may apply EANS funds to 12 uses authorized in the law (see below).
- The law requires a public agency to maintain control of the funds in a fashion similar to the use of equitable services in existing federal programs. This suggests schools should not become recipients of federal financial assistance under EANS.
- The law allows EANS to be used for reimbursements of past expenses of private schools for the uses allowed in the law. That process may implicate a school’s becoming a recipient of federal financial assistance. Schools will want to be aware of this. Also note:
- A private school cannot be reimbursed with EANS funds for expenses it has already paid for with a PPP loan.
- The bill specifies what EANS may be used for, but not all uses may be reimbursed.
- Whether or not reimbursement will be considered federal financial assistance is unclear and further federal guidance is needed.
- The law bans any use of GEER II for school choice measures such as scholarship tax credits, vouchers, and the like.
- A private school may not participate in both EANS and the new round of PPP. Schools that received a PPP loan prior to December 27, 2020, remain eligible for EANS.
Allowable Uses For EANS Funds:
Here are the following allowable uses for Emergency Aid for Non-Public Schools (EANS) funds:
(A) supplies to sanitize, disinfect, and clean school facilities.
(B) personal protective equipment.
(C) improving ventilation systems, including windows or portable air purification systems to ensure healthy air in the non-public school.
(D) training and professional development for staff on sanitation, the use of personal protective equipment, and minimizing the spread of infectious diseases.
(E) physical barriers to facilitate social distancing.
(F) other materials, supplies, or equipment to implement public health protocols, including guidelines and recommendations from the Centers for Disease Control and Prevention for the reopening and operation of school facilities to effectively maintain the health and safety of students, educators, and other staff during the qualifying emergency.
(G) expanding capacity to administer coronavirus testing to effectively monitor and suppress coronavirus, to conduct surveillance and contact tracing activities, and to support other activities related to coronavirus testing for students, teachers, and staff at the non-public school.
(H) educational technology (including hardware, software, connectivity, assistive technology, and adaptive equipment) to assist students, educators, and other staff with remote or hybrid learning.
(I) redeveloping instructional plans, including curriculum development, for remote learning, hybrid learning, or to address learning loss.
(J) leasing of sites or spaces to ensure safe social distancing to implement public health protocols.
(K) reasonable transportation costs.
(L) initiating and maintaining education and support services or assistance for remote learning, hybrid learning, or to address learning loss.
Note on reimbursements: The law allows EANS funds to be used to reimburse schools for purchases already made for these purposes, except for the items in paragraphs C, D, I, and L which are not eligible for reimbursement (with the further exception that allows reimbursement for portable air purification systems). Again, it is unclear whether reimbursements constitute federal financial assistance.
EANS and PPP Considerations and FAQ
Should A School Pursue EANS or PPP Funds?
Private schools may participate in either the second round of PPP or the new EANS program, not both. (A PPP loan received before December 27, 2020, does not disqualify a school from EANS). Some considerations:
PPP: Applicants for a second-draw PPP loan must demonstrate that their gross receipts in any 2020 quarter are at least 25% less than the same 2019 quarter. This might be a decisive factor for a school. While you may know your receipts are down, you have to be able to document it.
EANS: All private schools are eligible, but the law requires SEAs to prioritize those which enroll low-income students and are most impacted by COVID. WCRIS is working with state officials to influence how DPI interprets this variable.
For what purposes may funds be used?
PPP: May be used for payroll, including benefits, mortgage interest, rent, utilities, and more.
EANS: The law provides 12 specific COVID-related uses such as supplies for sanitation, professional development on sanitation, improved ventilation, education technology, expanded space, physical barriers, etc. (See above).
Will a school become a recipient of federal financial assistance (FFA)?
PPP: Yes. However, such status should last only during the length of the loan. Thanks to our legal friends at the Association of Christian Schools International (ACSI), more information from that a school may consider on this issue is here. The SBA’s FAQs make clear how long FFA status applies: “any legal obligations that you incur through the receipt of this loan are not permanent” and “no longer apply” “once the loan is paid or forgiven.” This resource offers more detail. Whether a new Presidential Administration will change this is unknown.
EANS: A school should not become a recipient of federal financial assistance under EANS because a public agency will maintain control of funds. (This is similar to the process of equitable services where schools receive assistance or supplies). However, it is not clear whether or not FFA is implicated when a school which receives reimbursements under EANS for earlier expenses. Further guidance is expected from USDE.
How soon will a school gain access to funding or services?
PPP: Loans begin again January 11, 2021, and continue through March. A school could access loans relatively quickly.
EANS: This program will take longer for schools to access services. Governors have until February 8 to apply for EANS funds and states have 30 days after receipt of funds to make an application available to private schools in that state. The SEA then has 30 days after receiving a school’s application to approve or deny it. The question is how quickly a governor and SEA will choose to implement EANS. It must be noted that EANS funds that remain unobligated six months after the state receives them will revert to the general GEER fund for use at the governor’s discretion.
How much emergency aid might a school expect?
PPP: The school will determine how much to borrow according to its own capacity and within the requirements of the law.
EANS: The school will receive assistance/services from an SEA or its agent(s) according to its place within the SEA’s priorities based on low-income student enrollment and the impact of the emergency. This depends on how the SEA establishes and implements those priorities.
Where can schools find more information about PPP?
The Small Business Administration (SBA) website provided the following updates:
Letter from the Administrator: SBA Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns (01-06-21)
Interim Final Rule: Paycheck Protection Program (PPP) as Amended by the Economic Aid Act (01-06-21)
Interim Final Rule: Paycheck Protection Program (PPP) Second Draw Loans (01-06-21)
