Dive Brief:

• Colleges claimed about 90% 一 or $5.6 billion 一 of emergency student grant funding that the U.S. Department of Education distributed under the first major federal coronavirus rescue package, as of the end of November, according to a new government watchdog report.

• The department made more than $6 billion available to 4,778 schools that applied for grants funded by the Coronavirus Aid, Relief and Economic Security, or CARES, Act, the U.S. Government Accountability Office found.

• The GAO also examined how colleges verified whether students were eligible for the grants. The Trump administration limited them to those who qualified for Title IV aid, spurring condemnations and court battles.

Dive Insight:

The CARES Act, which was signed into law last March, earmarked about $14 billion in relief aid for colleges, about $6.3 billion of which was set aside for grants for students disadvantaged by the pandemic. 

The department under former Education Secretary Betsy DeVos initially did not impose conditions on which students could receive those grants. But she later announced they would be restricted to those who were eligible to receive federal student aid, cutting out international and unauthorized immigrant students. This decision drew legal challenges. Lawsuits in a couple of states successfully carved out exceptions for the grants to be used for those students. 

The GAO report notes the department's restriction and explains that about half of the schools that received funding used the Free Application for Federal Student Aid to verify eligibility for the grants. 

Some institutions explored alternate methods. One four-year public school gave graduate students the option of submitting either the FAFSA or an affidavit stating they qualified for federal financial aid. 

Policy experts predicted many schools would use the FAFSA to verify eligibility for financial aid, as it was one of the easiest ways to do so. However, they noted that this method would exclude a contingent of students who had not completed the form.

Based on a sample of 203 colleges, the GAO determined that institutions by fall 2020 had given students the vast majority of the grant money the department had sent to the schools at the time. The average award was about $830 per student, the agency estimated. 

It also examined the type of institution that received CARES grants. Of the $6.2 billion the department gave out, $3.1 billion went to four-year public schools and $1.3 billion and $1.1 billion was taken by two-year publics and private, four-year nonprofit schools, respectively. For-profit schools claimed the remainder. 

The department awarded each school an average of $1.3 million, though half of them received $422,000 or less, according to the GAO. 

The department is determining how to distribute grant funds that colleges did not claim, according to the report. It notes that 358 eligible schools did not accept their share of funding as of Nov. 20, leaving $63 million untouched.