A More Equitable Stimulus Formula for Community Colleges
The current CARES Act funding distribution formula short-changes community colleges. To ensure equity for community college students, Congress should use a formula based on head-counts, rather than full-time equivalents to distribute higher education stimulus funding.
Federal stimulus funding has been a critical lifeline for students and colleges dealing with the health and economic hardships of the coronavirus pandemic. In March, Congress passed the Coronavirus Aid, Relief, and Economic Security(CARES) Act, providing nearly $12.5 billion for colleges to distribute emergency aid to students and pay for unforeseen institutional costs related to the pandemic. While this aid has been crucial for colleges and students, the formula uses full-time equivalents (FTEs) for distributing funds; thereby, short-changing the community college sector, which enrolls mostly part-time students. For the next round of stimulus funding, Congress can improve the formula to better meet the needs of community colleges by allocating funds based on enrollment head-counts.
Problems with the FTE Formula
Under the CARES Act, the formula for distributing aid to colleges allocates 75% of an institution’s funds based on the FTE enrollment of Pell Grant students and 25% of funds based on the FTE enrollment of non-Pell Grant students. By using FTEs, the formula provides more funding per pupil to colleges that enroll a larger percentage of full-time students, compared to part-time students. As a result, the formula short-changes community colleges, where nationally, nearly two-thirds of students are enrolled part-time.
According to analysis by the Center for American Progress, community colleges (public 2-year institutions) received just 21% of CARES Act stimulus funding. Per pupil, the FTE formula allocated more money to wealthy, private four-year universities, than resource-limited community colleges.
Needs of Part-Time Students
While part-time community college students pay less each semester in tuition, they have not been less affected by the coronavirus crisis than their full-time peers. Regardless of enrollment intensity, students have incurred coronavirus-related expenses such as purchasing computers to participate in on-line classes, at-home broadband access, and basic needs including food and housing. In many circumstances, part-time students may be more in need of stimulus aid. They are more likely to rely on income from work and have suffered from layoffs; have dependent children and are in-need of new childcare options; and be financially independent without financial support from other family members.
To make up for gaps in available federal aid, community college foundations have provided scholarships for students to afford necessities, such as technology and groceries; however, this could be unsustainable long-term as community college foundation dollars are only a fraction of the endowments common in other higher education sectors.
Improve the Formula Using Head-Counts
To improve the formula for stimulus funding, Congress should allocate aid based on enrollment head-counts, rather than FTEs. According to the same Center for American Progress study referenced above, this change would increase the share of funding for community colleges from the current level of 21% to 30% and provide critical resources for the sector.
ACCT encourages Congress to adopt language of the House Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act and the Senate Coronavirus Child Care and Education Relief (CCCERA) Act to use a formula based on student head-counts, which would allocate funds to better meet student needs than the CARES Act.
ACCT’s full list of priorities for the next round of stimulus funding is available here.
Katie Brown is the Direct of Government Relations at ACCT and can be reached at firstname.lastname@example.org
José Miranda is the Senior Government Relations Associate at ACCT and can be reached at email@example.com
Allison Beer is the Senior Policy Analyst at ACCT and can be reached at firstname.lastname@example.org
 Authors’ analysis of U.S. Department of Education National Postsecondary Student Aid Study, 2016