Additional Funding for Catholic Schools in the December COVID-19 Relief Bill

The COVID-19 relief bill passed on December 21, 2020 grants the U.S. Department of Education $82 billion in a new Education Stabilization Fund (ESF) that has three parts:

  • Governors Emergency Education Relief Fund (GEER): $4.1 Billion. Of that money, $2.75 billion is reserved for non-public school students.
  • Elementary and Secondary School Emergency Relief Fund (ESSER): $54.3 Billion – public school students only participate in this fund.
  • Higher Education Emergency Relief Fund: $22.7 Billion.

NOTE: The information below is a first look at the new aid provided in the latest relief bill. There are a number of details that need further guidance for implementation. That information will be forthcoming from the U.S. Department of Education.

Private school participation in the GEER fund $2.75 billion private school fund

  • Allocation of the funds to the states will be based on the number of low-income school-aged children at or below 185% of the poverty level that attend non-public schools in the state.
  • The Secretary of Education invites the state governors to apply for the fund. If they do apply and are approved, the governors appoint their state education department (SEA) to administer the program and invite private schools to apply.
  • The SEA has 30 days to approve or deny grant applications under the program.
  • SEA shall prioritize assistance to non-public schools that enroll low-income students and are most impacted by the emergency.
  • Private schools may not apply for the GEER fund if they are applying for a second Paycheck Protection Program (PPP) loan. Schools must choose between the programs. If a school received a PPP loan in the first go-round, they may apply for the new PPP loan or the GEER but not both.
  • Reimbursements: the new bill permits the SEA/LEA agency to reimburse schools for certain allowable expenses that schools have incurred since the pandemic began. There is no guidance on how this is to be implemented.
  • No portion of the GEER fund may be used to provide tuition assistance to scholarship organizations or individual student scholarships or tuition aid to families.

Allowable expenditures in GEER funds include most that were covered under the original CARES Act: supplies to sanitize school facilities; personal protective equipment; improving ventilation; training for staff on COVID safety; physical barriers to facilitate distancing; other materials to implement public health protocols; expanding capacity to administer testing and tracing; educational technology; redeveloping instructional plans or addressing learning loss; transportation costs.

Additional provisions that may impact Catholic schools:

Paycheck Protection Program - The Act creates a second round of PPP loans for borrowers with no more than 300 employees and meets other eligibility criteria. Religious organizations that meet the specified criteria are eligible for a loan.

Tax Provisions:

  • Employee retention credit and deferral of payroll tax provision in the original CARES Act are extended.
  • Charitable Contributions: The CARES Act legislation extends provision for tax year 2021 allowing single individuals to deduct up to $300 and couples to deduct up to $600 in charitable gifts, even if they do not itemize.