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How the $2 trillion stimulus bill affects Duke amid COVID-19’s ‘monumental’ cost to universities

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The economy is getting an infusion of trillions of dollars, and, although Duke might be in line for a small slice of that pie, administrators say that it won't cover the costs of coronavirus.

The $2 trillion economic stimulus and relief bill signed into law last week targets the economy as a whole, which is struggling up against COVID-19. The bill, which is formally called the Coronavirus Aid, Relief and Economic Security—or CARES—Act, is hundreds of pages long.

Among those hundreds of pages, few address higher education, and Duke administrators said that any funding received won't be enough to cover extra costs.

"We expect to receive some funding from the bill but whatever it is will be a small fraction of the real costs to the university of this crisis, both for the disruption to education and research, and of course for the health care that our hospitals and clinics are providing to COVID-19 patients from across the region," Michael Schoenfeld, vice president for public affairs and government relations, wrote in an email.

Only around $30 billion of the stimulus package has been allocated to the U.S. Department of Education to respond to COVID-19. Of that $30 billion, more than half goes either to K-12 education or directly to state governors as part of a relief fund. In the end, higher education is left with just more than $14 billion.

President of the American Council on Education, of which Duke is a member, told the New York Times that the money provided for higher education is "woefully inadequate." Although Schoenfeld did not use the same language, he wrote that Duke is making the case to state and federal authorities that universities—including Duke—will be an important part of economic recovery, pushing for greater support.

The rules dictating where those billions of dollars are sent are complex, but most of the money will go to universities based on their number of Federal Pell Grant Program recipients—need-based grants provided to some students with demonstrated financial need.

Duke was not one of the two schools singled out for special funding, both of which are schools in Washington, D.C.: Gallaudet University, which primarily serves deaf and blind students, and Howard University, a historically black university.

The stimulus package gives universities extensive freedom in deciding how they spend money that they are given. It can be used to cover "any costs associated with significant changes to the delivery of instruction due to the coronavirus," according to the bill, though it does exclude athletics and religious worship among other areas of spending. Those changes could cover the switch to online classes, which Duke has shifted to for the rest of the Spring semester.

The education section of the bill also pushes institutions of higher education to continue to pay their employees and contractors despite any other changes due to coronavirus—though only to the "greatest extent practicable,” according to the bill.

In another section—the COVID-19 Pandemic Education Relief Act of 2020—Congress loosened regulations around universities. Most of the other rule changes are technical, including changing rules around how schools move funds around internally. But one noteworthy change frees student loan borrowers from making payments through this September. No interest will be accrued on the loans until then. 

Schools can also now pay students for missed work-study time on campus in the case of an emergency like COVID-19. Students can be compensated for missed work either as a one-time payment or in multiple installments.

Schoenfeld told The Chronicle that Duke is still identifying policies "that will help students and employees." He also cautioned that Duke expects that there will be more help to come, calling the $2 trillion legislation a "down payment," with more measures to come.

He emphasized the "monumental" cost of the current crisis to Duke and other schools, warning that it could have lasting effects.

"Duke is more secure and better positioned than most to weather the storm, but it will be a difficult time for all colleges—almost certainly worse than the financial crisis of 2008," Schoenfeld wrote.

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