How Higher Ed Is Using COVID-19 Relief Dollars to Address Affordability

By: Jeff Selingo

As colleges and universities prepare to receive a third round of federal relief funds to assist with the disruption to their operations caused by COVID-19, higher education leaders are not only evaluating approaches to using the cash to fill immediate financial needs, but also long-term investments to lower college costs.

Going back to the CARES Act, the first federal relief bill that was enacted last March, college officials have been debating how best to spend the money allocated to their campuses. The CARES Act mandated that colleges and universities give half of their allotment directly to students. And yes, there were some restrictions on how those funds could be spent but for most institutions, that still left millions to spend on…what, exactly?

As they mulled over their options, something unexpected happened—administrators stopped looking at long-existing structures and policies as sacrosanct. To adequately support students learning remotely, universities set up access to digital course materials, awarded grants to struggling students to entice them into developmental education courses and expanded summer programs to better prepare incoming freshmen for the rigors of college.

“Because of the pandemic, I think we all lowered our resistance to new ideas,” said Sue Ellspermann, President of Ivy Tech Community College of Indiana, the nation’s largest singly accredited statewide community college system.

What Federal Funding Is Available?

To better understand how colleges and universities are leveraging federal dollars, let’s explain the array of COVID-19 relief funds for higher education since the onset of the pandemic:

With daily signs of momentum in the effort to vaccinate U.S. adults, college leaders are beginning to plan for a new normal on their campuses after the pandemic, some are using the relief money to invest in solutions to a problem that existed long before COVID-19—affordability.

The issue has reached crisis level, particularly in the United States, where for many learners the cost of earning a credential is a barrier to finding a job, getting a raise or landing a promotion. Higher education institutions face increasing pressure to find ways to reduce costs to students, prompting many colleges and universities to look for ways to boost retention and graduation rates.

Yet despite the first two rounds of emergency assistance to higher education institutions, some administrators remain puzzled about how to best use the money to tackle the affordability challenge—fearing that new and innovative ideas to help students save money will be rejected as an unallowed expense.

With the latest round of relief funds, the American Rescue Plan, the calculus is actually much simpler. “The government finally has realized there are better ways for institutions to serve students than replacing lost revenue,” said Jon Fansmith, Director of Government Relations at the American Council on Education. “There’s a lot more flexibility now to use this money to address everything under the umbrella of the cost of attendance,” he said.

Putting the Funds to Use: How Ivy Tech Did It

Most colleges and universities used some of their CARES Act funds to provide devices and internet access to students, solving an immediate need. Ivy Tech took the notion of access one step further by investing in its broader plan for making college more affordable. Two years ago, the system added 25 staff members to help redesign courses for digital use and held professional development courses in online instruction. The goal is making every course at Ivy Tech’s 40 locations available online—with the cost for course materials included in tuition.

Textbook costs are a source of significant financial anxiety for students, who often find themselves doing without this primary vehicle for their success. According to a report by uAspire, “Indirect expenses, non-tuition costs like textbooks, laptops, transportation, off-campus housing, and food, make up more than half the cost of college, yet colleges fail to give students essential information about them. These unforeseen costs can create financial hardship that prevent students from earning a degree, especially those from low-income backgrounds and communities of color who face affordability gaps nationwide.” Going without course materials puts students at a distinct disadvantage, since having access to textbooks can mean the difference between a passing grade and a failing one.

“Even before the pandemic, students were far too often going without purchasing course materials,” said Dominick Michael Chase, Vice President of Finance and Strategic Sourcing at Ivy Tech. “And we couldn’t even quantify what may have been happening during the pandemic in terms of forgoing course materials.”

Ivy Tech used $10 million of its CARES Act funds on Cengage Unlimited for Institutions, a repository of digital course materials that students can access no matter how many classes they take. Ensuring easier and less expensive access to textbooks and course materials was long a goal of Ivy Tech, and using federal funds for that purpose was approved by federal education officials who monitor COVID-19 relief spending.

Colleges and universities “can make their course materials more accessible to students using the money,” said Fansmith. “What they can’t do is use the money to implement a five-year plan to reduce the cost of course materials. It has to be tied back to the pandemic in some way.”

Today, more than 40 percent of students at Ivy Tech are enrolled in a class that uses Cengage materials, which amounts to a savings of about $150 per student. For the 43 percent of students who said they skipped a meal to buy a textbook, the savings is not just welcome, but vital. The relationship is paying off not just financially, but academically. Ellspermann reports that in the first semester alone, administrators saw a more than two percent pass-rate gain in students in courses offering Cengage subscriptions, bringing the system one step closer to offering inclusive tuition for all students.

To learn more about how Ivy Tech partnered with Cengage to implement a digital subscription-based model to bring inclusive tuition to over 90,000 students, explore this video.

Putting the Funds to Use: How Georgia State Did It

This type of arrangement also has long-term financial implications—students who pass courses don’t have to spend money to repeat them. “Any program or initiative that helps students graduate more quickly is a wise use of federal relief dollars,” said Tim Renick, Executive Director of the National Institute for Student Success at Georgia State University. This philosophy has been a key focus for Renick at the Atlanta-based university. About 60 percent of Georgia State students come from economically disadvantaged communities, with about 80 percent of undergraduates working a job while they’re enrolled.

The university has used COVID-19 relief money to expand many of its programs that produce cost savings. For example, believing that many of its incoming freshmen will have experienced learning losses in high school due to the pandemic, it’s expanding its Summer Success Academy for 2021—using federal relief dollars. GSU will help cover the costs for students to take six to seven credit hours during an eight-week period before the fall semester starts. They will receive tutoring and advising services in addition to a jump-start on earning credits toward graduation.

“Rather than sitting back passively and saying, ‘I wonder if the students will not do as well this fall,’ we know that they’re going to struggle because they’ve just gone through a really difficult 18-month period,” said Renick.

GSU is also using COVID-19 relief money to expand a program for students who struggle with first-year courses in both the university’s two- and four-year programs. During the summer, they pay the cost of tuition so students can retake courses they failed or dropped that are essential to their major. Students receive additional support from advisors, peer tutors and a supplemental instructor—a student who previously did well in the course—along with a $250 grant that serves as a small incentive.

Affordability and the Future of Higher Ed

On the surface, both programs appear to be about academic performance, but they’re really about affordability. According to Renick, in the last five years Georgia State has cut more than a half-semester from the time it takes students to complete their degrees. “The class of 2020 saved about $18 million in tuition and fee costs compared to the class of 2015 and we didn’t reduce any graduation requirements,” he said. “We’re just getting the students through those requirements a lot more efficiently.”

And that translates to increased affordability for students. “Given the federal dollars at stake, colleges and universities can’t go wrong investing in technology and programs that save students money,” said Fernando Bleichmar, Executive Vice President and General Manager for U.S. Higher Education at Cengage. “The question is how do you start iterating and testing and doing things quickly, which goes against the nature of higher education institutions?”

But after the speed at which post-secondary institutions transformed in March 2020 from in-person classes to remote instruction, administrators can no longer use the need for “more time” as an excuse not to innovate. Students need relief now. And that means having the tools and supports they need to succeed in-hand.

Download Jeff Selingo’s full white paper to learn more about the future of higher education post-pandemic.