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CARES Act signed into law, includes support for afterschool, nonprofits, and child care

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CARES Act signed into law, includes support for afterschool, nonprofits, and child care

On March 27 the House passed the Coronavirus Aid, Relief, and Economic Security Act (The CARES Act), also known as the Third COVID-19 Supplemental Relief bill, and the president signed the legislation into law.

The third Coronavirus response package passed both the Senate and House unanimously and addresses multiple issues, industries, and needs. Provisions included in the bill would send checks to more than 150 million American households, set up loan programs for large and small businesses and nonprofits, increase funding for unemployment insurance programs, boost spending on hospitals, and more.

The bill, described in more detail below, has several provisions that are essential for afterschool providers, including:

  • The State Education Stabilization Fund can be used to support afterschool and summer learning programs and their providers
  • The additional funding for childcare can be used by afterschool providers/staff that are continuing to stay open to serve their existing students and/or the children of health care providers and other essential staff
  • It makes it clear that non-profits are eligible for all the resources targeted to small businesses.
  • Makes changes to the charitable deduction for tax year 2020 to encourage support of nonprofit organizations

After passage of the first two relief packages, Congress turned to the many varied needs of multiple sectors of the country’s economy, including education, welfare, health, and family services. Supporters of afterschool sent more than 11,000 messages and calls to members of Congress in March making the case for additional investments to support afterschool programs that have closed, as well as support for programs that are open and serving children of essential employees, and to ensure that out of school learning opportunities are accessible for students this summer and next fall to help address learning loss. National afterschool providers, intermediaries and supporters have also come together to call on Congress to support the field. While more support is needed, thanks to the outreach by the afterschool field Congress did include afterschool and summer learning among the activities that can be funded through new education grants.

The following provisions of the legislation are of particular interest to youth serving organizations and the afterschool and summer learning field:

Education

The law establishes a State Education Stabilization Fund funded at $30.75 billion with funds mostly split between Emergency Relief funds for Higher Education ($14.25 billion) and Elementary and Secondary School ($13.5 Billion). The stabilization fund also provides about 10 percent ($3 billion) that can be allocated at governors’ discretion for grants to local districts that the State Education Agency deems most impacted by COVID-19 to continue educational support and ongoing district operations

Within the Elementary and Secondary School Relief Fund,

  • $13.5 billion of this amount is set aside for K-12 education allocated to states based on Title I formula in the most recent fiscal year
  • State Education Agencies must distribute at least 90 percent of funds to school districts based on Title I formula (with up to 0.5% that may be used for state administration)
  • Local educational agencies (LEAs)can work with partner organizations to address community needs
  • Use of funds includes anything already in ESSA (which includes 21st CCLC), IDEA, Perkins-CTE, and the McKinney Vento Homeless Youth Act
  • Specific activities for this funding called out to address the pandemic include:
    • Planning and implementing activities during the summer and afterschool
    • Planning and coordinating meals
    • Online learning and other educational services
    • Purchasing technology
    • Mental health support
  • Includes an expectation that recipients of funds such as LEAs/school districts shall to the greatest extent practicable, continue to pay their employees and contractors
  • States must continue maintenance of effort; however, the secretary may waive the MOE requirement for states that experienced a "precipitous decline" in financial resources

Also separate from the state education grants is $100 million in funds for Safe Schools and Citizenship Education through Project SERV which provides education-related services—including counseling and referral to mental health services as needed—to LEAs.

Child Care

The Child Care Development Block Grant (CCDBG) is appropriated an additional $3.5 billion in grants to states for immediate assistance to child care providers to prevent them from going out of business and to otherwise support child care for families, including for healthcare workers, first responders, and others playing critical roles during this crisis.

Head Start is appropriated an additional $750 million for grants to all Head Start programs to help them respond to coronavirus related needs of children and families, including making up for lost learning time.

Community Services

  • Community Services Block Grant: $1 billion in direct funding to local community-based organizations to provide a wide-range of social services and emergency assistance for those who need it most

School Nutrition and Food Insecurity

  • Supplemental Nutrition Assistance Program (SNAP): $15.5 billion
  • Child Nutrition Programs (total): $8.8 billion (ensures children receive meals while school is not in session)

AmeriCorps and VISTA

The bill included provisions related to the Corporation for National and Community Service (CNCS) that provides participants serving in the National Service Corps programs (including AmeriCorps and VISTA) with the educational award they were due to receive before their duties had been suspended or placed on hold during the COVID-19 declaration of disaster. The bill also extend the age limits and the terms of service to allow individuals serving in national service programs to continue participating in programs after the COVID-19 declaration of disaster ends.

Nonprofit Organizations and Small Businesses

With regard to nonprofits including nonprofit afterschool and youth serving organizations and small for-profit afterschool providers, the legislation includes the following (more in-depth summary here):

  • A Charitable Giving Incentive, a new above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions of up to $300. The incentive applies to contributions made in 2020 and would be claimed on tax forms next year. The bill also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent.
  • The Paycheck Protection Program increases the government guarantee of loans made for the Payment Protection Program under section 7(a) of the Small Business Act to 100 percent through December 31, 2020. The bill also provides the authority for the U.S. Small Business Administration (SBA) to make loans under the Paycheck Protection Program and defines eligibility for loans as a small business, 501(c)(3) nonprofit, a 501(c)(19) veteran’s organization, or Tribal business concern described in section 31(b)(2)(C) of the Small Business Act with not more than 500 employees, or the applicable size standard for the industry as provided by SBA, if higher. The bill applies current SBA affiliation rules to eligible nonprofits. Includes sole-proprietors, independent contractors, and other self-employed individuals as eligible for loans. 
  • Allows businesses with more than one physical location that employs no more than 500 employees per physical location in certain industries to be eligible and is below a gross annual receipts threshold in certain industries to be eligible. Defines the covered loan period as beginning on February 15, 2020 and ending on June 30, 2020. Establishes the maximum 7(a) loan amount to $10 million through December 31, 2020 and provides a formula by which the loan amount is tied to payroll costs incurred by the business to determine the size of the loan.
  • Specifies allowable uses of the loan include payroll support, such as employee salaries, paid sick or medical leave, insurance premiums, and mortgage, rent, and utility payments. Provides delegated authority, which is the ability for lenders to make determinations on borrower eligibility and creditworthiness without going through all of SBA’s channels, to all current 7(a) lenders who make these loans to small businesses, and provides that same authority to lenders who join the program and make these loans.
  • Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations - this section of the bill provides payment to states to reimburse nonprofits, government agencies, and Indian tribes for half of the costs they incur through December 31, 2020 to pay unemployment benefits.

Next Steps

With passage of the CARES Act the House and Senate have gone on recess until late April. However work is already beginning on a fourth COVID-19 pandemic relief and recovery bill and friends of afterschool can continue to reach out to Congress about the needs of the afterschool field as it work to support students and families impacted by the pandemic. With regard to implementation of the CARES Act, look for blogs focusing and webinars from the Afterschool Alliance focusing on the different provisions. Additionally, guidance from federal agencies will be provided beginning this week to help ensure quick and effective implementation of the law.

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BY: Chris Neitzey      12/18/18

What does the Trump administration’s 5-Year STEM Education Strategy mean for afterschool?

NASA administrator Jim Bridenstine On December 4, the White House released their five-year STEM education plan, entitled Charting a Course for Success: America’s Strategy for STEM Education. The plan is a required component of the America COMPETES Act of 2010, which mandates that the...

BY: Chris Neitzey      12/07/18

Afterschool goes to college

After celebrating an updated law in Career and Technical Education (CTE) in July, it’s natural to ask “What’s next?” in the education landscape for Congress. One thing on the agenda is the Higher Education Act, or HEA, which governs federal investments in making quality...

BY: Jillian Luchner      10/09/18