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States Seek MOE Waivers from ED
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Eight States and a U.S. territory have submitted requests to the U.S. Department of Education (ED) to waive the requirement attached to federal stimulus funding that States maintain funding for higher education as a condition of receiving the pandemic aid. 

All three pandemic stimulus laws have a maintenance of effort (MOE) requirements which prohibit States from reducing funding for higher education and K-12 education in exchange for receiving federal stimulus funding under the Governor’s Emergency Education Relief fund and the Elementary and Secondary School Emergency Relief fund.  Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, States were required to maintain funding for fiscal years (FYs) 2020 and 2021 at the average dollar amount spent in FY 2017, 2018, and 2019.  While under the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) and the American Rescue Plan Act (ARP), States are required to maintain funding for FY 2022 and FY 2023 based on the overall average percentage of funding spent on education in FYs 2017, 2018, and 2019.  Those requirements can be waived in certain circumstances where the resources available to the State have declined significantly, or the State has spent a significant amount on pandemic response which reduces the remaining amount available for regular-year spending.  In guidance on Maintenance of Effort under stimulus laws, ED has said it does not anticipate approving many, if any, such waivers and indicates that it will be looking closely on what other costs States incurred.

For at least one State submitting a waiver request for the higher education MOE requirement, the State has increased funding for higher education in terms of dollars, but the overall percentage of funding spent for higher education is less than the baseline comparison point.  ED is reportedly reviewing the MOE requests but has not indicated when decisions will be rendered.  If any requests are not approved, the States will be required to increase their higher education funding enough to be in compliance, or they will be required to pay back certain federal stimulus funding.

Resources:
Emma Whitford, “States Ask Ed Dept. for Funding Waivers,” Inside Higher Ed, February 24, 2022.

Author: KSC

About the Author

Kelly Christiansen is an associate with the Washington, DC law firm of The Bruman Group, PLLC. Established in 1980, the Firm is nationally recognized for its federal education regulatory and legislative practice, providing legal advice regarding compliance with all major federal education programs as well as the federal grants management requirements, including the Education Department General Administrative Regulations (EDGAR). In addition, they work with agencies on federal spending flexibility, allowability, policies and procedures, audit defense and resolution and legislative updates. The Firm provides government relations services for the National Association of State Program Administrators (NAESPA).