The New Stimulus Package and Your School—Round 2

The New Stimulus Package and Your School—Round 2
The New Stimulus Package and Your School—Round 2

School Heads//

January 10, 2021

The new $900 billion relief bill, signed into law on December 27, 2020, is called the Consolidated Appropriations Act. The bill includes direct payments to individuals, expands unemployment benefits, and reopens the popular Paycheck Protection Program.

It provides funding for schools, childcare, and vaccine distribution and administration. It also includes rental assistance, nutrition assistance, and grants for theaters and other live event venues. Here’s a quick look at what to expect in the way of additional support from this stimulus package.

Paycheck Protection Program

The popular Paycheck Protection Program is a significant aspect of the new stimulus package. This is a $284 billion-dollar program, and, like the first one, will be a forgivable loan.

Many independent schools took advantage of this program during the first and second quarters of 2020; however, some schools did not get their application approved before the program expired.

The application process for PPP2 is expected to be similar to the PPP1. It will be processed through your bank or other local lenders.

Schools that did not get a loan the first time are entitled to apply again. The same rules that applied in the CARES Act apply now:

  • 500 or fewer employees; and
  • no requirement to demonstrate a revenue loss.

For PPP1 to be forgivable, it must be used for payroll, rent, covered mortgage interest, and utilities.

Schools that received funding in the original lending program can apply for a second loan. However, the rules for approval have been expanded. To qualify, you must have:

  • fewer than 300 employees; and
  • must be able to demonstrate at least a 25% decrease in gross revenue during the first, second, or third quarters of 2020, as compared to the same quarter in 2019.

The amount you can borrow has decreased from $10 million to $2 million, and you are eligible for 2.5 times your average payroll. For PPP2 to be forgiven, it must be used for payroll, rent, covered mortgage interest, and utilities.

Additionally, PPP2 may be used for worker protection and facility modification expenses, including personal protective equipment, essential supplies, and covered operating costs such as software, cloud computing services, and accounting needs.


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Emergency Education Relief Fund

There is a new program for education called the “Governor’s Emergency Education Relief Fund.” This program provides emergency support through grants to educational agencies that each state deems significantly impacted by coronavirus so they may continue to operate, serve their students, and protect education-related jobs.

Within this program, there is a $2.75 billion emergency assistance program for nonpublic schools that will be handled through each state governor’s office by approved application.

Nonpublic schools that wish to receive assistance under this program must apply. You will be required to report the number and percentage of students from low-income families enrolled during the 2019-2020 school year, and a description of the emergency.

You will also be required to disclose if you received a previous loan from the Small Business Administration (SBA). The Governor’s Emergency Education Relief Fund will give priority to nonpublic schools that enroll low-income students, but it does not appear to eliminate nonpublic schools that do not serve low-income students.

Qualifying educational disruptions include:

  • supplies to sanitize, disinfect, and clean school facilities;
  • personal protective equipment;
  • improving ventilation systems, including windows or portable air purification systems to ensure healthy air;
  • professional development regarding sanitation, the use of personal protective equipment, and how to minimize the spread of infectious diseases;
  • physical barriers to facilitate physical distancing;
  • other materials, supplies, and equipment to implement public health protocols;
  • expanding capacity to administer coronavirus testing and contact tracing for teachers, staff, and students;
  • educational technology—including hardware, software, and connectivity—to support remote or hybrid learning;
  • redevelopment of instruction plans—including curriculum—to support remote or hybrid learning;
  • leasing of additional sites or spaces to ensure physical distancing; reasonable transportation costs; and
  • initiating and maintaining support services or assistance for remote or hybrid learning.

Emergency expenses that occurred anytime in 2020 may qualify for reimbursement unless a school has already received a loan from the SBA. The governor of each state will determine eligibility and the qualifying grant amount.

The set aside for nonpublic schools directly results from the hard lobbying effort by Orthodox Jewish and Roman Catholic groups.

ISM will continue to monitor the developments of this program and provide details as they become available.


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