There’s a lot to unpack in the $2.2 trillion CARES Act. Here are some key ways that businesses and educational institutions will be impacted by the bill.
On March 25, 2020, the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act was signed into law. At $2.2 trillion, the CARES Act is the largest emergency stimulus package ever passed in the United States. The CARES Act is a sweeping aid package that will provide emergency assistance to individuals, businesses, state and local governments (which includes funding K-12 schools and higher education), and public services, particularly the healthcare sector.
Details are still emerging about how and when the measures outlined in the CARES Act will be implemented. In an effort to continue supporting our engineering design community during this unprecedented situation, we’ve put together an overview of what businesses and academic institutions can likely expect from this aid package. We will continue to update this article as more information is released.
READ MORE: Innovative Ways the Engineering Community is Coming Together During the COVID-19 Quarantine
How the CARES Act Affects Businesses
About 44% of funding from the CARES Act will be allocated to businesses, with $500 billion going to large corporations and $377 billion to small businesses. A good portion of these funds will help stabilize hard-hit industries, like airlines, as well as ensure businesses can continue to pay bills, keep employees on the payroll, and brace for the “new normal.”
Image: Visual Capitalist
Medical Device Industry Impact
There are numerous measures in the CARES Act that will have a significant impact specifically on the medical device industry. In short, most of these measures are focused on enabling medical device organizations to increase efficiency so that they can reliably develop and produce much needed supplies. It’s likely that these changes will result in a need for increased hiring and training.
Here are some examples of the what the CARES Act outlines for the medical device industry:
- $16 billion will be added to the Strategic National Stockpile to increase availability of supplies such as masks and ventilators.
- The Secretary of Health and Human Services and the National Academies of Sciences, Engineering, and Medicine are instructed to report on the drug and medical device supply chain security.
- Medical device manufacturers will be under new obligations to report on any potential disruptions or shortages in the supply of devices that are deemed critical.
KEEP READING: Engineering Design Training Should Be the New Compliance Training in the Medical Device Industry
WIOA Funding Is Now More Flexible
The Workforce Innovation and Opportunity Act (WIOA) enables for-profit organizations to receive funding for training through formula grants distributed by their state. These non-competitive grants can help employers fund incumbent worker training, on-the job training, and apprenticeships. Since many engineering design and manufacturing businesses rely on apprenticeships and regular training to help employees learn how to use software and machinery, the WIOA program ensures that employers can provide this necessary training without breaking the bank.
Under the CARES Act, states will be granted more flexibility to use their WIOA funds as needed to address the COVID-19 emergency. Since WIOA funds cover training expenses like online learning platforms and software, businesses will likely have greater access to these funds in order to set up training programs online for remote workers.
GET STARTED: Find Your State’s WIOA Agency in this Free E-Guide
Small Business Funding
The bulk of the CARES Act funds going to small businesses (approximately $350 billion out of the total $377 billion) will be a lifeline in the form of a Paycheck Protection Program. The Paycheck Protection Program consists of government-backed loans for businesses with fewer than 500 employees to help them keep up payroll through June 2020. The program is flexible and even freelancers, sole proprietors, and contract workers can apply. If businesses are able to maintain their payroll during this period, they’ll also be eligible to apply for loan forgiveness.
The CARES Act also expands the Small Business Administration (SBA) Economic Injury Disaster Loan Program for small businesses experiencing decreased revenue, and includes tax benefits such as an employee retention credit. Hopefully, these measures will provide much needed relief to small businesses that are struggling, from local restaurants to machine shops.
WORKING FROM HOME? Discover our top tips on how to upskill remotely as an engineering design professional.
How the CARES Act Affects Academic Organizations
Out of the nearly $340 billion dedicated to state and local governments in the CARES Act, $14 billion will go to higher education and $13 billion will be allocated directly to K-12 schools. These figures are separate from the $43.7 billion dedicated to student loan relief and other benefits for students. In addition to funding, higher education institutions will benefit from tax provisions and regulatory flexibility.
Higher Education Funding
For higher education, there are clear guidelines about how the funds will be distributed. Most of the funds (about 90%) will go directly to institutions to “prevent, prepare for, and respond to COVID-19.” The amount of funding each institution receives is largely based on how many of their students are Pell Grant recipients. The remaining 10% of funds will be directed to minority-serving institutions and schools that are more dramatically impacted by the virus.
The guidelines for how to use the funding received are a little more flexible. At least 50% of funding received must be used to provide direct emergency aid to students. However, everything from food, housing, and healthcare to course materials and technology for online courses can be counted as “direct emergency aid.” It’s likely that the remaining funds will be used to support staff payroll and all other measures to prevent or respond to coronavirus.
Image: Hallie Busta/Industry Dive, data from the American Council on Education
CHECK IT OUT: How to Get Remote Access to Engineering, Architectural, Manufacturing Design Software for Online Students
CARES Act K-12 School Funding
The CARES Act offers more flexibility for K12 schools. Certain requirements such as state assessments will be waived, and few restrictions will be placed on how to use any funding received. However, it’s required that schools continue to pay staff to the best of their ability if they receive funding.
It’s likely that a significant portion of funds will be used to support and provide emergency resources for low-income, disabled, and minority students, which includes meal service and mental health services. K-12 schools can also use these funds to purchase sanitation supplies and conduct training on COVID-19 preparedness and prevention.
While more postsecondary students already have access to the internet, a personal computer, and are familiar with online courses, the shift to online learning will be a larger undertaking for K-12 schools and students. Here are some ways that K-12 school districts can use CARES Act funding to help transition to online learning:
- Adopting online learning platforms and curricula as needed
- Purchasing required technology, including devices and internet connectivity
- Planning supplemental and summer online programs
- Resources and planning for long-term school closures and conducting class online indefinitely
This won’t be an easy transition for most K-12 districts, but it’s becoming easier to move training and education online. Many students respond positively to digital learning formats like video-based tutorials.
NEED FUNDING? Check out the comprehensive list of K-12 grants that can fund your STEM curriculum.
