April 2020 | Number 454
Congress Takes Action on Coronavirus
In the month of March, Congress passed legislation responding to the coronavirus crisis in three "phases." The phase 2 and 3 bills in particular included language of interest to private schools.

The following are some highlights of what Congress has passed in recent days, but is by no means an exhaustive list of the programs affecting private schools and other employers.
Education Stabilization Fund: Elementary and Secondary School Emergency Relief Fund
On March 27, 2020, President Trump signed "phase 3" COVID-19 relief legislation carrying an unprecedented $2 trillion price tag, which is larger than the federal government’s entire annual budget for discretionary spending and is roughly one-tenth the size of the American economy. Included in this package is $13.5 billion in grants to states for K-12 schools, part of a broader "Education Stabilization Fund."

The law requires equitable services to be provided to private schools under this program.

The legislation lists twelve categories of permissible uses of the funds here . State Educational Agencies (SEAs) and Local Educational Agencies (LEAs) should not begin making plans for the dispersal of these funds until the US Department of Education releases guidance on implementation of the new law, which is expected in the coming days.
Education Stabilization Fund: Governor's Emergency Education Relief Fund
The Education Stabilization Fund in the phase 3 bill, or "CARES Act," also includes $3 billion for governors to provide emergency support to schools most impacted by coronavirus. The law requires equitable services to be provided to private schools under this program as well. USDE guidance is forthcoming, but in the meantime, private schools should work with their State CAPEs to ensure that governors are aware of their needs.
Paycheck Protection Program (PPP)
One piece of the CARES Act that is receiving a tremendous amount of attention is its Paycheck Protection Program. The new law provides $350 billion for federally guaranteed loans to small employers (under 500 employees), nonprofits are eligible. The portion of the loan used for maintaining payroll has the potential to be forgiven.

According to the Small Business Administration (SBA): "You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Lenders may begin processing loan applications as soon as April 3, 2020." It is expected that loans will be disbursed on a first come, first served basis. A sample application form can be found here.

Since passage of the CARES Act, private school advocates have argued that Small Business Administration guidance is needed to clarify:

1) Whether use of these loans will lead to recipient of "federal financial assistance" status and the obligations that come with that;

2) Whether these loans can be used to pay the salaries of teachers involved in religious instruction; and

3) In the case of Catholic schools, whether the 500 employee limit will be based on the number of employees at a particular school or the number of employees in the diocese.

On April 2, the Treasury Department released guidance which references certain religious liberty protections (see pages 27-28) and announces that further guidance on religious liberty will be released "promptly."
Economic Injury Disaster Loans (EIDL)
Congress expanded the already existing Economic Injury Disaster Loan program to include a $10,000 advance. According to the Small Business Administration, "In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid."

In the past, religious organizations have not been eligible for the EIDL program. SBA guidance is needed on this question, as well as whether acceptance of these funds will lead to recipient of "federal financial assistance" status.

This Sherman & Howard one-pager may be of help in distinguishing between the PPL and EIDL programs.
Unemployment Insurance
The CARES Act includes emergency unemployment insurance benefits for individuals affected by the pandemic. If a nonprofit fully participates in its state’s unemployment benefits program, its employees will be eligible for $600 per week in addition to regular unemployment compensation under state law, as well a possible extension of time for provision of unemployment benefits.

If a nonprofit does not pay state unemployment insurance tax, but reimburses the state for unemployment benefits paid upon the termination of an employee, it will be eligible to receive 50% of the amount reimbursed to the state. Its employees will also be eligible for the additional $600 per week, as well as a possible extension of time for provision of unemployment benefits.

If a nonprofit neither pays state unemployment insurance tax nor reimburses the state for unemployment benefits paid upon the termination of an employee, the nonprofit does not receive any benefits under the CARES Act, but its laid-off employees will be eligible to receive Pandemic Unemployment Assistance from the federal government at no cost to the employer.
Partial Above-the-Line Deduction for Charitable Contributions
The CARES Act permits a deduction of up to $300 for cash contributions to charitable organizations, whether taxpayers itemize their deductions or not.
Emergency Sick Leave and Emergency Family & Medical Leave
On March 18, 2020, the president signed Congress' "phase 2" coronavirus relief bill, the Families First Coronavirus Response Act. It creates a national paid sick leave law and expands the Family and Medical Leave Act (FMLA). The Association of Christian Schools International (ACSI), a CAPE member organization, has posted this very helpful explanation of the new paid sick leave and FMLA provisions.
Hanging Together
At the time of the signing of the Declaration of Independence, Benjamin Franklin famously said, "We must all hang together, or, most assuredly, we shall all hang separately." In the here and now, the private school community is hanging together to get through this extraordinary and difficult time.

You know that CAPE is in the nation's capital, fighting to make sure that private schools are included in federal relief packages for K-12. But do not forget that State CAPEs across the country are in the trenches, working each and every day with governors, ombudsmen, and schools to ensure that private schools weather this storm. Meanwhile, CAPE's national member organizations are doing yeoman's work in the halls of Congress (if only remotely) and with their schools' administrators and teachers.

The United States Conference of Catholic Bishops (USCCB), the National Catholic Educational Association (NCEA), Agudath Israel of America, and the Montessori Public Policy Initiative (MPPI) have been particularly engaged on the advocacy front, as well as two CAPE member organizations that have set up indispensable coronavirus resource web pages:

These pages are being continually updated with everything from invitations to webinars, to analyses of federal policies, so make visiting them a regular part of your day.

However, CAPEs work would not be possible without the support and tireless efforts of all of its member organizations, listed below. As always, it's a team effort.
Private Education: Good for Students, Good for Families, Good for America
CAPE member organizations:

Agudath Israel of America

American Montessori Society

Association Montessori

Association of Christian Schools

Association of Christian
Teachers and Schools

Association of Waldorf
Schools of N.A.

Christian Schools International

Council of Islamic Schools
in North America
Council on Educational Standards
and Accountability

Evangelical Lutheran Church
in America

Friends Council on Education

Islamic Schools League of America

Jesuit Schools Network

Lutheran Church–Missouri Synod

National Association of
Episcopal Schools

National Association of
Independent Schools
National Catholic
Educational Association

National Christian School

Office for Lasallian Education
Christian Brothers Conference

Oral Roberts University
Educational Fellowship

Seventh-day Adventist
Board of Education

United States Conference of
Catholic Bishops

Wisconsin Evangelical Lutheran
Synod Schools
Affiliated State Organizations a coalition of national associations serving private schools K-12

Executive Director:
Michael Schuttloffel

Outlook is published monthly (September to June) by CAPE.
ISSN 0271-145

1300 Pennsylvania Ave, NW
Washington, DC 20004
Tel: 844-883-CAPE

Michael Schuttloffel
Executive Director
Phone: 844-883-CAPE