Students
The bill includes relief for college students and graduates with outstanding federal student debt. Temporary student loan relief: All loan and interest payments would be deferred through Sept. 30 without penalty to the borrower for all federally owned student loans.
Work-study funds: It allows schools to turn unused work-study funds into supplemental grants and continue paying work-study wages while schools are suspended.
Education Dept. Will Stop Collections On Student Borrowers In Default
Students who are forced to drop out: Students who drop out of school as a result of the coronavirus wouldn't have that time away from school deducted from their lifetime limits on subsidized loan and Pell Grant eligibility. Those students would also not be asked to pay back any grants or other aid they've already received.
Higher Education
It also includes $5 billion for Community Development Block Grants, $13 billion for K-12 schools, $14 billion for higher education and $5.3 billion for programs for children and families, including immediate assistance to child care centers.
Coronavirus and Forbearance Info for Students, Borrowers, and Parents
The U.S. Department of Education (ED) office of Federal Student Aid are actively monitoring the new coronavirus/COVID-19 outbreak.
On March 27, 2020, the president signed the CARES Act into law, which, among other things, provides broad relief for federal student loan borrowers. Below we have answered questions about several provisions of the Act. Questions that have been added or updated are identified with “NEW” or “UPDATED” before each question.
If you’re concerned about your studies or loan repayment, we can help you understand what to do in certain circumstances. We’ll be adding information for students, borrowers, and parents to this page on a regular basis, so please check back frequently.
https://studentaid.gov/announcements-events/coronavirus
Included in the recently passed relief is a quirk that allows companies that make payments toward their employees’ student loans to contribute as much as $5,250 through Dec. 31, with that money not counting toward workers’ taxable income. For people who have jobs and are struggling to pay their loans, that could be great news.
With most college students being claimed as tax dependents, they will be ineligible for a $1,200 check from the government — despite facing similar financial circumstances to those the law is targeting.
The bill defines the funds in this section as provided “to each institution of higher education to
prevent, prepare for, and respond to coronavirus.”
. Recipients of funds must retain current employees to the “maximum extent practicable.”
The CARES Act includes urgently needed help for students, student loan borrowers, and colleges and universities, but it is only an important first step. Here are the details on the higher education and student loan-related provisions in the CARES Act.
Students with existing federal debt can expect “temporary student loan relief.” The source reports that “all loan and interest payments will be deferred through Sept. 30 without penalty to the borrower for all federally owned student loans.” According to Forbes, students that drop out mid-semester due to the pandemic may be subject to a cancellation in federal loans “for the current academic term.”
Under Public Service Loan Forgiveness (PSLF), borrowers with federal direct loans can qualify for loan forgiveness after making 120 monthly payments while working full-time for an eligible employer, which include government agencies and nonprofit organizations. Payments made while on an income-driven repayment plan, which reduce monthly student loan bills to a percentage of income and extend repayment terms to 20 or 25 years, count as qualifying payments for PSLF.
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