College Students
Relief for College Students
What forms of relief are students impacted by COVID-19 eligible for?
- Emergency Financial Aid Grants from institutions to meet unexpected and urgent needs related to the coronavirus, such as expenses related to food, housing, course materials, technology, health care, and childcare.
- Federal Work-Study payments can still be received by students enrolled in the program.
- Canceled Student Loans for the semester for students who must drop out of school due to COVID-19.
- Students who received a Pell Grant or subsidized student loan will not have those types of financial aid counted toward their lifetime limits.
What relief is provided to federal student loan borrowers?
- Suspends Payments on all loans held by the federal government (Direct Loans and FFEL Loans held by the U.S. Department of Education) through September 30, 2020.
- Borrowers with commercially held FFEL loans and Perkins Loans are not eligible. Commercially held FFEL loans are federal loans that are held by private banks. FFEL loans were phased out in 2010. Some FFEL loans are held by the federal government, while others are still held by private banks.
- Private student loan borrowers are also not eligible.
- No Interest will accrue on such loans through September 30, 2020.
- No Involuntary Collections (garnishment of wages, tax refunds, and Social Security benefits) and no negative credit reporting for late payments during this time period.
- No Negative Credit Reporting for late payments during this time period.
- Forgiveness Programs: Student borrowers will continue to receive credit toward Public Service Loan Forgiveness, Income-Driven Repayment forgiveness, and loan rehabilitation even though they will not be making payments.
Does the six-month suspension of payments and waiver of interest apply to borrowers who have federally-guaranteed but commercially-held loans through the FFEL and Perkins Loan Programs?
No. The suspension only applies to all Direct Loans and FFEL loans held by the Department Education (which is about 25% of the FFEL portfolio).
Does the sixty-day protection from involuntary collections apply to these FFEL and Perkins borrowers?
No.
Does there need to be proof a hardship for students to qualify for relief?
No. The suspension of payments is automatic and does not require the borrower to prove hardship.
Will outstanding interest on student loans capitalize during the six-month suspension of payments and waiver of interest?
No. During the six-month period when payments are suspended, interest is also not accruing on federally-held loans. Therefore, there is no interest cannot capitalize (be added to the principal) on the loan.
What about interest that accrued prior to March 13th?
It remains unclear how interest that accrued prior to March 13th will be treated as this decision is left up to the Secretary of Education.
When will payments resume for federal student loan borrowers?
Starting August, student loan borrowers will receive notices to help inform them that their regular loan payments and interest accrual will resume on October 1, 2020. These notices will help protect borrowers by providing them with a transition period to stay on track as regular loan payments resume and to offer them the option to enroll in other relief options (such as income-driven repayment, which can lower a borrower’s monthly payment).
Do students taking online courses still qualify for relief provided in the package?
Yes. There are no restrictions on student relief under the CARES Act. However, the formula for allocating institutional funds excludes students who were enrolled exclusively online prior to the start of the COVID crisis, so online-only institutions will not receive funding through that element of ESF, and thus will not have those new funds to provide emergency aid to their students
For additional guidance on how to apply and learn about next steps as this critical relief becomes available, please refer to the U.S. Department of Education website.
Funding for Colleges and Universities
Is there any aid that the public universities are eligible for?
Yes. Under the Education Stabilization Fund, $13.9 billion is available for a Higher Education Emergency Relief Fund for institutions of higher education to directly support students facing urgent needs related to coronavirus and to support colleges and universities dealing with school closures. The relief fund is split up in three:
- All Institutions of Higher Education: $12.5 billion is available to all institutions of higher education based on the proportion of Pell grant enrollment who were not enrolled exclusively in distance education prior to the coronavirus emergency.
- Minority Serving Institutions: $1 billion allocated among the following minority-serving institutions:
- American Indian Tribally Controlled Colleges and Universities (TCCUs) o Alaska Native and Native Hawaiian-Serving Institutions (ANNHs)
- Predominantly Black institutions (PBIs)
- Native American-Serving, Nontribal Institutions (NASNTIs)
- Asian American and Native American Pacific Islander-Serving Institutions (AANAPISIs)
- Hispanic-Serving Institutions (HSI) program
- Postbaccalaureate Opportunities for Hispanic Americans (PPOHA) o Master’s Degree Programs at HBCUs
- Historically Black Colleges and Universities (HBCUs)
- Historically Black Graduate Institutions (HBGIs)
- Fund for the Improvement of Postsecondary Education Program (FIPSE): $348 million is available to the Secretary to provide grants to institutions that have the greatest unmet needs related to the coronavirus. The Secretary is required to give priority to institutions that will not otherwise receive grants of at least $500,000 through the Higher Education Emergency Relief Funds. There is no precise way of determining which institutions will receive FIPSE funding based on these priorities.
Governor’s Education Relief Fund: $3 billion is also available to allow Governors to address the needs of their elementary and secondary schools and institutions of higher education. Public colleges may be eligible for additional funding if the Governor determines they have been most significantly impacted by the coronavirus.
Will the funding go directly to the institutions of higher education?
Yes.
What formula factors will be used to allocate funding to institutions of higher education?
The $12.5 billion being awarded directly to institutions of higher education will be awarded based on two formula factors:
- 75% of the funds will be awarded based on each institution’s share of full-time Pell Grant recipients.
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25% of the funds will be awarded based on each institution’s share of full-time non-Pell recipients.
Are there any restrictions on how institutions of higher education can use this funding?
Yes. 50% of institutional allocations must be spent on emergency aid to students for expenses directly related to coronavirus and the disruption of campus operations. Funds cannot be spent on “payments to contractors for the provision of pre-enrollment recruitment activities; endowments; or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship.”
Are Minority Service Institutions (MSIs) eligible for other funds in the CARES Act in addition to the $1 billion allocated directly to them?
Yes, they are eligible both for a direct allocation and for additional funds available to MSIs.
What can the direct allocation of MSI funds be used for?
MSI funds are “to address needs directly related to coronavirus” and specifies that these funds “may be used to defray expenses (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, payroll) incurred by institutions of higher education and for grants to students for any component of the student’s cost of attendance (as defined under section 472 of the Higher Education Act), including food, housing, course materials, technology, health care, and child care.”
Do for-profit schools qualify for this funding?
For-profit schools do qualify for direct institutional allocations. There are not specific requirements for for-profits as they relate to these funds. However, the formula for allocating institutional funds excludes students who were enrolled exclusively online prior to the start of the COVID crisis, so many of the largest for-profits will see less in terms of direct aid.
What amount of funding is going to Florida?
Is there a maintenance of effort requirement (MOE)?
Yes. States must maintain higher education FY20 and FY21 funding at the same levels as the average of the three prior years. The U.S. Department of Education can waive the MOE for states that experience a precipitous decline in financial resources.