Janice Lozano
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed in March 2020 to provide financial relief to students, workers, and families with low incomes affected by the pandemic. The Act included the suspension of payments and interest accrual on federal student loans, providing temporary relief to borrowers. While federal student loans were automatically placed in forbearance, private student loans did not qualify for this benefit. Additionally, the CARES Act provided emergency grants to students, which did not need to be repaid. These grants aimed to cover basic needs such as food, housing, course materials, and technology. The Act also waived Satisfactory Academic Progress requirements, ensuring that students could maintain their academic standing and eligibility for federal financial aid.
| Characteristics | Values |
|---|---|
| Purpose | To get relief to students, workers, and families with low incomes |
| Type of aid | Emergency financial aid grants, student loans, tax credits |
| Amount | $2 trillion |
| Who does it target? | Students with low incomes, college students, workers, families |
| Who provides the aid? | Department of Education, colleges, universities, employers |
| Do students have to pay it back? | No |
| Does it count as income? | No |
| Does it affect other financial aid? | No |
| Does it erase late payments? | No |
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What You'll Learn
Students don't need to pay back CARES grants
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by the 45th U.S. President on March 27, 2020. The Act established the Higher Education Emergency Relief Fund (HEERF), which provides emergency grants to students facing financial hardship due to the COVID-19 pandemic. These grants are intended to cover expenses related to the disruption of campus operations, including food, housing, course materials, technology, healthcare, and childcare.
It is important to note that CARES grants are not loans, and therefore, students are not expected to repay them. This is clearly stated by Berea College, which emphasizes that the grants are "not loans; repayment is not expected." Drexel University also confirms that "you would not have to repay the amount awarded to you. The Federal Emergency Aid Grant funds are designed to be a grant, not a loan."
The CARES Act also provides temporary relief for students with federal student loans. Under the Act, payments on Direct Loans, Federal Family Education Loans (FEEL loans), and federally held student loans were suspended through December 31, 2020. This relief was later extended, and borrowers did not have to make payments until at least September 30, 2022. During this forbearance period, interest accrual on the loans was also suspended, preventing the loan debt from growing.
The CARES Act has provided significant financial assistance to students facing economic hardship due to the COVID-19 pandemic. By offering emergency grants and suspending student loan payments, the Act has helped students manage their financial obligations during a challenging time.
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Federal student loans in forbearance
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed on March 27, 2020, to provide relief to students, workers, and families with low incomes in response to the nationwide shutdown of businesses and schools, as well as job losses due to the COVID-19 pandemic. The CARES Act provided approximately $30 billion in fiscal support to states, K-12 schools, and higher education institutions.
Under the CARES Act, governors cannot cut higher education spending to receive emergency funding. At least 50% of the institutional funds must be allocated directly to emergency financial aid or grants for students to cover basic needs such as food, housing, course materials, technology, healthcare, and childcare. These grants are not loans and do not need to be repaid.
The CARES Act also provided temporary relief for student loan borrowers by suspending payments, involuntary collections, interest accrual, wage garnishments, and tax refund offsets on federally held student loans. This relief was initially set to expire on September 30, 2020, but was later extended to December 31, 2020, through an executive order from the Trump Administration. This period of temporary relief is known as a student loan forbearance, during which borrowers typically do not have to make payments on their loans.
It's important to note that the CARES Act does not erase any late or missed payments made before March 13, 2020. While collections activities are on hold during the forbearance period, borrowers may still need to make payments once this period ends. Borrowers can contact their lenders to discuss long-term repayment solutions and get back on track if they are behind on their loans.
The CARES Act provided much-needed financial support to students and borrowers during the pandemic. However, it may not have gone far enough for those with low incomes, and there are concerns about transparency and oversight in the distribution of funds.
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Emergency financial aid grants
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed on March 27, 2020, to provide relief to students, workers, and families with low incomes in response to the shutdown of businesses and schools, as well as job losses, across the country. The CARES Act established the Higher Education Emergency Relief Fund (HEERF), which allocated funding to eligible institutions of higher education (IHE) to provide emergency financial aid grants to students.
These emergency financial aid grants are designed to provide immediate financial assistance to students facing unforeseen circumstances that threaten their ability to meet essential needs. The grants can be used to cover a wide range of expenses, including housing costs, utility bills, medical expenses, and educational fees. It is important to note that these grants, unlike loans, do not require repayment, making them a more attractive option for students in financial distress.
To be eligible for these emergency financial aid grants, students must be currently or previously enrolled at an eligible IHE. The CARES Act defines a "student" as any individual who was enrolled at an eligible institution on or after March 13, 2020, the date of the declaration of the national emergency due to COVID-19. This definition was amended to include individuals who could be eligible under section 484 of the Higher Education Act of 1965 to participate in programs under Title IV of the HEA.
The application process for emergency financial aid grants may vary depending on the grantor. It may include online forms, paper submissions, or in-person interviews. Applicants must provide documentation demonstrating their financial situation and the circumstances necessitating assistance. This may include proof of income, bank statements, tax returns, and relevant bills or invoices. Personal statements or letters explaining the situation in detail may also be required.
It is important to note that the CARES Act also provided temporary relief for student loan borrowers. It suspended all payments on Direct Loans, Federal Family Education Loans (FEEL loans), and federally held student loans through December 31, 2020. This temporary student loan forbearance period helped prevent loan balances from growing during the pandemic.
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Governors can't cut higher education spending
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed on March 27, 2020, to provide relief to students, workers, and families with low incomes. The CARES Act included an emergency funding package of approximately $30 billion to support states, K-12 schools, and higher education institutions.
Under the CARES Act, governors cannot cut higher education spending in order to receive this emergency funding. This provision ensures that funding for higher education is protected and that states prioritize education even during difficult economic times.
The CARES Act also provided direct support to students, particularly those with low incomes. This included suspending payments on federal student loans, providing grants for basic needs such as food and housing, and waiving Satisfactory Academic Progress requirements to maintain financial aid eligibility. These provisions helped alleviate the financial burden on students and ensured continued access to higher education.
The CARES Act's support for higher education is significant, especially considering the deep state cuts in higher education funding over the last decade. These funding cuts have contributed to significant tuition increases, making it harder for students to enroll and graduate. The CARES Act's emergency funding and support for students helped mitigate some of these challenges and ensured that higher education remained accessible during the economic downturn.
While the CARES Act provided much-needed relief, it is important to recognize that it may not have been sufficient for all students and borrowers with low incomes. Additionally, the act does not erase any late or missed payments made before March 13, 2020, and individuals should still plan for repaying their debt over time. Nevertheless, the CARES Act represented a crucial step in supporting students and higher education institutions during a period of economic uncertainty.
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Suspension of student loan payments
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed on March 27, 2020, to provide relief to students, workers, and families with low incomes. The roughly $2 trillion stimulus package was in response to the shutdown of businesses and schools, as well as the millions of job losses caused by the pandemic.
The CARES Act provided emergency funding to states, K-12 schools, and higher education institutions. The Act also included provisions for the suspension of student loan payments. The majority of student loan borrowers were offered temporary relief, as payments on federally held student loans, involuntary collections, interest accrual, wage garnishments, and tax refund offsets were suspended through September 30, 2020. This relief was later extended through December 31, 2020. Borrowers enrolled in repayment plans like Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) also qualified for these suspended payments.
It's important to note that the CARES Act did not erase any late or missed payments made before March 13, 2020. It simply paused collections activities until after the relief period ended. During this time, borrowers could contact their lenders to discuss long-term repayment solutions.
While the CARES Act provided temporary relief for student loan borrowers, it did not go far enough for many students and borrowers with low incomes. Additionally, the suspension of student loan payments and forgiveness programs has been a source of stress for borrowers, as the resumption of payments can be challenging.
The CARES Act grants provided by Berea College are not loans and do not need to be repaid. These grants were awarded based on estimated costs incurred due to the disruption in March and were distributed to eligible students automatically.
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Frequently asked questions
No, the CARES Act grant is a grant and does not need to be paid back.
The CARES Act is the Coronavirus Aid, Relief, and Economic Security Act. It was passed in response to the shutdown of businesses and schools due to the Coronavirus pandemic.
The CARES Act provides emergency financial aid grants to students to cover expenses such as food, housing, course materials, technology, healthcare, and childcare. It also provides temporary relief from federal student loan payments.
