Student Loan News: Current Students Await Coronavirus Relief

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Welcome to Student Loan News, a weekly summary of developments and events affecting college debt in the U.S. Join us each Friday for a look at goings-on that could impact your own student loan situation.

Education Department yet to enact some key coronavirus relief measures

The coronavirus economic rescue package passed by Congress on March 27 — officially known as the CARES Act — provides $14 billion in funding for colleges and universities to finance remote learning and support disadvantaged students, according to a new analysis by the American Council on Education. But unfortunately, schools are still waiting to receive that aid.

Politico reported Thursday that the Department of Education had yet to say when it will distribute the stimulus funds, even as almost all campuses around the country have shuttered.

Once the coronavirus relief measures do reach schools and their students, they should provide a number of helpful options, including:

  • Emergency financial aid grants: Students who are no longer able to receive their work-study program paycheck could see it transitioned into a Federal Supplemental Educational Opportunity Grant. Alternatively, schools could opt to continue footing the bill for work-study, even if the student can’t complete their job remotely.
  • Adjustment of financial aid: Students who leave school due to the coronavirus can have the unused portion of their federal loan(s) canceled. They also won’t need to return federal financial aid if they’re forced to leave school because of the pandemic. Even further, students who received a Pell Grant or Direct Subsidized Loan but can’t complete their semester because of the coronavirus won’t see that debt count toward their lifetime borrowing limit.

Beyond the CARES Act, Education Secretary Betsy DeVos has also proposed microgrants, which would require Congressional approval and funding. Newsweek reported that DeVos believes these microgrants would help disadvantaged students adjust to off-campus education while the coronavirus outbreak lingers. DeVos didn’t specify the size of the microgrants or how they would be targeted.

As for schools’ own coronavirus-causes travails, some higher education experts are calling for additional government funding.

“This isn’t the last bus,” Terry Hartle, a senior vice president at the American Council on Education, told Inside Higher Education. Hartle added that “every college in the country is facing a cash flow crisis. Federal support will help, but we don’t think it will be enough.”

How it affects YOU: If you’re a college student waiting for coronavirus relief funds to reach your school — and, ultimately, your pocket — don’t stand still. Talk to your financial aid office about its support programs. (And if you’re a soon-to-be student, on the other hand, check out our guide on how coronavirus is affecting college admissions.)

Apart from the CARES Act, some schools are also keeping access open to on-campus housing. Some have also offered prorated refunds for unused housing or meal plans.

The Education Department has posted helpful FAQs for current students who are wondering about their status, although most answers direct students to contact their schools’ now-virtual financial aid offices.

Also in the news…

  • The Education Department plans to institute the six-month payment suspension on most federal student loans on April 10, according to Politico, even though the halt will be backdated to March 13. The department will refund any borrower who made a late-March or early-April payment.
  • The Philadelphia Enquirer published on Thursday a database that could help current and future students get a general idea of the monetary value of their degrees. The newspaper’s online search tool compares projected income to federal loan debt for 3,000-plus programs across Delaware, New Jersey and Pennsylvania.
  • Research published in February by New America indicates that colleges and universities have been locked in a “merit-aid arms race,” leaving those low-income students who don’t have top grades to compete for decreasing pools of need-based aid.

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