News: Federal Policy & Advocacy

Emergency Funding for Students Included in Congress’ Third COVID-19 Response Package

Friday, March 27, 2020  
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By Raymond AlQaisi, Policy and Advocacy Manager, and Carrie Warick, Director of Policy and Advocacy

After weeks of negotiations, Congress is set to pass a third legislative package in response to the coronavirus (COVID-19) outbreak. Named the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $2.2 trillion bill will provide, among many other supports, much-needed emergency aid for students. It will also grant waivers for financial aid requirements to students unable to complete the semester and protect student loan borrowers by pausing their payments and accrued interest.

“Our current public health crisis is exacerbating persistent inequities in postsecondary attainment, particularly for students from low-income backgrounds, students of color and first-generation college students,” said NCAN Executive Director Kim Cook. “This stimulus package includes important provisions to address some of those issues.”

During the deliberations over this legislation, NCAN advocated to Congress and joined a community letter sent to the leadership of the U.S. House and Senate reiterating the importance of provisions to support students – such as emergency funds for students’ basic needs – that are included in this new agreement. NCAN applauds Congress for supporting students as part of the COVID-19 relief efforts.

The CARES Act includes $30.75 billion in emergency support for local school systems (PK-12) and higher education institutions to aid students whose education has been disrupted as a result of this unprecedented public health crisis. Institutions of higher education (IHEs) will receive $14.25 billion in funding and will be required to use at least 50% of these dollars on emergency aid for students. This funding will be distributed to campuses using a formula weighted heavily toward campuses with higher proportions of Pell Grant recipients. Further, institutions will be permitted to use other federal student aid dollars for emergency aid as well.

Congress has also granted permission for the U.S. Department of Education to provide waivers on federal student aid distribution. This flexibility will allow Federal Work-Study (FWS) recipients to receive their wages through the end of the academic year even if they cannot continue working. Additionally, students unable to complete will not have this semester counted toward their Pell Grant Lifetime Eligibility Used (LEU) and Satisfactory Academic Progress (SAP) calculations.

In order to access these supports, students need to take action. Currently enrolled students who are seeking emergency aid, reinstatement of FWS wages, or who need to withdraw for the semester, should contact their school’s financial aid office.

For more information about financial aid and COVID-19, the Office of Federal Student Aid has created a helpful Q&A page.

Finally, federal student loan borrowers will receive relief as well. Borrowers currently enrolled in school will not have interest accrued on their unsubsidized loans, and if they must drop out for the semester, the loan balance will be forgiven. For borrowers in repayment, student loan interest will not accrue and payments are not required through Sept. 30. Importantly, even if students do not make payments between now and September, these months will still count toward loan forgiveness programs such as Income-Based Repayment and Public Service Loan Forgiveness.

More details on this legislation can be found on NCAN’s COVID-19 policy blog (updated regularly) and via Twitter.

The CARES Act passed the Senate 96-0, with a vote expected in the House on Friday, March 27. President Trump has stated that he will sign the bill.

Originally, Democratic leadership and education advocacy organizations requested significantly more than $30 billion in funding. For context, this emergency funding is less than was provided in response to the Great Recession (see the American Recovery and Reinvestment Act of 2009). Additionally, prominent Democrats in the Senate were unsuccessful in their push to include in the legislation some cancellation of federal student loan debts held by borrowers.

Review the email NCAN Executive Director Kim Cook sent to all NCAN members outlining how to help students access supports provided by the CARES Act.

And for more COVID-19 response resources, please check out NCAN's curated roundup, which includes lists of useful articles, webinars, member-submitted examples of communications to students, and more.