On March 27, the CARES Act (or H.R. 748) was enacted by Congress. Among other provisions, the legislation provides meaningful benefits for student borrowers and more than $14 billion to institutions of higher education to “prevent, prepare for, and respond to coronavirus.”
Some of the provisions include:
Payments on federal student loans that are held by the Department of Education are suspended through September 30, 2020 and interest is waived for the duration of the suspension.
An institution’s obligations to return Title IV funds, other than assistance received as part of Federal Work Study (FWS) programs, is waived if a student withdraws during a payment period or period of enrollment due to the COVID-19 outbreak.
If a student does not complete a semester due to the COVID-19 outbreak, the semester does not count toward the time limits prescribed for federal Pell Grants and federal subsidized loans.
The institutional matching requirement for Federal Supplemental Educational Opportunity Grant (FSEOG) programs and Federal Work Study (FWS) programs is waived for award years 2019-2020 and 2020-2021.
The Department of Education may waive or modify allowable uses of funds and matching requirements for grants awarded under the Federal TRIO and GEAR-UP programs as a result of the COVID-19 outbreak.
There are still many questions regarding the scope and implementation of this law.
