The Coronavirus Aid, Relief, and Economic Security (‘CARES’) Act

  • 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.