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Congressional lawmakers have passed their third and most comprehensive piece of legislation designed to provide economic relief to individuals, corporations, and nonprofit entities impacted by the coronavirus.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides student aid support through numerous provisions. It also provides substantial higher education funding and tax relief.

Student Aid Provisions

Pell Grants awarded during the emergency will not be counted towards annual or cumulative limits if the recipient is unable to complete a term due to the COVID-19 emergency. 

The legislation also allows ED to waive Return to Title IV (R2T4) requirements for schools and students when a student withdraws because of the coronavirus. Institutions granting such waivers will need to report to ED the number of recipients, the amount of grant or loan assistance associated with each waiver, and the total amount the institution has not returned under Title IV.

The CARES Act relieves borrowers of the obligation to repay Direct Loans associated with a payment period when the student withdrew due to COVID-19. Additionally, terms impacted by the COVID-19 outbreak will be excluded from the calculation of a student’s Satisfactory Academic Progress. The legislation also excludes any portions of the Direct Loan payment period that a student is not able to complete during the COVID-19 pandemic from subsidized usage calculations.

Campus-Based Aid

The legislation waives the requirement for institutions to match federal funds for campus-based aid programs for award years 2019-20 and 2020-21. Additionally, it waives the limits on transferring funds between the Federal Supplemental Educational Opportunity Grant (FSEOG) and Federal Work-Study (FWS) programs while also allowing institutions to disburse FSEOG funds as emergency grants to undergraduate and graduate students. The maximum emergency FSEOG grant allowed would be the maximum Pell Grant for the award year (currently $6,195).

The CARES Act also allows institutions to make FWS payments for students for a period of up to one academic year, even if the student is unable to perform the required work due to the closure of an institution.

Debt Relief for Student Loan Borrowers

The legislation suspends borrowers’ obligation to make payments on their federal Direct Loans and ED-held FFEL loans through September 2020, and interest will not accrue on loans during this period. For borrowers in federal loan forgiveness programs, this suspension period will still count towards payment requirements even if payments are not made. Perkins Loans and private student loans are not included in this payment suspension.

ED has also suspended any involuntary collections of loan payments during this period, including garnishment of wages and reduction of tax refunds and other federal benefits for borrowers in default.

TEACH Grant and Teacher Loan Forgiveness Program recipients generally have their program requirements waived if their teaching and other service obligations were interrupted as a result of the virus.

Other important provisions in the legislation include higher education funding and tax relief.

While Congress is adjourned through April, lawmakers are already discussing the potential for another coronavirus response package of legislation. NACUBO will continue advocating for federal support for higher education in this time of crisis. Stay up to date on our coronavirus advocacy relief efforts as well as COVID-19 guidance for higher education.


Bryan Dickson

Director, Student Financial Services and Educational Programs


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