Moneyman's College Financial Aid Blog

Mad props to Nicki Minaj. That’s it. No other reason. Just love for her.

OK, well, I will say that if there is a big alarm bell for higher education, we pounded it these last few weeks! “Somebody call 911… shawty fire burning on the dance floor”. Never mind, that’s Sean Kingston.

Regardless of the background music you have running in your head right now, it is pretty clear that we are in emergency times. Last week, the US Congress passed (and the President signed) the CARES Act (the “Coronavirus Aid, Relief and Economic Security Act”), also known as the $2 trillion relief package. There are some pretty important parts of this law and today’s post is going to review them (and what might have impact for you). If you want to read along in the final text of the law, feel free to do so — you can find the text here. Just keep in mind that the final bill is 335 pages long; I’ve picked out the important pieces for you and for higher education below.

First let’s talk about the individual taxpayer checks that are coming. Under Section 2201 of the Act (pages 55-60), a new program called “Recovery Rebates for Individuals” is created. Under this program, most taxpayers will be getting a stimulus check in the amount of up to $1200 per adult (with income caps) and $500 per child under the age of 17 in the household. CNN has a pretty handy calculator to determine how much you can expect in your stimulus check. Remember, this is based on your 2019 Adjusted Gross Income (if you already filed your 2019 Federal Income Tax Return) or your 2018 return. Since I know you read every blog entry with care, just a reminder that you can learn a lot more about Federal Taxes by visiting this section of the blog.

The next big item is the amount of Emergency Grant funds for colleges and universities. The Act sets aside about $12.5B in emergency funds for institutions to help students during this crisis; you can find the rules for this under Section 18004 (pages 287-288) of the Act. These funds can be used in the following manner: 1/2 MUST be used to help offset student expenses by providing direct grants to students, while the other 1/2 CAN be used to offset the institution’s expenses in moving to online education (including technology, payroll, etc). Individual colleges will see large amounts of money directed to them under this program; the American Council on Education ran an estimate of how much they think colleges will each receive (based on enrollment, Pell participation, and other data). These numbers are estimates only, but as an example USF (Main Campus) is expected to receive $29.5M, UCF to receive $47.6M, Miami-Dade College to receive $47.4M, Broward $27.5M, and so on. To be clear, these are only estimates and no final rules have yet been shared by the Department of Education (nor do we as colleges have this money yet since the law was just signed Friday) but we know that whatever comes this will be very helpful for you, our students.

And the bill goes on from there. Below I am going to highlight some sections of the bill, page numbers, and a brief description of the relief coming from this part of the Act. All of these are higher education changes:

• Section 3503 (page 116) – waivers of matching requirements for schools for Campus Based Fund (SEOG and FWS). This means that schools do not have to match Federal awards in these programs with their own dollars (it has been a 75/25 match) allowing schools to use this money in other ways to help students. This waiver is for two years (2019/20 and 2020/21).
• Section 3504 (pages 116-117) – use of Supplemental Education Opportunity Grant (SEOG). This section allows colleges and universities to use the funds awarded to them by the Feds in SEOG to now help both undergrads and grad students and to ignore the previous rules about awarding order (reserving this money for those who have Pell Grants first).
• Section 3505 (page 117) – paying Federal Work Study (FWS) students. This section specifically allows schools to pay their FWS students if the campus has to close (although online classes are still being offered) and students cannot work any longer on campus.
• Section 3506 / 3507 (page 118) – for students who withdraw, ignoring usage limits. Pell Grants and Subsidized Loans have aggregate limits so that once you use your limits, you can’t have any more Pell (or Subsidized Loans). Under this section if you withdraw during the period of national emergency, the Pell or Subsidized Loan you received won’t count against your limits.
• Section 3508 (pages 118-119) – Institutional refunds and loan flexibility. Again this section is for students who withdraw during this emergency. Under this section, neither institutions nor students would have to return unearned aid to the government (like we usually do if you don’t attend at least 60% of the term). In addition, if a student withdraws, the amount of any Federal loan borrowed for that period would be cancelled.
• Section 3509 (page 119) – Satisfactory Academic Progress. This section says that for students who withdraw due to the emergency, colleges can ignore the courses that they have withdrawn from in determining their completion percentage (which has to be above 66.6%).
• Sections 3510, 3511, 3512 (pages 119-124). These cover foreign institutions, emergency waivers, and HBCU capital financing. Important for these schools, but not relevant to many of you students.
• Section 3513 (pages 124-125) – Federal student loan relief. Under this section, Federal student loan interest rates are set to 0% and no payments are required for 6 months (until September 30, 2020). In addition, all forms of collection (wage garnishment, reducing tax refunds or other federal benefits) are halted.

There are some other Higher Ed sections but they are mainly technical (pages 125-130). The only one that may interest some of you is the waiver of teaching service for those receiving the TEACH grant during this time.

Sooooo…… lots of changes. When does this all go into effect?? Well technically as of the day the law was signed but we usually get some guidance from Federal Student Aid at the Department of Education on how to implement changes. We have no guidance or announcements yet on the CARES Act so stay tuned. There is a lot more to come.

For now, ask your questions. I’m sure you have some. I can’t promise answers but I will sure try!!