CARES Act Includes Several Student Aid Provisions

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) contains several provisions relating to paying for college. These provisions are identified in the law as the COVID-19 Pandemic Education Relief Act of 2020.

In addition to a payment pause and interest waiver on certain federal student loans, and tax-free employer-paid student loan repayment assistance, the CARES Act includes the following student aid provisions for the duration of the national public health emergency.

Campus-Based Aid

• The CARES Act waives the requirement that colleges and universities pay a matching share of Federal Work-Study (FWS) program wages and Federal Supplemental Educational Opportunity Grants (FSEOG) in 2019-20 and 2020-21.
• The CARES Act allows colleges and universities to transfer leftover Federal Work-Study funding into the FSEOG program, so that the money may be awarded to students as grants.
• The CARES Act allows colleges and universities to use FSEOG funding for emergency financial aid. The emergency financial aid funds may be used to help undergraduate and graduate students with “unexpected expenses and unmet financial need” due to the coronavirus pandemic. The amount of emergency aid per student is capped at the amount of the maximum Federal Pell Grant for the applicable award year. Colleges and universities may use a scholarship-granting organization to process applications for emergency aid. The receipt of emergency aid will not reduce the student’s eligibility for need-based financial aid.
• The CARES Act allows colleges and universities to continue paying Federal Work-Study students for up to one year if the student’s employer or the college or university’s campus closes due to the coronavirus pandemic. The amount of the payment is based on the student’s scheduled Federal Work-Study hours, as opposed to the average hours worked previously. The money may be disbursed either as a one-time grant or in multiple disbursements. The U.S. Department of Education can waive the institutional matching requirements for Federal Work-Study wages paid under this provision.

Financial Aid Time Limits

• The CARES Act excludes subsidized Federal Direct Stafford loans from the subsidized loan usage limits (SULA), if the student was not able to complete the academic term for which the loan was obtained.
• The CARES Act excludes Federal Pell Grants from the duration limits, if the student was not able to complete the academic term for which the grant was obtained.

Treatment of Withdrawals

• The CARES Act waives the requirement for return of Title IV federal student aid if the student withdraws as a result of the coronavirus pandemic.
• The CARES Act cancels federal student loans that are associated with a payment period for which the student withdraws due to the coronavirus pandemic.

Satisfactory Academic Progress

• The CARES Act allows colleges and universities to exclude from the quantitative component of Satisfactory Academic Progress (SAP) any attempted credits that were incomplete due to the coronavirus pandemic. An appeal by the student is not required.

Online Education at Foreign Institutions

• The U.S. Department of Education may allow a foreign college or university to provide its educational program through distance education (online education) for the duration of the emergency and the following payment period.

AmeriCorps Service Requirements

• The CARES Act allows the Corporation for National and Community Service to substitute other service hours for AmeriCorps volunteers who are unable to perform their service due to the coronavirus pandemic. The Corporation for National and Community Service may also award volunteers the full value of their educational award if an early exit from the volunteer position was required.

TRIO and GEAR-UP Programs

• The CARES Act allows the U.S. Department of Education to modify the required and allowable uses of funds and matching requirements for grants awarded under the Federal TRIO and GEAR-UP programs.

TEACH Grant Program Service Requirements

• The CARES Act allows the U.S. Department of Education to modify the extenuating circumstances under which a TEACH Grant recipient may be excused from fulfilling their teaching service obligation. In addition, part-time service and temporarily interrupted service will be treated as full-time service. The requirement that the teaching service be consecutive will be waived if the grant recipient resumes teaching after a temporary interruption of their teaching service due to the coronavirus pandemic.

Higher Education Emergency Relief Fund

• The CARES Act includes a second set of emergency financial aid grants to students as part of a Higher Education Emergency Relief Fund (HEERF). At least half of the HEERF funding must be used to provide emergency financial aid grants to students “for expenses related to the disruption of campus operations due to the coronavirus.”

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