Here's how colleges, students will benefit from the $2 trillion coronavirus relief package
Students will also not have to worry about accruing interest on their loans.
Students will also be free of any involuntary collection of their wages for loan payments if they fall behind.
The Department of Education will suspend all loan payments from students through September 30.
College students are expected to receive generous loan flexibility and temporary relief from student loan payments as the U.S. House of Representatives is expected to pass a major $2 trillion relief package in an effort to mitigate the economic fallout from coronavirus.
Earlier in March, President Donald Trump and Secretary of Education Betsy DeVos announced that students who are paying off their student debt can defer their payments and interest for up to sixty days. In addition, the department suspended automatic payments for those over 31 days delinquent on their payments.
However, the CARES bill that was passed 96-0 in the Senate late Wednesday night extends the suspension of payments and offers even more relief to students and families struggling to get through the pandemic.
[RELATED: Trump admin offers alternative to student debt forgiveness during coronavirus pandemic]
Section 3513 of the bill authorizes Secretary DeVos to suspend all loan payments until September 30 and suspends all accrual of interests during the suspension. In addition, the bill has “suspended all involuntary collection related to the loan” for students, including the garnishment of wages or the reduction of tax refunds that would happen if there were delinquent payments.
However, as Money.com reports, the suspensions are only good for “federally held” loans and do not apply to private loans.
In addition, Forbes has reported that there is no loan forgiveness for student loans through the Federal Family Education Loan program, phased out in 2010, and Perkins loans, which expired in 2017.
Section 3504 of the bill allows for colleges and universities to grant emergency aid for affected students for “unexpected expenses and unmet financial need as the result of a qualifying emergency.”
Section 3505 allows for the institutions to make payments to those who had participated in the work-study program. The bill also allows for the adjustment of subsidized loan usage and Pell Grant duration limits to help students affected.
In addition, section 3508 of the bill allows for the students to cancel the obligations of loan payments if a student withdraws during the payment period as “a result of a qualifying emergency” and allows for the secretary to waive the amounts of outstanding Pell Grants or other forms of assistance.
The package will also establish a Higher Education Emergency Relief Fund that allows for colleges to use the funds they receive to cover costs including “significant changes to the delivery of instruction due to the coronavirus” and allows colleges to use no less than 50 percent of the funds to give to emergency financial aid grants to the students of the college “for expenses related to the disruption of campus operations” which include the cost of attendance, food, housing, textbooks, and other expenses.
The legislation, the largest of its kind in American history, is expected to easily pass when the House of Representatives convenes Friday morning.
Trump has signaled he will sign it into law upon passage.
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