Universities make out like bandits with Biden's $1.9 trillion COVID package
The new COVID-19 federal relief bill signed into law by President Joe Biden on Thursday contains billions more for American colleges and universities.
Universities will receive another $40 billion in this round of stimulus.
President Joe Biden's $1.9 trillion spending package will send $40 billion to colleges and universities while making dependent college students eligible for coronavirus stimulus payments for the first time.
The American Rescue Act's infusion of nearly $40 billion into the Higher Education Emergency Relief Fund will nearly triple the amount of relief money that colleges and universities have received thus far.
In a departure from the stimulus setup in the first two coronavirus relief package, college students who are claimed as dependents on their parents' tax returns are now eligible for $1,400 stimulus payments, albeit indirectly, as CNBC also reported. Their stimulus payment would be sent to the tax filer who claims them as a dependent. In most cases, that means their parent. These payments would be sent to noncitizens, including those who are here illegally because they overstayed their visas, according to Newsweek.
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It will be up to families to decide whether or not the student receives that money, or if it stays with the household.
In addition to the stimulus payments, federal funds will also reach college students through Higher Education Emergency Relief Fund grants to students.
As established by the CARES Act and continued by the second stimulus package, the American Rescue Act requires colleges to use at least 50 percent of their stimulus funding to make emergency grants to students. Schools may choose how they distribute this funding.
It is likely that colleges will choose to send some of this funding to noncitizen students, based on the uproar that ensued when then-Secretary Betsy DeVos advised higher education administrators that only citizens should be able to receive grants from CARES Act funds. A group of California community colleges sued Secretary DeVos for the ability to send taxpayer dollars to noncitizens, including DACA students and DREAMers, as reported by Bloomberg.
[RELATED: Biden's stimulus plan makes billions already thrown at colleges look like chump change]
Included in the bill is a stipulation that any student loan forgiveness granted between now and 2026 is exempt from the federal income tax. The income tax exemption would apply to all student loans, including those not held by the federal government.
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