Everything You Need to Know About Student Loans and Coronavirus

The Coronavirus response has upended most of our lives, and every day it seems more questions are raised than are answered. This page is our attempt to cut through the noise and distill the important issues affecting student and graduate borrowers.

The format of the page follows a rough chronological order, so as new updates that we think are worth your time come in, we’ll add a date marker with our summary.

April 16 – Crowdsourced Website Tries to Answer “Is My Internship Cancelled?”

  • As the business world and the higher education world both attempt to make the best of this situation, many students are left wondering if their summer internships are still on
  • To answer that, we stumbled on a fantastic resource put together by undergraduates at Arizona state called, fittingly, ismyinternshipcancelled.com 
  • Check it out and definitely contribute if you have any updates regarding an internship you’re involved in

April 10 – Department of Education Releases List Detailing How Much Aid Your School Is Receiving

  • As part of the CARES act, $14 billion has been allocated to individual colleges and universities
  • According to Inside Higher Ed, The Department of Education released its list of schools and their funding allocation amounts on Thursday
  • According to the bill, at least 50% of aid must be given to students as emergency aid grants
  • Here’s the full list of schools and corresponding aid amounts, which were determined by an enrollment formula

April 1 – Most College Students Shouldn’t Expect That $1,200 Check

  • While 90% of American adults can expect a check from the government in the coming weeks, Americans aged 19-24 that can be counted a Dependent on another person’s tax return are excluded from the bill 
  • The bill provides a one time payment of $1,200 per individual making less that $75,000 a year, and $500 per child under 17, but makes it difficult for college aged adults between the ages of 19-24
  • This means that it doesn’t matter if you are claimed as a dependent, just that you can be claimed by a parent or guardian
  • From CNBC: “A taxpayer is allowed to claim a full-time student between the ages of 19 and 24 as a dependent, so the parent will not get $500 for a college student, nor can the college student generally claim $1,200.”

March 29 – Forbes Asks “Should You Really Stop Making Your Student Loan Payments?”

Summary

  • Now that the Coronavirus Stimulus Bill has been signed into law, anyone with a federal student loan is able to suspend their student loan payments, but should they?
  • Forbes digs into this issue and makes two salient points, we think:
    • First, payments are only being suspended, not made by the government, so the same total amount owed will be waiting for you after the 6 month grace period
    • Second, since interest is being waived during this period, it’s a good time to make a dent in the principal amount owed, if you have the ability to keep making payments
  • Of course, if you are experiencing financial hardship, getting rid of a monthly bill with no consequences is a no brainer

March 28 – What’s Not Included in the Student Loan Stimulus

Towards the bottom of this piece by Forbes is a nice round up of what’s excluded from the The CARES act, as it pertains to student loans.

Not Included

  • Private student loans. Any loan procured from a private company is not under the remit of this bill, so payments are expected to made on time and interest is set to accrue as usual. 
    • That being said, many private companies are creating policies of their own to manage this worldwide crisis. If you are having trouble making your payments, do not hesitate to reach out.
  • Student Loan Forgiveness. Despite a push by Senate Democrats to include $10,000 of loan forgiveness, no such amendment exists in the bill. 

March 27 – Congress Passes the $2 Trillion Coronavirus Relief Package, and President Trump Signs It Into Law

Impact

  • Most federal loan borrowers are excused from making payments for six months
  • Interest is waived on all federal loans and loan collectors are prevented from garnishing wages, tax returns and Social Security benefits to collect overdue payments
  • Nothing in the relief package affects private student loans
  • For the nerdy, you can read the entire text of the bill here
  • For the rest of us, this Buzzfeed article does a nice job summarizing

Odds and Ends

  • The bill includes a new tax break for employers who help pay their employees’ student loan bills. Under the bill, a company could pay up to $5,250 of an employee’s student loan payments each year on a tax-free basis.
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