The President has just signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which passed the Senate on Wednesday, and passed the House of Representatives earlier today. This legislation is one of the largest emergency relief packages in American history and seeks to alleviate some of the worst effects of the swift economic downturn currently underway as a result of the coronavirus (COVID-19) pandemic.
The legislation covers an array of programs, including direct payments to Americans, an aggressive expansion of unemployment insurance, billions of dollars in aid to large and small businesses, and a new wave of significant funding for the health response and related industries.
Incorporated in this legislation is also emergency financial aid resources for our students, direct support for universities because of disruption of campus operations, and additional relief for Pell grant recipients and individuals receiving loans.
Please reach out to our team if we can be of any assistance.
Vice President, Government Relations
Associate Vice President, Federal Relations
Higher Education Language
The CARES Act provides immediate relief for our students on Pell Grants and individuals with student loans:
Halting all student loan payments for six months and pausing interest accrual on those loans during that time.
Suspension of involuntary collections during this six-month period, including wage garnishment, reductions on tax refunds, and reductions of any other federal benefits including Social Security payments.
Each month during this span would still count toward a qualifying payment toward an authorized loan forgiveness program.
Pell Grant recipients would not be required to repay the federal government if they had to leave school because of the crisis.
Any disrupted academic terms would also not count toward the lifetime limit on receiving Pell.
Allows payments to work-study students if they were unable to fulfill their work-study obligation for all or part of the academic year.
For students who dropped out of school as a result of COVID-19, the student’s grades do not affect a student’s federal academic requirements to continue to receive Pell Grants or student loans.
For teachers who could not finish their year of teaching service as a result of COVID-19, their partial year of service shall be counted as a full year of service toward TEACH grant obligations or teacher loan forgiveness and waives a requirement that teachers must serve consecutive years of teaching service for Teacher Loan Forgiveness eligibility.
Employer-provided education assistance provided prior to January 1, 2021 to be a tax-free benefit.
Federal Stabilization Funds
EDUCATION STABILIZATION FUND
The Act includes creation of a $30 billion Education Stabilization Fund, which includes a Higher Education Stabilization Fund of $14.25 billion, to be distributed based on a formula which weighs, among other metrics, the relative share of full-time equivalent enrollment of Federal Pell Grant recipients who are not exclusively enrolled in distance education courses prior to the coronavirus emergency.
Institutions would have to spend 50% of their allocation for emergency financial aid grants to students for expenses related to the disruption of campus operations due to coronavirus (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, healthcare, and childcare).
Universities using these funds may use the funds received to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus, so long as such costs do not include payment to contractors for the provision of pre-enrollment recruitment activities, endowments, or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship.
Universities must also “to the greatest extent practicable, continue to pay their employees and contractors during the period of any disruptions or closures related to coronavirus”.
STATE STABILIZATION FUNDS
CARES creates a $150 billion block grant program to states to support fiscal stabilization and for expenditures incurred and considering revenue declines, allocated by population proportions, with a minimum of $1.25 billion for states with relatively small populations.
Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations:
Provides payment to states to reimburse nonprofits, government agencies, and Indian tribes for half of the costs they incur through December 31, 2020 to pay unemployment benefits
Provides funding to pay the cost of the first week of unemployment benefits through December 31, 2020 for states that choose to pay recipients as soon as they become unemployed instead of waiting one week before the individual is eligible to receive benefits.
State Stabilization Funds
CARES creates a $150B block grant program to states to support fiscal stabilization and for expenditures incurred and considering revenue declines, allocated by population proportions, with a minimum of $1.25 billion for states with relatively small populations.
Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations:
Provides payment to states to reimburse nonprofits, government agencies, and Indian tribes for half of the costs they incur through December 31, 2020 to pay unemployment benefits.
Provides funding to pay the cost of the first week of unemployment benefits through December 31, 2020 for states that choose to pay recipients as soon as they become unemployed instead.
Healthcare and Emergency Response
Department of Health and Human Services: $140.4B
Assistant Secretary for Preparedness and Response (ASPR):$27 B
$100 billion for a new program to provide direct aid to health care institutions on the front line—hospitals, public entities, not-for profit entities, and Medicare and Medicaid enrolled suppliers and institutional providers
$16 billion to replenish the Strategic National Stockpile (supplies)
$3.5 billion to expand the production of vaccines, therapeutics, and diagnostics to help combat this pandemic
$250 million to expand the Hospital Preparedness Program’s support of emergency preparedness, including regional, state, and local special pathogens treatment centers, and hospital preparedness cooperative agreements
$4.3 billion to support federal, state, and local public health agencies, including for the purchase of personal protective equipment, laboratory testing to detect positive cases, infection control and mitigation at the local level to prevent the spread of the virus
Centers for Disease Control and Prevention: $4.3B
$1.5 billion– State and Local Preparedness Grants
$500 million– Global Health Security
$500 million– Public Health Data Surveillance and Infrastructure Modernization
$300 million– Infectious Diseases Rapid Response Reserve Fund
Administration for Children and Families
Child Care and Development Block Grant: $3.5 billion to support grants to states for immediate assistance to support child care for families, including for health care workers, first responders, and others playing critical roles during this crisis without regard to typical income eligibility requirements.
Aging and Disability Services Program: $955M
Department of Veterans Affairs: $19.6B
$14.4 billion to support increased demand for medical services
$2.2 billion for telework, telehealth and other information technology needs
$2.1 billion for medical community care at non-VA facilities
$590 million in dedicated funding to treat vulnerable veterans, including homeless veterans and those in VA-run nursing homes
Department of Homeland Security: $45.9 billion
$178 million of which shall be for the purchase of personal protective equipment and sanitization materials and respond to coronavirus, domestically or internationally.
FEMA: $44.9 billion
Disaster Relief Fund: $45 billion
Cybersecurity and Infrastructure Security Agency: $9.1 million
Health Research Funding
National Institutes of Health: $945M
To prevent, prepare for, and respond to coronavirus, domestically or internationally:
National Institute of Allergy and Infectious Diseases (Dr. Fauci) $706M
National Heart, Lung, and Blood Institute $103M
National Institute of Biomedical Imaging and Bioengineering $60M
National Library of Medicine $10M
National Center for Advancing Translational Sciences $36M
Office of the Director Common Fund $30M
National Science Foundation: $75M
To prevent, prepare for, and respond to coronavirus, domestically or internationally, including to fund research grants and other necessary expenses, including to support the agency’s ongoing RAPID grant response focused on near real-time research at the cellular, physiological, and ecological levels.
Charitable Contribution Language
Permits individuals to deduct up to $300 of charitable contributions, whether they itemize or not.
Increases the limitations on deductions for charitable contributions by individuals and corporations. For individuals, the 50 percent of adjusted gross income limitation is suspended for 2020. For corporations, the 10 percent limitation is increased to 25 percent of taxable income.