House, Senate Introduce Financial Aid Legislation for Coronavirus Outbreak
March 16, 2020

​Legislation introduced in both the House and Senate last week would provide more than $3 billion in COVID-19 support funding for higher education and preK-12, including a new student emergency grant program. The bills also provide more flexibility for certain Title IV financial aid statutory requirements for students and institutions impacted by the outbreak.

Sens. Patty Murray (D-WA), Kirsten Gillibrand (D-NY), and Chuck Schumer (D-NY) introduced the Supporting Students in Response to Coronavirus Act S. 3489), with Rep. Bobby Scott (D-VA) introducing a nearly identical companion bill (H.R. 6275), both on Friday. Neither measure is likely to move as a stand-alone bill, but the ideas presented are expected to be considered in a separate, more comprehensive emergency appropriations bill.

Among the proposed funds in both bills is $1.2 billion ($600 million for both fiscal year 2020 and 2021) for emergency financial aid for higher education institutions. Schools can make grants to students of up to $1,500 each academic year to help them meet unexpected expenses related to their basic needs during a qualifying emergency. Priority would go to the institutions most heavily affected by a qualifying emergency and to Historically Black Colleges and Universities and other minority serving institutions. A separate program would give $1.2 billion in grants to states to distribute to colleges and universities and preK-12 districts impacted by COVID-19 for planning, training, sanitizing, and providing meals to students.

Other statutory provisions broadly address all qualifying emergencies and include more flexibility on loan limits, waiving the required return of Title IV funds for students who withdraw, giving institutions broader authority to offer students approved leaves of absence, and allowing foreign institutions to offer distance educations in the case of a public health emergency. They currently are prohibited from providing distance education to U.S. students not enrolled in a study abroad program.

Both bills allow the Secretary of Education to exclude from a student's Pell Grant lifetime limits any semester or equivalent that the student does not complete due to COVID-19, and waives the obligation to repay loans taken out under the same circumstances.

Trump Administration to Waive Interest on Student Loans

One area the bills don’t cover is assistance with interest on student loans. But at a news conference Friday to declare a national emergency over the pandemic, President Trump said he is issuing an emergency order to waive student loan interest “until further notice.”

The Department of Education (ED) clarified later in the day that monthly payments will not go down for most borrowers, but instead, the entire payment will go toward paying down the principal. The one exception is borrowers whose incomes have fallen because of the outbreak.

When borrowers pause their monthly payments because of a hardship (a process known as forbearance), the interest normally continues to pile up until they can start paying again. Under the emergency order, no interest will accrue as long as the waiver is in effect, both for people already in forbearance and for those who may be soon.

Waivers are automatic, and ED has said it is working on making them retroactive to March 13.

As The New York Times reported, “It’s not clear who decided to do things this way and why, or even if any of this was the initial intention of the White House. Establishing an interest-rate waiver that lowered bills would have been enormously complicated: The federal government relies on several outside servicers to bill borrowers and collect their payments, and many have committed errors in recent years.”

Loans issued through state agencies and others, including from big private lenders like Sallie Mae, are not covered, nor are Federal Family Education Loans or institution-held Perkins loans.

Federal Coronavirus Guidance​

For institutions

Department of Education—guidance for ensuring web accessibility for students with disabilities for schools utilizing online learning (March 17)

Department of Education—guidance on FERPA and COVID-19 (March 12)

Department of Education—interruptions of study related to COVID-19 (March 5)

Centers for Disease Control and Prevention—interim guidance for college and university administrators (March 2)

For international students and scholars

Department of Homeland Security (DHS) on potential procedure adaptations for F and M nonimmigrant students (March 9)

DHS on F and M nonimmigrant students (January 29)

State Department guidance to Exchange Visitor Program Sponsors on J-1 visas

From the federal science agencies

National Institutes of Health (NIH) Late Application Policy due to COVID-19 (March 10)

NIH FAQs on proposal submission and award management due to COVID-19 (March 10)

National Science Foundation (NSF) FAQs about COVID-19 for NSF Proposers and Awardees (March 4)​