How the CARES Act Helps College Students and Who Qualifies

College students should be happy to hear that their student loan payments will be deferred a little longer. Earlier this month, President Biden extended student loan relief provided in the CARES Act until January 31, 2022.

Recently, the U.S. Department of Education also announced it has an additional $3.2 billion in HEERF (Higher Education Emergency Relief) grant money available for students at historic and under-resourced institutions. So, how can you apply for CARES Act relief provided for college students?

When the $2.2 trillion CARES Act was passed in March, it included several provisions to help college students, including student loan forbearance and the HEERF emergency financial aid grants.

Under the deferred student loan payment provision, college students were able to hold off on repaying their student loans until September 30, 2020, at a temporary interest rate of 0 percent. On Aug. 6, President Biden announced that he was extending the pause on federal student loan repayments until January 31, 2022.

According to the U.S. Department of Education, student loan borrowers have saved about $5 billion a month due to the pause in repayments.

As part of the CARES Act, HEERF grants gave education institutions money to provide emergency financial aid grants to students with immediate needs related to campus disruption amid the COVID-19 crisis. The aid can be used for tuition reimbursement and other essential expenses like food, housing, healthcare, or childcare.

Since the grant money was given to the colleges and universities, students need to apply with the institution they attend. To be eligible for a HEERF grant, students must meet existing Title IV eligibility requirements and be approved of Free Application for Federal Student Aid (FAFSA). The educational institutions set other requirements. For example, at the ArtCenter for Design in Pasadena, Calif., students must also be in good academic standing and not currently in default of a student loan to be eligible.

Some students might be lucky enough to have their student loans forgiven altogether. President Biden has forgiven about $8.7 billion in student loans since he took office in January. Just this week, he announced he would be canceling another $5.8 billion in student loans.

However, not just anyone qualifies for student loan forgiveness under Biden’s plan. Instead, the cancellations target borrowers who meet certain qualifications. The $5.8 billion in student loans Biden canceled this week were those for total and permanently disabled borrowers, who might have a hard time getting a job to repay their student loans.

Earlier this year, Biden also forgave about $1.5 billion in total or partial student loan debt for borrowers who think that they were misled or defrauded by their college or university. This is part of the “borrower defense to repayment” regulation started by the Obama administration.

Although Democrats in Congress are pushing for a more widespread student loan forgiveness plan, there's a slim chance that this type of plan will be approved.