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Legislative Update

CARES Act Overview

The , a $172.1 billion bill from the Labor, Health and Human Services, Education, and Related Agencies passed out of the Senate and the House will vote on it today (Friday).

• For DEPARTMENT OF EDUCATION, here is the overview:
  
  $30.9 billion - Education Stabilization Fund: Flexible funding that will get out the door quickly and go directly to states, local school districts, and institutions of higher education to help schools, students, teachers, and families with immediate needs related to coronavirus, including:

  • Elementary and Secondary Education: $13.5 billion in formula funding directly to states, to help schools respond to coronavirus and related school closures, meet the immediate needs of students and teachers, improve the use of education technology, support distance education, and make up for lost learning time
  • Higher Education: $14.25 billion in funding to institutions of higher education to directly support students facing urgent needs related to coronavirus, and to support institutions as they cope with the immediate effects of coronavirus and school closures. This provides targeted formula funding to institutions of higher education, as well as funding for minority serving institutions and HBCUs
  • State Flexibility Funding: $3 billion in flexible formula funding to be allocated by states based on the needs of their elementary and secondary schools and their institutions of higher education. 
    • The legislation would require the Education Department to suspend monthly payments on all federally held student loans, without interest, through Sept. 30. Borrowers with those loans would not have their credit dinged for the suspended payments and the postponement would not interrupt their progress toward any federal loan forgiveness programs like Public Service Loan Forgiveness or income-driven repayment plans. The suspension of payments does NOT apply to private loans, federally guaranteed loans held by private lenders, nor federal Perkins loans. House Democrats’ plan had called for relief for those borrowers. The deal prohibits the Education Department from garnishing the wages, tax refunds or Social Security benefits of defaulted federal student loan borrowers through Sept. 30. The final deal does not include the $10,000 in student loan forgiveness per borrower that the Democrats had wanted.
      • Governors would receive a share of $3 billion to allocate at their discretion for emergency support grants to local education agencies hit hard by the virus. The funds would be used to support their continuing education services and ongoing operations. Higher education institutions could also receive emergency support.
      • The legislation would require states to maintain current levels of funding for public universities as a condition of receiving the education stimulus money. But that requirement can be waived by the secretary of education for states that have experienced a quick decline in financial resources.
      • Colleges and universities would be allocated the $14.25 billion based on their enrollment, heavily weighted toward those with large shares of Pell Grant recipients. That calculation would exclude students who were exclusively online before the pandemic, a funding criteria that would redirect funding toward brick-and-mortar campuses and away from large online programs.
      • The deal gives colleges flexibility, to continue paying Federal Work-Study students who are unable to attend their job because of the coronavirus. And students wouldn’t have to repay student loans they took out for a semester they couldn’t complete because of the pandemic. 
      • The legislation also creates a new tax benefit, which had been sought by large employers, for companies that help their employees pay off student loan debt. 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. 

APLU sent a chart with their predictions for what each university could potential receive from the stimulus packages. For our universities, they listed:

• MU: $15 million
• UMKC: $7.1 million
• Missouri S&T: $5 million
• UMSL: $5.9 million