Federal rescue efforts deployed to help student debt crisis during pandemic — MARIST CIRCLE
The coronavirus pandemic has undermined the country’s economy and worsened the student debt crisis. In 2019, the total amount of national student loan debt exceeded $1.5 trillion, and that number only increases more significantly in times of crisis. Despite some relief efforts to help ease financial pressures on students during the pandemic, individuals are not satisfied and are waiting for the Biden administration to intervene more broadly.
“Even before the coronavirus pandemic, many Americans were struggling to repay their student loans, and the public health crisis has made it worse for borrowers,” said Don Baylor Jr., senior associate at the Casey Foundation, in make the case.
Federal student aid has provided institutions and students relief packagesadjusted federal financial aid terms And put low interest rates on federal student loans. Typically, students accrue interest while studying; however, from March 2020 to December 2020, interest rates on direct unsubsidized loans were lowered to 0%.
the Cares Higher Education Emergency Relief Fund has provided over $14 billion in funding for higher education. In recent months, lawmakers have instilled the HEERF II Act, allowing institutions to offer financial relief programs to those who have been directly impacted by COVID-19. The second provision authorized by the CRRSAA Act allocated $81.88 billion to support education, in addition to more than $30 billion previously allocated for education funding last spring.
Latest updates of the HEERF II law:
On March 19, 2021, the U.S. Department of Education announced new assistance for schools allowing them to use the funds for the duration of the pandemic.
On February 25, 2021, the U.S. Department of Education updated the eligibility criteria for the HEERF Assistance Program and Supplemental Assistance Program (SAIHE).
On January 14, 2021, the US Department of Education added $21.2 billion to higher education institutions to supplement formal learning during the pandemic. The full press release is available here.
At Marist, Student Financial Services has been working directly with students since receiving the first round of Cares Act funding last spring. In early March, eligible students were notified by email and either set up direct deposit payment or opted to add the funding to their bill balance. If students did not register to receive funding electronically but were still eligible, the budget was automatically delivered to them.
Financial Services for Marist Students outlines the criteria for the 3,400 students who will receive funding if they do not already have:
Enrolled in an undergraduate or graduate program for Spring 2021
Submitted to FAFSA by February 24, 2021
Proof of U.S. citizenship has been submitted to Student Financial Services (f required)
$75,000 or less EFC established on FASFA 2020-2021
In a study conducted by the Pew Research Center, about 90% of federal student loan borrowers have chosen to suspend their monthly payments during the pandemic. A majority of these borrowers said they would no longer be able to repay their student loans in the coming months. Research indicates that borrowers still struggle, even when receiving federal assistance. The next promotion, the second promotion to enter the labor market during a pandemic, is expected exacerbate the rising debt curve; they enter an unstable workforce struggling with lower wages and rising unemployment claims.
Federal student rescue efforts can help individuals offset the cost of damages due to financial fallout from COVID-19. However, many researchers worry that the burden of student loan debt in times of crisis will hurt the nation’s financial security more than in previous years. The Biden administration has outlined its approach to the student debt crisis in the Biden campaign, and borrowers are wait for executive action for additional student loan assistance.