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COVID-19 stimulus directs aid to schools, suspends student loan payments

The deal would give $30.9 billion to the Education Department and a penalty-free pause in payments to student loan borrowers

The massive stimulus deal reached by senators would provide billions of dollars more in emergency aid for schools compared to the Republican version circulated earlier this week, while seeking to give student loan borrowers a pause in payments without penalty. 

The bill would provide $30.9 billion to the Education Department, including an “Education Stabilization Fund,” with specific allocations to support elementary and secondary schools as well as higher education institutions, according to a Senate Appropriations Committee summary. 

[Pelosi: Coronavirus stimulus deal an improvement, but under review]

Among its key provisions, the bill would suspend monthly payments on federally-held student loans through September, with no interest accruing during that suspension, but continue to count these months towards requirements for federal loan forgiveness programs. 

The bill did not include a proposal from leading Senate Democrats for $10,000 in outright debt reduction. 

The bill does, however, seek to address calls by colleges and states for direct aid, which was not included in the initial GOP draft bill. 

Under the stabilization fund, $3 billion would be set aside for emergency relief funds that governors could use for schools most severely affected by the coronavirus outbreak. Another $13.5 billion would go towards elementary and secondary school relief funding, most of which would be designated in the form of subgrants to individual schools.

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The bill would also set aside $14.3 billion for direct grants to higher education institutions, with priority given to schools with high number of Pell Grant recipients and that were not enrolled in distance education before the outbreak. 

The bill also includes several waivers designed to provide colleges flexibility under federal education law as they move operations online. It would allow the continuation of work-study payments to students unable to work due to the crisis as well as the exemption of disrupted school semesters from students’ federal Pell Grant limits and consideration for subsidized loans.

The bill grants broad waiver authority to the Education Department to waive requirements under various federal elementary and secondary education laws related to assessments, accountability, and reporting requirements.

Head Start would get an infusion of $750 million for additional staffing, and $3.5 billion would be directed to the Child Care Development Block Grant program to help support working health care providers and first responders. 

The stimulus plan reflects the widespread concern of educational agencies and schools about the Republican version circulated earlier in the week that did not include any emergency appropriations. 

Jon Fansmith, director of government relations at the American Council on Education, previously called the Senate GOP bill “deeply disappointing” and said he’d heard from school officials who worried they would not be able to remain open without direct aid. 

A stimulus bill introduced by House Democrats would allocate $60 billion in education emergency funding that could be used to cover the costs of cleaning and sanitizing schools, purchasing educational technology, training educators to use online learning tools, and providing students emergency funding for food, housing, and other basic essentials.

It would also grant $9.5 billion in relief funding for institutions of higher education.

Under the House bill, the Education Department would make all monthly payments on federally held student loans for the duration of the national emergency, providing all borrowers with at least $10,000 in debt relief. It would also halt all involuntary collection of student loan debt, including wage garnishment and tax refund offset. 

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