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CARES Act Higher Education Provisions


President Donald J. Trump declared a U.S. national
emergency on March 13, 2020, in response to the COVID-
19 pandemic. The Coronavirus Aid, Relief, and Economic
Security Act (CARES Act; P.L. 116-136) was enacted on
March 27, 2020, to address income, health, and economic
security in response to the national emergency. This In
Focus provides brief descriptions of several higher
education provisions included in the law.
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To provide postsecondary education student relief, several
provisions in the CARES Act temporarily modify the
requirements of existing student aid programs, such as
those authorized under Title IV of the Higher Education
Act (HEA).



The Federal Supplemental Educational and Opportunity
Grant (FSEOG) program and the Federal Work-Study
(FWS) program are two campus-based financial aid
programs authorized under the HEA. Under the programs,
federal funds are awarded to institutions of higher education
(IHEs) that administer the programs.

Use of FSEOG for Emergency Aid. Under the FSEOG
program, IHEs provide grants to undergraduate students
who demonstrate exceptional financial need. The CARES
Act authorizes expansion of the FSEOG program to allow
IHEs to provide emergency grants to undergraduate and
graduate students for unexpected expenses and unmet
financial need as a result of a qualifying emergency.

FWS During a Qualifying Emergency. Under the FWS
program, IHEs provide part-time employment opportunities
for eligible undergraduate, graduate, and professional
students. The CARES Act permits IHEs to continue paying
students who participated in the FWS program but were
unable to fulfill their work-study obligation due to a
qualifying emergency. IHEs are permitted to make
payments as a one-time grant or as multiple payments.

Waivers of Campus-Based Aid Matching Requirements.
Under FSEOG and FWS, IHEs provide institutional funds
to match federal funds received. The CARES Act requires
that the Secretary of Education waive the matching
requirement under the FSEOG and FWS programs for
funds made available for award years 2019-2020 and 2020-
2021, except that private for-profit organizations that
employ FWS students continue to be required to provide a
match in funds. IHEs are also permitted to transfer up to
100% of their FWS allocation to the FSEOG program
during a period of a qualifying emergency.


Loans to support students' postsecondary educational
pursuits are currently available under the William D. Ford
Federal Direct Loan (Direct Loan) program and the Federal
Perkins Loan program. Loans were previously available
through the Federal Family Education Loan (FFEL)
program, and some of those loans remain outstanding.

Adjustment of Subsidized Loan Usage Limits. New
borrowers on or after July 1, 2013, may only borrow Direct
Subsidized Loans for a period not to exceed 150% of the
published length of the academic program in which they are
enrolled. If a borrower remains enrolled beyond this limit,
he or she will lose the interest subsidy on such loans. The
CARES Act permits any semester (or equivalent) that the
student does not complete due to a qualifying emergency to
be excluded from the 150% limits.

Temporary Relieffor Student Loan Borrowers. For all
Direct Loan program loans and for FFEL program loans
held by the Department of Education (ED), the CARES Act
(1) suspends all payments due and counts such suspended
payments towards specified loan forgiveness programs
(e.g., Public Service Loan Forgiveness) and loan
rehabilitation, (2) halts interest accrual, and (3) suspends
involuntary collections on defaulted loans, through
September 30, 2020.

Institutional Refunds and Student Loan Flexibility. If a
student withdraws from an IHE before the end of a period
of enrollment for which HEA Title IV federal student aid
funds were disbursed, the IHE and/or the student may be
required to return grants and student loans received for that
period to ED. The CARES Act requires the Secretary of
Education to waive the requirement that IHEs and students
do so in the case of students who withdraw from the IHE as
a result of a qualifying emergency.

Modifications to Teacher Loan Forgiveness
Requirements. The HEA authorizes loan forgiveness of up
to $17,500 for borrowers who teach for five consecutive
complete years in eligible low-income schools. The CARES
Act permits the Secretary to waive requirements that
qualifying teaching service be completed in consecutive
years under two conditions: (1) if a recipient's teaching
service is temporarily interrupted due to a qualifying
emergency, and (2) following such interruption, if the
borrower resumes teaching and completes five years of
teaching service, including teaching performed before,
during, and after the qualifying emergency.

Continuing Education at Affected Foreign Institutions.
Educational programs offered via distance education (e.g.,
online education) by foreign IHEs, and those offered in


April 7, 2020


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