6 Things Students Need to Know During COVID-19
If you’ve got federal student loans, you may be wondering how the impact of the COVID-19 emergency affects your federal financial aid. Here, you’ll learn several possible relief measures you can take during the COVID-19 emergency, including asking your school about tuition refunds and credits, applying for emergency grants, seeking a leave of absence, and brushing up on the U.S. Department of Education’s office of Federal Student Aid’s (FSA) flexibilities knowledge.
You May be Entitled to Tuition Refunds and Credits
Due to COVID-19, some schools closed and many classes moved online or were cancelled. As a result, your school may offer you a refund that you can use to pay existing loan debt or a credit that you can use to pay for future education-related expenses. For more information about your school’s current policy, contact the office of the bursar or your financial aid office.
If you accepted a larger loan amount to help pay for room and board but your situation has changed due to COVID-19, you can return part of the aid you received to lower your total balance owed. Talk to your school for more details.
Federal Financial Assistance Is Available
COVID-19 Emergency Grants to Students
More than $18 billion was recently provided for COVID-19 emergency grants to current college or career school students. If your school participates in the federal student aid programs, you may be eligible to receive emergency grants for expenses related to the disruption of campus operations due to coronavirus. The grants can help cover eligible expenses such as food, housing, course materials, technology, health care, and child care.
These grants must be paid to you in cash (which could include a pre-paid card or other electronic method) and should be used at your discretion to pay for necessary expenses. For example, your school couldn’t apply your grant an outstanding balance on your account without your permission. Additionally, these grants should not be subtracted from your financial aid eligibility or award.
Your school may develop its own formula for determining who should receive a COVID-19 emergency grant, and not all students are eligible. Your school is required to disclose on its website how it is distributing these funds, how many students have received this grant, and how many dollars have been distributed to students. Reach out to your financial aid office to see if you are eligible as additional funding has recently been made available.
Please note: Stimulus checks or federal coronavirus-related grants should not be input on the Free Application for Federal Student Aid (FAFSA®) form as income in any way (taxable or untaxed income). However, you should list the full amount of funds in your bank account(s) at the time you’re completing the FAFSA form regardless of where the funding originated.
Federal Financial Aid Adjustments
Although schools are not required to adjust federal financial aid awards, they can consider your special circumstances, such as unanticipated loss of income, and make appropriate adjustments to your aid award.
Circumstances that could cause your 2021-22 FAFSA form to be inaccurate include
- a layoff;
- reduction in hours worked;
- a parent or guardian’s divorce or separation;
- a serious illness or disability in your family, which causes a reduction in income or increased medical expenses;
- a death in your family; or
- income from a rental property, court settlement, or alimony that is no longer available.
If your or your family’s financial situation has changed significantly from what is reflected on your federal income tax return (for example, if you’ve lost a job or otherwise experienced a drop in income), you may be eligible to have your financial aid adjusted. Complete the FAFSA questions as instructed on the application (including the transfer of tax return and income information), submit your FAFSA form, then contact the school you plan to attend to discuss how your current financial situation has changed. Note that the school’s decision is final and cannot be appealed to the U.S. Department of Education.
SNAP Benefits for Students
The Supplemental Nutrition Assistance Program (SNAP) is the largest federal nutrition assistance program. SNAP provides benefits to supplement the food budget of individuals and families in need so they can purchase healthy food. SNAP provides benefits via an Electronic Benefits Transfer card. This card can be used like a debit card to purchase eligible food in authorized retail food stores.
The Consolidated Appropriations Act, 2021 temporarily expands SNAP eligibility to also include students who either
- are eligible to participate in a state funded work study program or the Federal Work-Study (FWS) program during the regular school year, as determined by the college or career school; or
- have an Expected Family Contribution (EFC) of 0 in the current academic year.
To check if you’re eligible for FWS, view your financial aid offer. To check your ECF, log in to fafsa.gov and select the “View or Print your Student Aid Report (SAR)” option near the middle of the “My FAFSA” page. Your ECF will display in the upper right-hand corner of your SAR.
Your local SNAP office can help you find out how to apply for SNAP and can answer questions about your eligibility. SNAP state agencies administer the program, process applications, and determine eligibility. Find contact information for state SNAP agencies and local offices.
The new temporary exemptions will be in effect until 30 days after the COVID-19 public health emergency is lifted. Find updates about SNAP benefits for students.
Restoring Grant and Loan Eligibility
If your school determines that you withdrew due to COVID-19, you would not have to return the federal student aid you received for that school term. In addition, the aid you received for that term would not affect your lifetime grant or aggregate loan limit amounts.
If you have questions about your remaining federal financial aid eligibility, please contact your school’s financial aid office for more information.
Federal Work-Study (FWS) Wages
If you were denied FWS wages for a job you started and were displaced from due to COVID-19, check with your financial aid office to see if you can be paid those lost wages now. If you did not start your FWS job prior to March 13, 2020, and have been denied an opportunity to work because of COVID-19, check with your school’s financial aid office to see if there are other campus-based aid dollars available to replace lost FWS wages due to COVID-19.
There are Flexibilities for Continuing Enrollment During COVID-19
Approved Leave of Absence
If your travel-abroad program was cancelled or you became ill, your school may have offered you the opportunity to apply for a leave of absence. If granted such a leave, your school may transfer the financial aid you received for that term over to your next term. Contact your school’s financial aid office to find out more about the current leave of absence policy and financial aid options available.
Satisfactory Academic Progress
You must meet your school’s standards for satisfactory academic progress (SAP) toward a degree or certificate in order to continue receiving federal student aid. Satisfactory academic progress may include completing a certain number of credits within a given period of time and may also include meeting minimum grade point average (GPA) requirements. If you believe that your failure to complete enough credits or meet minimum GPA requirements was the result of COVID-19, contact the school’s financial aid office to explain your situation. The COVID-19 emergency relief flexibilities allow a school to exclude credits that a student was unable to complete due to COVID-19.
There’s a 0% Interest Rate Period
From March 13, 2020, through at least Sept. 30, 2021, interest is temporarily set at 0% for student loans owned by the U.S. Department of Education (ED). This 0% interest rate benefit includes Direct Unsubsidized Loans, which normally accrue interest while you’re in school.
Tip: If you can afford to make payments during this period, you will pay off your loan faster and lower the total cost of your loan over time.
To find out what type of loans you have, follow these steps:
- Visit your StudentAid.gov dashboard.
- Select “View Details.”
- Scroll down to the “Loan Breakdown” section. If your loan(s) is owned by ED, you will see “DEPT OF ED” before the loan servicer’s name. These are the loans eligible for the 0% interest rate.
After the 0% interest period ends, regular interest rates will apply. Regular interest rates are based on when your loans were first disbursed (paid out).
Always be sure to limit your borrowing to only what you need. To help you decide how much you can reasonably afford to borrow for school, use College Scorecard. It has data for some schools on your potential salary after completing certain fields of study.
Don’t Transfer Schools Without Researching First
If you’re considering transferring schools or enrolling at a different school during COVID-19, research school-specific data with College Scorecard. If you’re looking for a school in your area on College Scorecard, select “Show Me Options” then “Schools Near Me” to search within a set number of miles from your location.
Be sure to review how many credits the new school will accept based on work you already completed. If you plan to return to your regular institution after COVID-19, verify that credits earned at the school you plan to attend temporarily will be accepted by your home school.
Tip: Confirm that transferred credits will count toward the requirements of your major, not just as electives or general education requirements.
Postponing Your Education Can Affect Your Financial Aid Package
If you’re thinking about delaying your education (e.g., taking a “gap year”) or pausing your education, here’s what that could mean for your financial aid.
If you accepted an offer of admission, submitted a deposit, but decided you want to defer your first year of college, confirm the refund and readmission policy with your school. The financial aid you were offered may be different next year when you decide to enroll in classes. Aid offers are not guaranteed to be the same amount each year. Keep in mind that working during your gap year may increase your income. An increase in income during 2021 could increase your Expected Family Contribution (EFC) for the 2023-24 award year.
If you choose to delay continuing your education, payments on your student loans will begin after your six-month grace period. If you reenroll in school at least half-time before the end of your grace period, you will receive the full six-month grace period when you stop attending school or drop below half-time enrollment. If you have not found a job yet or need help paying your loans, consider enrolling in an income-driven repayment (IDR) plan. Every school has a different policy on readmission, so you should speak with your school about reentering your degree program.
Reminder: If you plan to go to school in 2021-2022, apply for financial aid for that year by filling out the 2021-22 FAFSA® form, which will be available Oct. 1, 2020. Don’t forget to follow your state and college deadlines.
Disclaimer: This article contains general statements of policy under the Administrative Procedure Act issued to advise the public on how ED and FSA propose to exercise their discretion as a result of and in response to the lawfully and duly declared COVID-19 emergency. ED and FSA do not intend for this article to create legally binding standards to determine any member of the public’s legal rights and obligations for which noncompliance may form an independent basis for action.
This article was written by Miranda H., a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid. Experiencing the financial aid process first-hand, Miranda is thankful for the Pell Grants she received during college that helped reduce her out-of-pocket costs. She encourages students to talk to their financial aid advisor about any additional grant or scholarship opportunities at least twice a year.