Covid Relief and the Latest Changes in Higher Education

covid relief changes higher educationHigher education is getting more money, thanks to the latest Covid relief package. The extra funding for education comes from the $900 billion pandemic relief bill passed by Congress. A total of $82 billion have been set aside for education, with higher education getting $22.7 billion. The Covid relief changes for higher education affect Pell Grants, FASFA, and student loans.

The Covid-19 relief changes for higher education is welcome news for many. The changes make it easier to repay some loans. However, the most significant changes are that the bill helps more students from low-income families pursue higher education. Even the FAFSA form is simpler to complete, which will help many more students — traditional and non-traditional students — qualify for federal loans, grants, and scholarships.

What do the changes in the Covid relief package mean for higher education? If you’re already in college or planning to go to college in 2021, how will you benefit from the Covid relief changes? This article looks at how higher education benefits from the latest Covid relief bill.

The Impact of Covid on Higher Education

Higher education didn’t escape the devastation that the coronavirus pandemic caused. As the virus swept through the country, businesses closed, millions lost their jobs, and schools had to slash their budgets. Reports indicate that lack of funding left many colleges and universities with a financial black hole.

Of course, lockdowns and social distancing restrictions impacted on-campus life. Many students got used to learning remotely or wearing face masks in the classroom while sitting 6 feet apart. Then there are the stress and anxiety of living during a pandemic — along with the fear of catching Covid.

The Coronavirus relief package for higher education came in the CARES Act. This Covid relief bill suspended student loans and fees and provided more financial aid for students. However, many of the Covid relief changes in the CARES Act only run until January 31, 2021.

Covid Relief Changes for Higher Education

In December 2020, Congress passed a bill, giving more financial help for education. The $900 billion Covid pandemic relief bill approved funding and assistance for K-12, internet access, vaccinations, student loans, and childcare. How do these changes impact higher education? Read on to find out.

Changes to the Pell Grant

Changes in the Covid relief package mean that more students will qualify for Pell Grants. The maximum Pell Grant award has been increased to give a bigger boost to financial aid. Changes in the way the Pell Grant is awarded mean that more students will receive the maximum amount.

How could these Covid changes to higher education financial aid affect you?

First, the maximum Pell Grant award is now $6,495, $150 more than the previous. Second, you automatically qualify for the full award if your family can’t contribute anything toward attending university or college.

The income threshold to get a Pell Grand increased, thus enabling more students from low-income backgrounds to go to college. For example, to qualify for the maximum Pell Grant, Congress changed the adjusted gross income (AGI) for families and single parents. The AGI is 175 percent of the poverty level for families, and for single parents, it is 225 percent.

Another change to Pell Grants in the Covid relief bill affecting higher education has to do with colleges and defrauded students. Students defrauded through a “successful borrower defense to repayment” claim, will get their Pell Grant eligibility restored.

In total, an estimated 555,000 more students qualify for free federal money. Additionally, 1.7 million will now be eligible for the maximum Pell Grant amount.

Related reading: What is a Pell Grant and how to get one.

Changes to the Pell Grant affect incarcerated students

Covid relief changes mean that higher education grants are now available for eligible prisoners. Since 1994, incarcerated persons couldn’t apply for Pell Grants. Now, prisoners who want to go to college can apply for Pell Grants using the FAFSA form.

Covid relief changes simplify the FAFSA form

Changes in the Covid relief bill mean that applying for higher education funding is more straightforward. The Free Application for Federal Student Aid (FAFSA) is the first step in applying for grants, loans, and some scholarships. However, the form’s complexity put many students off from completing it.

Now, there are just 36 questions on the FAFSA instead of 108. Some estimates say that around $3 billion in federal money is left on the table because students don’t complete the FAFSA. Increasing access to college funding will open the way for more students from low-income backgrounds to get a higher education.

Also, there are no longer questions regarding convictions for drug offenses. So, someone with a criminal record for drugs can now apply for federal financial aid.

Related reading: The best FAFSA tips to qualify for grants.

Loan forgiveness for historically black colleges and universities (HBCU)

The Covid pandemic relief bill also wipes out many federal loans that HBCUs received to modernize campus facilities. From the $22.7 billion relief for higher education, approximately $1.3 billion will go toward forgiving HBCU debt.

Tax incentives for employers to repay student loans

Under previous Covid relief changes, a moratorium on student loan repayments was a crucial part of the CARES Act. However, the student debt moratorium expires on January 1, 2021. As part of the current Covid relief, the freeze on loan repayments lasts until February 1, 2021.

In the new Covid pandemic package, there is a provision to extend the time employers can contribute tax-free money to help repay employees’ student loans by five years. Now employers can continue paying up to $5,250 tax-free toward student loan debt.

Covid Relief Changes: Key Takeaways

Changes in the Covid relief pandemic bill increases the maximum Pell Grant award. Additionally, more students are eligible to get federal aid to attend college. These changes to higher education will help students of color, individuals from low-income backgrounds, and many more who previously could get financial assistance to attend college.