CARES Act: Education Provisions

CARES Act: Education Provisions

briefing by John Robinson and Genie Petrangeli

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed into law on March 27th contains several provisions related to education.  The following are some highlights of the “COVID-19 Pandemic Education Relief Act of 2020” included in the CARES Act.

For Federal Family Education Loans and William D. Ford Federal Direct Loans held by the Department of Education, the following relief is provided:

  • Payments are suspended through September 30, 2020;
  • During the period payments are suspended, interest will NOT accrue;
  • During the period payments are suspended, for purposes of any loan forgiveness program or loan rehabilitation program for which the borrower would otherwise have qualified, payments will be deemed to have been made for each month;
  • For purposes of reporting to consumer reporting agencies, each payment that has been suspended is treated as if it were a regularly scheduled payment made by the borrower;
  • Involuntary collection efforts will be suspended during the period for which payments are suspended; and
  • Borrowers will be notified within 15 days of the enactment of this Act that payments have been suspended; and borrowers will be notified beginning August 1, 2020 regarding when their repayment obligations will resume.

Students on Work-Study Programs may be eligible to receive payments even if they are unable to fulfill their work-study obligation for all or part of an academic year.

Students receiving subsidized loans or Pell Grants may be eligible to have semesters that they were unable to complete due to a qualifying emergency excluded from their period of enrollment.

Students who have to withdraw from an institute of higher learning for a particular payment period as a result of a qualifying emergency and who borrowed under the William D. Ford Federal Direct Loan Program may have their obligation to repay for that payment period cancelled.

For teachers working to satisfy the requirements of TEACH Grants, during a qualifying emergency, the Secretary of Education may modify categories of extenuating circumstances under which a grant recipient unable to fulfill all or part of their service obligation may be excused from fulfilling that portion of their service obligation, and will consider teaching service that, as a result of a qualifying emergency is part-time or temporarily interrupted, to be full-time service and to fulfill service obligations.

For teachers working to satisfy the requirements of teacher loan forgiveness, the Secretary of Education will waive the requirements that years of teaching be consecutive if the teaching service of the borrower is temporarily interrupted due to a qualifying emergency, and after the interruption, the borrower resumes teaching service and completes a total of 5 years of qualifying teaching service performed before, during, and after such qualifying emergency.

We would love to talk with you if you have any questions about how these provisions might apply to your particular situation.

John Robinson

John M. Robinson Tax Principal, CPA

John is a tax principal and has worked at BRC since 2001. He is responsible for providing tax compliance and consulting services to a wide variety of clients. His primary industry experience includes individuals, manufacturing, retail and wholesale, and not-for-profit organizations. Education Appalachian State University – Bachelor of Science in Business Administration, Concentration in Accounting […]

Genie Petrangeli updated headshot-cropped 4 x 6

Genie Petrangeli Partner, CPA

Genie is a tax partner specializing in estate, gift and trust taxation, and individual tax compliance and planning. Prior to joining BRC in 2000, Genie worked at a public accounting firm in the Philadelphia area. Genie’s areas of specialties include estate, trust and gift taxation, individual tax planning and compliance, and providing tax and […]