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How the Covid-19 Relief Bill Helps Students


The most recent Covid-19 relief bill includes a lot of money for a wide variety of purposes designed to improve the economy now and in the future. To that end, it includes an allocation of $40 million for boosting higher education and offers student loan forgiveness for current and past college enrollees. The American Rescue Plan offers substantial help to struggling students.

All Students Now Eligible for Stimulus Payments

Instead of giving parents a stimulus check for only dependents under the age of 17, the new Covid-19 relief package extends it to all college students. However, unless you are an independent and not claimed on anyone else's taxes, the money will go to the parents or guardian instead of you directly. The opportunity for help with college expenses has improved but is ultimately up to the family to decide how to use the funds.

Help to Apply Using FAFSA

Part of the recent stimulus package focuses on getting more high school students and current college enrollees to use the Free Application for Federal Student Aid (FAFSA). As little as 43 percent of graduating high schoolers have filled this out in 2021. The goal of this part of the bill focuses on direct outreach about the opportunities available to students.

Increased Funds for Available Financial Aid

Besides help to apply for financial aid, the American Rescue Plan requires 50 percent or more of money given to colleges and universities to be handed out to incoming students. This will increase the available funds considerably for some institutions. In a time when student enrollment is going down and more families struggle with unemployment and loss of wages, the extra funding can make a huge difference. Speak with your college or university directly to learn about increased opportunities for aid.

Student Loan Forgiveness and Relief

At present, a payment deferral moratorium exists for everyone who has federal student loans. This, however, currently ends on September 30. Even for families enrolled in income-driven repayment plans, the changing financial situations associated with the pandemic may make it virtually impossible to stay current with these loans. To help, the new bill removes the tax bills on outstanding student loan debt after a lengthy repayment period. While this does not help new students with financial aid, it absolutely affects former students' financial realities.

Improved Tax Credits for Parents

Adult students who have children and parents who pay for their college students' tuition and living expenses get extra help from increased tax credits. They have gone up to $3,000 annually for children up to the age of 17. While this is more focused on the parents' economic well-being, it may affect younger college freshmen and families who contribute to advanced education. 

The current Covid-19 relief bill helps students in a variety of meaningful ways. A dedication to providing more access to financial aid and the forgiveness of existing loans will affect many students' ability to advance their education at all. During these difficult times when college enrollment is down and the job market struggles, assistance with paying for advanced education makes sense for the entire economy.