IOWA CITY — Among the trillions federal lawmakers have approved to speed relief from the novel coronavirus is billions meant for educational institutions, including colleges and universities.
It’s estimated Iowa’s public universities and community colleges will get $36 million from the federal Coronavirus Aid, Relief, and Economic Security — or CARES — Act, according to an analysis by the American Council on Education.
Iowa State University is due the biggest payout — $22.9 million — as three-quarters of the funding is based on an institution’s percent of enrolled Pell Grant recipients — those with exceptional financial need — and ISU has more in that category than other public institutions in Iowa.
The University of Iowa is slated to receive $16.6 million, and the University of Northern Iowa is due nearly $8.2 million, according to the national council and a report from Iowa’s Legislative Services Agency.
Although must of the federal government’s coronavirus relief is geared toward helping individual taxpayers, small business owners and larger corporations, the CARES Act includes $30.8 billion for an “Education Stabilization Fund” to be split between K-12 and postsecondary institutions.
The higher education share is about $14 billion — allocated largely based on university Pell Grant recipients, with one-quarter of the funding allocated for non-Pell students.
Students exclusively enrolled in online education before the coronavirus outbreak are excluded from the funding calculation, according to the Legislative Services Agency.
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Each college and university must use at least half of the CARES Act money they receive “to provide direct emergency aid to students, including ‘grants to students for food, housing, course materials, technology, health care, and child care.’ ”
Those institutions also must retain employees “to the maximum extent practicable.”
A small portion of the funding was reserved for institutions serving minorities and those hardest-hit by COVID-19.
Although Pell Grant numbers for the current academic year weren’t immediately available Thursday, Iowa State reported 6,425 undergraduate Pell recipients in the 2017-18 academic year; UI reported 4,812 that year; and UNI reported 2,745.
The Iowa community college due the biggest chunk from the CARES Act is Des Moines Area Community College at $7.2 million, with Kirkwood Community College at nearly $6 million.
In addition to the help the CARES Act is giving educational institutions, it also suspends payments on federal student loans through Sept. 30.
Iowa College Aid put out the following guidance for student borrowers:
Not all loans qualify. The suspension mandated in the CARES Act only applies to loans held by the U.S. Department of Education. It does not cover FFELP (Federal Family Education Loan Program) loans or Perkins loans held by private lenders, nor does it cover private loans.
If you don’t know who your loan servicer is, you can look it up at Federal Student Aid, studentaid.gov/fsa-id/sign-in/landing.
If your loan does qualify, you don’t need to do anything. Your payments will automatically stop from March 13 through September 30.
Interest is suspended, too. No interest will accrue on your loan until Sept. 30, so your outstanding loan balance won’t grow while your payments are suspended.
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So is collection on defaulted loans. If you’re in default, your wages will not be garnished until Sept. 30.
You can still pay if you want to. If you choose to continue paying off your loans during the suspension, your monthly payments will be the same as before the suspension.
You won’t lose eligibility for loan forgiveness. If you’re in a public service loan forgiveness program or an income-driven plan that requires a certain number of consecutive payments, this period of suspension will not count as an interruption.
You will still be responsible for your loan. After Sept. 30, you will be responsible for paying on your loan once again. The amount will not be reduced.
If you’re an employer, you can contribute up to $5,250 toward each worker’s student debt through Dec. 31 on a tax-free basis.
Student loan suspension is subject to change. Find recent news and current updates at Federal Student Aid, studentaid.gov/announcements-events/coronavirus.
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