Many college students excluded from receiving direct payments from stimulus package

Payments on some student loans are suspended until Sept. 30

President Donald Trump signed a $2 trillion stimulus package March 27 in response to the COVID-19 pandemic. The package will provide direct payments to lower and middle-income individuals, provide higher level education institutions with emergency funds, and temporarily relieve student loan borrowers. College students are ineligible to receive any direct payments.

The bill is intended to aid the US economy in combating the spread of COVID-19. 

Single adults with an adjusted gross income of $75,000 or less will receive the full direct payment amount of $1,200. Married couples with a combined income of $150,000 or less will receive a payment of $2,400. Parents will receive an additional $500 per child under the age of 17. 

The New York Times reported that individuals claimed as dependents, including many college students, are ineligible to receive a payment even if they are 18 or older. Parents who claim full-time students aged 19 to 24 as dependents will not receive the additional $500 payments. 

The stimulus bill will also bring relief to many student-loan borrowers. Payments and interest accrual on federal Direct Loans and Federal Family Education Loans held by the Department of Education will be suspended until Sept. 30. 

The bill also allocates $14 billion to higher education in the Emergency Stabilization Fund. $12.5 billion will be allocated to institutions based partially on the enrollment of full-time equivalent (FTE) Pell Grant recipients and partially on enrollment of FTE non-Pell Grant recipients.

Half of the $14 billion must go directly to students for expenses related to the disruption of campus operations to be used for expenses included under a student’s cost of attendance (including food, housing, course materials, technology, health care, and child care). 

Remaining emergency funds not given to students may be used to alleviate other incurred institution expenses including lost revenue, technology expenses associated with transitioning to online education, training for faculty, and payroll.