April 8, 2020 - COVID-19 U.S. Fed Gvt Relief Bill: What to Expect

UC Berkeley Vice Provost for Graduate Studies and Dean of the Graduate Division, Lisa García Bedolla, and Vice Chancellor for Student Affairs, Stephen C. Sutton, sent the following message to all undergraduate and graduate students 04/08/2020:

 

The U.S. federal government’s $2 trillion relief bill will send checks directly to people, provide relief on many U.S. student loans, and expand unemployment benefits. Below is a summary of publicly available information; for the most detailed and accurate information, please consult the text of the bill. You can learn more about the tax relief and the higher education provisions online.

Relief Checks

In order to provide immediate relief to taxpayers, the Internal Revenue Service (IRS) will send tax rebate checks to individuals and families that have valid Social Security Numbers (SSNs). The legislation calls for $1,200 for individuals and $2,400 for married joint tax filers. The IRS is using 2019 tax returns to determine eligibility or 2018 returns for those who haven't filed for 2019 yet. These rebate checks have income limits in order to ensure that this funding goes to low- and middle-income individuals and families. 

Most single undergraduate students without dependents will not receive a relief check. If your parents or other family members claimed you as a dependent on their tax returns, you will not receive a check. Unfortunately, your parents will also not get a check for you as the $500 per child relief only applies to children under 16 years old.

Students who filed their own tax returns and are considered independent will be eligible for a check. You are considered independent if you are over 24 years old, married or in a registered domestic partnership, have dependents, or are financially independent. Re-entry students, student parents, and many graduate and professional school students are considered independent. Students who receive disability benefits from the Social Security Administration or Veterans Affairs are eligible for the relief check.

If you are a student parent, you will get an additional $500 for each child under 16 years old. A family with two children will no longer be eligible for the $500 per child if the family income surpassed $218,000. Because it is based on your 2019 tax return, if you had a new baby born in 2020, that baby will not be eligible for the $500. If you share custody of your child(ren), whoever claimed the child(ren) on their 2019 tax return will receive the $500 per child.

How to Receive the Check

Because relief eligibility is based on your 2019 tax refund, you will not need to sign up for anything (watch out for scams). If you set up direct deposit when you paid your taxes or received your refund for your federal return, you should see the money arrive automatically in the next few weeks. [[editor's update: The IRS has confirmed that individuals who owed money on their taxes do not have direct deposit information on file with the IRS and need to input their information via the Get My Payment tool.]] If you paid your taxes manually or received your refund by check, you will receive a paper check which could take a few months. Check for updates from the federal government as they have plans to create a website where you can fill out a form to sign up for direct deposit (pay close attention and watch out for scams). [[editor's update: The Get My Payment tool is now available.]]

Financial Aid Details

Relief checks paid to you or your family will not impact your financial aid. The checks will not be counted as income for the calculation of Expected Family Contribution (EFC) or estimated financial assistance (EFA). 

If you received emergency funds from the university, those funds will be coordinated with your existing financial aid package. As with all gift aid, it could count as income when you file your 2020 federal tax return. 

Student Loans Repayment

The vast majority of students aren’t currently repaying their student loans. Most federal student loans begin repayment six months after a student graduates, discontinues school, or drops below half-time enrollment. However, if you do have a student loan you are paying back (may apply to some re-entry or graduate and professional school students or your partner), the relief bill may offer you support.

The U.S. federal government will automatically suspend payments for any student loan held by the federal government until September 30, 2020. This is retroactive to March 13. You do not need to apply; this should be automatic. This should not affect your ability to qualify for loan forgiveness or loan rehabilitation programs. Contact your loan servicer with questions. If you qualify, you will receive a notice within a few weeks. Pay close attention in August and September for when the program ends. 

Eligible loans are known as “direct loans” and about 90% of loans are eligible. Older Federal Family Educational Loans (F.F.E.L.) that the Department of Education does not own are not eligible, nor are Perkins loans, loans from state agencies, or loans from private lenders like Discover, Sallie Mae, and Wells Fargo. If you are not sure what type of loan you have, you can check your account online or contact your loan servicer. 

Expanded Unemployment Benefits

The relief bill also offers additional unemployment benefits on top of California unemployment benefits. Under the plan, eligible workers will get an extra $600 per week on top of the state benefit (standard state benefit ranges from $40 to $450 per week) and an additional 13 weeks of coverage (standard state benefit duration ranges from 12-26 weeks). You will need to apply for unemployment to receive this benefit.

The relief bill covers the types of jobs many students hold including self-employed, part-time and "gig.” It also covers those who have had their hours reduced (partial benefit). 

Finally, if you rely on a school, a daycare or another facility to care for a child, elderly parent or another household member so that you can work (only applies to work, not school), and that facility has been shut down because of coronavirus, you may also be eligible for unemployment benefits. 

While the state is still awaiting specifics from the federal government, you can find current information and frequently asked questions online.  

We hope this provides you some helpful information as you navigate the country’s economic response to this crisis. Stay well, Bears.