Student Loan debt forgiveness Flexibility and new dollars for education will require fast and strategic action.
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The coronavirus relief package offers new dollars for K-12 schools and a student loan moratorium, but this only applies to loans held by the federal government.

The Coronavirus Aid, Relief, and Economic Security Act or the CARES Act is infusing into the economy an unprecedented $2.2 trillion to support individuals and businesses during the COVID-19 pandemic crisis. While most of the focus has been on the $1200 stimulus checks for individuals, the CARES Act includes provisions to support K-12 and higher education systems through the pandemic, including additional resources for Title I schools and student loan relief. 

With the dramatic increase in unemployment in recent weeks, college students and graduates are looking to manage their fixed expenses such as student loans. The CARES Act calls for the suspension of student loan payments for six months, from March 13 through September 30 of this year. This is welcome news for the 1 in 2 Hispanic full-time full-year undergraduate college students who borrow an average of $10,270 a year. 

The Fine Print on Student Loans

During the period between March 13 and September 30, 0% interest is being accrued on student loans and holders can continue to pay toward the principal if they are able to. These benefits are also available to people who are in default of their student loans, who will see automated collections stopped during this period. 

However, it is very important to understand that this only applies to loans held by the federal government including direct loans, Federal Family Education Loans, or Federal Perkins Loans. These benefits do not apply to loans held by entities other than the federal government such as colleges or private banks. Student loan holders should contact their loan servicer to verify if their loan is eligible and proactively seek updates from the U.S. Department of Education to avoid accidentally becoming delinquent or in default in their student loan payments.

COVID-19 and K-12 Funds

On the K-12 side of education, school districts will see the majority of the funds from the CARES Act, an estimated $13 billion, distributed based on their Title I allocations. Title I funds are federal programs that fund school districts with a high percentage of students from low-income families. 

The largest racial/ethnic group of students that benefit from Title I funding are Hispanics, accounting for 37% of the children in Title I schools. These new funds can be used to maintain current Title I supported programs through the crisis but they can also be used to address new needs that have resulted from COVID-19-caused school closures and the rise of virtual learning as a primary mode of connecting with students and families. 


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Latino families may be interested to learn that these new CARES Act Title I funds can be used to increase access to technology for virtual learning, provide resources for English learners, innovate and provide supports for special education, address school sanitation needs, and provide psychological services to address the stress and trauma created by the pandemic. 

Education leaders and advocates should note that this is a short-term opportunity and that funds that are not used within the year will need to be returned to the federal government. 

In addition to new funds available through the CARES Act, the U.S. Department of Education announced on April 6 additional flexibility to states to repurpose current education funds to address technology and virtual learning among other needs that have emerged as a result of the COVID-19 national emergency.

The opportunity to take advantage of the flexibility and new dollars will require fast and strategic action, a challenge in and of itself considering how taxed students and educators are just focusing on the immediate needs.

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