The CARES Act can suspend payment interests for existing student loans, but cancellation is out of the picture.
CARES Act assistance package
CARES Act is the biggest among the four legislative financial aid packages passed in Congress in response to the COVID-19 crisis. Representatives behind this legislation were hoping that the largest financial aid surmounting to more than two trillion dollars can include the cancellation of existing student debts.
Unfortunately, Congress denied the notion and only allowed a suspension of accumulating interest fees for all existing student debts up until the end of September 2020.
Contents of the CARES Act package are subdivided into different sectors, namely:
- Assistance for Workers and Families
American households with an annual income of less than $99,000(single) and $198,000(married couples) are entitled to cash assistance of $1,200 per adult and $500 for minors in a household.
- Assistance for small businesses
Small businesses will be able to claim a financial aid package amounting to eight weeks of payroll with benefits. The financial aid can be used to pay off building rental and other business utilities.
Small businesses include the self-employed and independent contractors, as long as their businesses are listed on the Small Business Act.
- Assistance for State and Local Governments
$150 billion shall be allocated to help out state and local governments in dealing with local issues concerning the COVID-19 crisis.
- Preserving Jobs
The CARES Act will help out businesses on retaining their employees during the COVID-19 crisis. The financial aid package will shoulder a 50% credit of up to $10,000 of the wages paid from March 13 to December 31.
- Tax deferral. Payment of taxes can be deferred for up to two years, with an understanding that half of the deferred amount should be completed within 2021, and the other half shall be fully complied by 2022.
- Payroll Support
Eligible businesses can also apply for financial assistance to retain employee salaries and benefits amid the COVID-19 crisis.
With the decline in the motion of the cancellation of existing student debts, policymakers are still eyeing on another shot to pass it through Congress in a different legislative bill.
Featured image by AFACWA