CARES Act: Education Provisions for Individuals and Educational Institutions


For employers who provide student loan repayment  benefits to employees, those benefits made following the date of enactment of the legislation through December 31, 2020 can do so on a tax-free basis and will be excluded from the employee’s income.  The annual $5,250 benefit cap includes educational assistance such as tuition, fees, and books.

Pell Grants:

  • The Secretary shall exclude from a student’s Federal Pell Grant duration limit any semester that the student does not complete due to COVID-19. If a student drops out of school as a result of COVID-19, the term will be excluded from counting toward lifetime Pell eligibility.

Temporary Relief for Federal Student Loan Borrowers:

  • Suspends all payments due for loans made under the Higher Education Act for 6 months, during which interest will not accrue. Payment obligations will resume on October 1, 2020.
  • All collection actions and wage garnishment for borrowers will be halted for a 60-day period, beginning March 13, 2020. 

The Education Stabilization Fund will receive over $30 billion through September 20, 2021, to provide Emergency Relief Grants to educational institutions, local educational agencies, students, and teachers in their response to COVID-19, including:

  • $13.5 billion in formula funding to the Elementary and Secondary School Emergency Fund to make grants available to each state educational agency to facilitate schools’ responses to COVID-19 (e.g., coordination of preparedness and response efforts, activities to mitigate the spread of infectious diseases, planning for long-term closures, purchasing education technology to promote remote learning, etc.).
  • Just over $14 billion to the Higher Education Emergency Relief Fund to provide formula funding to institutions of higher education to cover any costs associated with the closure/significant changes to the delivery of instruction and to provide emergency grants to students for expenses directly related to COVID-19 and the disruption of campus operations.
  • $3 billion to the Governor’s Emergency Education Relief Fund to provide flexible funding to be allocated by states based on the needs of elementary schools, secondary schools, and institutions of higher education that have been affected by COVID-19.

The CARES Act grants $100 million through September 30, 2021, to supplement funds otherwise available for the Department of Education’s Project SERV to help clean and disinfect affected schools and assist in counseling and distance learning.

The provisions provided on this webpage are not legal advice.  For specific legal advice related to the CARES Act, contact Jonathan Osborne.