What the CARES Act Means for FSU and its Students

“I’m not counted as a real person.”

Later this week, the Internal Revenue Service will begin distributing the economic impact payments allocated under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The bill is intended to speed relief across the American economy as unemployment claims soar over 10 million since March 15, 2020.

In addition to providing relief to small businesses, state and local governments, and large corporations, the CARES Act will offer one-time direct cash payments to most individuals earning less than $75,000 per year. Families with children under 17 will also receive a $500 payment.

One notable demographic excluded from these payments are adult dependents, specifically college students.

Maya Wallace, a Frostburg student, hopes to change this with a petition she started urging Congress and President Trump to offer financial relief to those aged 18-24. In her petition she writes that college students “have been suddenly displaced from their housing, forced into online education, some have lost their source of income, and some still hold financial responsibilities such as rent.”

Wallace finds herself in the situation she describes in her petition.

“At school, I was a resident assistant and my room and board were covered,” she says. Now having moved home she says her family “now might see an increase in household expenses that they were not seeing before.”

Wallace also held a job on campus and is unemployed as a result of COVID-19 precautionary measures.

“It has been an enormous transition and our families have taken on additional responsibilities during this COVID-19 pandemic. I believe 18-24-year-old dependents should be included in the stimulus package,” Wallace says.

Senior Deion Okonkwo agrees with Wallace.

“My fellow college students who depended on a campus job for income no longer have that option,” he says. “Though I haven’t suffered personally, my peers have and still are. That is the motivation behind our petition.”

Okonkwo says his family members have not lost their jobs and are considered essential.

Nonetheless, he says the CARES Act “unjustly shuts off an entire demographic that has been adversely affected by this pandemic.” He cites the petition as just one way to communicate his dissatisfaction. “We as college students have a voice in this nation and we should stand up against a government that feels a need to look out for everyone’s interest except its very future,” says Okonkwo.

Okonkwo has been impacted by COVID-19 measures in one way, however. “I live on-campus as a resident in Westminster. I was unable to collect my belongings from the school due to the recent shutdown of the State of Maryland.”

A third student, who prefers to remain anonymous, wrote TBL in support of Wallace’s petition.

She says, “my mother is a single mother and now because of the current state of the economy, my mom got laid off because she is not an essential worker.” The student says that she lives off-campus in Frostburg because her extended family in Florida cannot financially support her. “This has affected my ability to pay for essentials such as groceries, WiFi, and electricity. My lease also ends in May and so my mom must drive from Florida to pick me up. Assuming the virus is still around, I’m not even sure I’ll be able to do that,” she says.

Exclusion from the CARES Act makes her feel “like I’m not a counted as a real person” and sees the situation as “extremely unfair” to her mother.

Provisions for Frostburg State University and other institutions

The CARES Act, while excluding adult dependents from direct stimulus checks, does include assistance for students, student loan borrowers, and colleges and universities in different ways.

First, the bill provides over $30 billion to an “Education Stabilization Fund.”

The Institute for College Access and Success breaks this $30 billion down to smaller pots of money. Pot One, they say, provides $3 billion to governors to distribute to agencies and institutions across K-12 and higher education to support ongoing functionality and ability to deliver education.

Pot Two provides over $14 billion in direct payments to colleges and universities. Three-quarters of this fund will be distributed based on an institution’s enrollment of Pell grant recipients. The other one-quarter will be based on enrollment numbers of full-time-equivalent students, Pell recipients or not.

For reference, for FY 2020, FSU reports that 37% of their students are Pell grant recipients. The USM campus with the smallest percentage of Pell grant enrollment by student population is the University of Maryland College Park at 19.2%, and the campus with the largest percentage of Pell grant enrollment is Coppin State University at 61.3%, according to the Maryland Higher Education Commission 2020 Data Book. 

Of these funds, at least one half of the amount received by institutions must provide emergency financial grants to students for expenses related to the disruption of campus operations, including for costs such as food, housing, health care, technology, and child care.

$1 billion of these funds are reserved specifically for Historically Black Colleges & Universities and other Minority-Service Institutions.

For student loan borrowers, the CARES Act suspends all involuntary collections of defaulted student loans, including wage garnishments and tax refund offsets. The bill guarantees that loan interest will not accrue until after September 30, 2020, for most direct federal loans. However, excluded from the bill are campus-based Perkins loans, commercial loans, and private education loans. The excluded loans make up approximately 29% of all loans in the federal loan portfolio. Therefore, each student should evaluate their own loans before assuming they are covered by this provision.

The CARES Act also gives flexibility to colleges and universities in providing emergency aid to their students. Previously, institutions were required to match federal dollars for campus-based aid programs. As a result of the bill, schools can now use Supplemental Educational Opportunity Grants to support students, as well as issue work-study payments to students who are unable to work during this period of time.

FSU students who hold on-campus State and Federal work-study jobs were notified on March 24 by Payroll Manager Amy Nightengale that “in accordance with USM guidance for students no longer able to work, Payroll and Employee Services will automatically pay the student employee based on the average number of hours they worked to date for the Spring Semester for each individual contract.” However, payments will cease when the full amount of the contract has been paid or the expiration date has been reached.

In his April 3 email, FSU President Ronald H. Nowaczyk acknowledged the CARES Act and said that FSU is waiting on federal guidance “to determine what form of assistance may become available and how the University of individuals should apply for it.”

Nowaczyk’s holding pattern is consistent with how his peers across the nation are operating.

Terry Hartle, the American Council on Education’s senior vice president for government and public affairs, said during a webinar on March 31, “we are deeply worried that the institutions’ money won’t go out, in the best-case scenario, for a month, and in the worst-case scenario for several months.”

The reason for this, says Hartle, is because the calculations required to disperse the funds as written in the bill have not yet been formulated.

“Most of the money will go out through a formula that doesn’t exist,” she said, “The Department of Education will have to create it, and that will slow them down.”

Inside Higher Ed’s Kery Murakami reported that the National Governors Association wrote U.S. Secretary of Education Betsy DeVos late last week to ask for speedy distribution of education relief funds. DeVos’ spokeswoman replied to say that “an internal groups of experts is working to create the most efficient process for this, and we look forward to sharing more details with the field in the coming days.”

Murakami’s reporting also includes a state-by-state Education Stabilization Fund breakdown by type. She reports that Maryland K-12 schools will receive $199,200,000, that colleges and universities will receive $201,600,000, and that the Governor’s emergency education relief grants will amount to $44,000,000 for the State of Maryland.

Additional steps taken by Frostburg State University

Nowaczyk’s April 3rd email, in addition to mentioning the CARES Act, sought to inform the student body of other financial assistance opportunities.

“We are aware that the recent changes to our educational and living situations may have created hardships for many of our students,” he wrote.

One of the resources Nowaczyk suggests is the Student Affairs Crisis Emergency Fund which TBL previously reported on. Students in need are able to access the application for this fund here, and donors can make contributions here. The seven-member committee began reviewing applications for this fund on Monday, April 6 and will continue to on a rolling basis.

Other support was offered by Nowaczyk in the way of scholarships and the PAWS Pantry.

As of press time, information related to the previously announced reimbursement of student fees, including room and board, has not yet been provided to FSU students. TBL previously reported that refunds have already been dispersed at other USM campuses.

It is unclear when FSU students will start to receive financial relief from the CARES Act, whether it be in the form of a stimulus relief check or emergency funds from our campus.

Until then, Maya Wallace reminds, “we are all affected by this global pandemic. We have to stand up for what is right.”