The CARES Act and What It Means for AFI Fellows and Alumni
On March 27, the Coronavirus Aid, Relief and Economic Security “CARES” Act was signed into legislation in order to offset the economic hardships brought on by the coronavirus pandemic. Below are a few key provisions that we hope will be beneficial to AFI Fellows and Alumni:
A Pandemic Unemployment Assistance program that will last through December 31, 2020 will cover individuals not traditionally eligible for unemployment benefits, including those who are self-employed, independent contractors, freelance workers, part-time employment seekers and more. See if you qualify and check your state’s unemployment office to file a claim.
-A payment of $600 per week to each individual who receives unemployment insurance or Pandemic Unemployment Assistance for up to four months.
-Thirteen weeks of unemployment compensation to help those who remain unemployed after state unemployment benefits have been exhausted.
-A $1,200 one-time rebate for all individuals making up to $75,000. Married couples who file a joint return and make up to $150,000 will receive $2,400. In addition, families are eligible for an additional $500 per child.
-Early withdrawal fees from qualified retirement accounts will be waived for sums up to $100,000 for coronavirus-related purposes made on or after January 1, 2020.
The stimulus bill also provides temporary relief for renters – which account for almost 60% of all Los Angeles residents. It instates an eviction moratorium for 120 days across the country that includes renters whose landlords have mortgages backed or owned by Fannie Mae, Freddie Mac and other federal entities. Landlords also can’t charge any fees or penalties for nonpayment of rent.
The New York Times recently published an article addressing common questions about the new law, including how it affects student loans. Here are a few excerpts from the article:
The federal government has already waived two months of payments and interest for many federal student loan borrowers. Is there a bigger break now with the new bill?
Yes. Until Sept. 30, there will be automatic payment suspensions for any student loan held by the federal government. It is hard to contact many of the loan servicers right now, so check your account online in the coming weeks. Once you are logged in, look for the current amount due. There, you should be able to see if the servicer has reset its billing systems so that you are showing no payment due.
How do I know if my loan is eligible?
If you’ve borrowed money from the federal government — a so-called direct loan — in the past 10 years, you’re definitely eligible. According to the Institute for College Access & Success, 90 percent of loans (in dollar terms) will be eligible.
Older Federal Family Educational Loans (F.F.E.L.) that the U.S. 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. The holders of all those kinds of loans may be offering their own assistance programs.
Within a few weeks, you are supposed to receive notice indicating what has happened with your federal loans. You can choose to keep paying down your principal if you want. Then, after Aug. 1, you should get multiple notices letting you know about the cessation of the suspension period and that you may be eligible to enroll in an income-driven repayment plan.
Will my loan servicer charge me interest during the six-month period?
The bill says that interest “shall not accrue” on the loan during the suspension period.
At the end of the suspension, keep a close eye on what your loan servicer does (or does not do) to put you back into your previous repayment mode. Servicer errors are common.