Breaking Down Bills with Alex McCoy: H.R.748 – Coronavirus Aid, Relief, and Economic Security Act (CARES) Act
No doubt you’ve heard of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, sometimes referred to as Trump’s two trillion dollar “economic stimulus” package. Public awareness of this bill has dramatically increased because of media coverage of the recovery rebates for individuals, a.k.a., the infamous $1,200 checks. But individual rebates are only a sliver of the CARES act, which includes over 150 sections attempting to address key issues exacerbated by the COVID-19 pandemic such as unemployment, food security, and the shortage of medical supplies. In this segment of Breaking Down Bills, I’ll highlight some of the provisions within the CARES act and discuss their implications, with a focus on those which will impact graduate students the most.
I could use $1,200 right about now
You’d be hard-pressed to find a graduate student who isn’t strapped for cash, so understanding how the rebates are calculated and how much assistance you can expect is essential for budgeting. $1,200 is the figure that keeps popping up everywhere, but is it always $1,200? And does everyone get that? The short answer is no. Nonresident aliens are not eligible for this assistance, and the individual rebates are determined by things like income, marital status, and how many kids you have. Your income used for this calculation is from your 2019 taxes. Haven’t filed yet? That’s ok, in that case your 2018 taxes will be used. To calculate your rebate:
- If you filed as single, your basic rate is $1,200.
- If you filed a joint return, you and your spouse’s basic rate is $2,400.
- For children under 17 years old claimed as a dependent, you get an additional $500/child.
How does income play a role in this? Essentially, if you made more money, you will get less assistance. The official wording is that the rebate will be reduced by 5 percent of the taxpayer’s income which exceeds–
- $75,000 (if you filed as single)
- $112,500 (if you filed as head of household)
- $150,000 (if you filed jointly)
For a quick example: Suppose you filed as single and have no children and made $80,000 last year. You made $5,000 over the $75,000 cutoff, so 5 percent of that $5,000 will be deducted from your check. 5 percent of $5,000 is $250, so your check would be $950 dollars ($1,200-$250=$950). If you made $99,000 or more last year, lucky you! You made so much money that you no longer qualify for assistance.
Did you know that your employer can pay your student loans? Under IRS tax code 127, employers can contribute up to $5,250 of your paycheck to student loan repayment. The benefit of this being that the employee would not have to include that money as income, so those dollars aren’t taxed. This saves you money!
Section 2206 of the CARES act amends this to allow for these types of tax-free payments to be made to lenders or to employees until January of 2021. So, as an employee with student loan debt, you still get up to $5,250 in tax deductions, but you don’t necessarily have to put that money towards paying off student loans anymore.That means you get to claim the tax deduction without spending the money on paying your loans.In addition to this, the CARES act mandates that federal student loan payments be deferred through September 30, 2020 without penalty and with no interest accrued. Loans from private lenders, however, will not be covered under this provision.
Education Stabilization Fund
A grand total of $30.75 billion dollars has been allotted towards an education stabilization fund to support continued education during and after the COVID-19 pandemic. These funds are divided into two pools. Pool 1 (approx. three billion) is given to governors to distribute to educational institutions as they see fit, with an emphasis on places “most severely impacted by coronavirus.” Pool 2 provides direct funding to schools/education agencies. Here’s the breakdown:
- 5 billion to K-12 (43.9%)
- 25 billion to institutions of higher education (46.3%)
- 83 billion to universities based on enrollment of Pell students (90%)
- 7 billion to Historically Black Colleges and Universities (HBCUs) and Minority Serving Institutions (MSIs) (7.5%)
- 25 million to institutions with unmet needs related to coronavirus (2.5%)
- 555 million to U.S. outlying areas, the Bureau of Indian Education (BIE), and states with the highest coronavirus burden (2%)
- 5 million to burdened states (50%)
- 75 million to BIE (25%)
- 75 million to outlying areas (25%)
It is required that at least half of whatever an educational institution receives from this fund is used for emergency financial aid grants to students to cover expenses incurred due to COVID-19-related disruption (this includes things like food, health care, childcare, and housing). You can contact your institution’s financial aid department to learn more about how you could receive assistance.
It’s important to be familiar and up to date with new laws and to scrutinize them. Especially when they are bundled like the CARES act (or summarized by a non-expert like me).With over 150 sections, it’s easy to miss one or two laws that could be highly impactful.
For example, the Human Services and Other Programs section (which includes things like addressing health profession workforce needs and temporary assistance for needy families) also includes, under section 3821, the renewal of the sexual risk avoidance educational program.
This program gives states education grants to “implement education exclusively on sexual risk avoidance (meaning voluntarily refraining from sexual activity).” This program lays out areas of emphasis for sexual education, mandating that topics such as healthy decision making, avoiding dating violence, and “the advantage of refraining from nonmarital sex” be covered. Contraception is not included in the required topics of discussion; however, it is addressed within this text with only two requirements:
- A) any information provided on contraception is medically accurate and complete and ensures that students understand that contraception offers physical risk reduction, but not risk elimination; and
- (B) the education does not include demonstrations, simulations, or distribution of contraceptive devices.
Regardless of your opinion on contraception or abstinence-based sexual education in America, I want to make the point that a law which has seemingly little to do with the COVID-19 pandemic has been repackaged and resurrected under one of over 150 sections of the CARES Act, and this is surely not a unique event in congress. Therefore, I urge everyone to read bills, know your lawmakers, and vote.
H.R. 748, CARES Act Bill, Congress.gov
What’s Inside the Senate’s 2 Trillion Coronavirus Aid Package, NPR
Educational Assistance Programs, House of Representatives
What’s In the CARES Act, The Institute for College Access and Success
Sexual Risk Avoidance Education, House of Representatives
About the Author
Alex McCoy is a student in the Neuroscience discipline of the Integrated Biomedical Sciences Ph.D. program. She is currently in the lab of Dr. Alan Frazer where she is working on using ketamine as a novel antidepressant. She is passionate about science policy. To read an article about her, check out “Alex McCoy: We Need To Create Better Antidepressants.”