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What the Third COVID-19 Bill Means for Young People

Congress now has passed the third in a series of legislative measures intended to address the public health, medical, and economic crises brought by the COVID-19 pandemic. These crises all have direct effects on young people, many of whom face hardships including loss of wages and work hours, even as they continue to face expenses associated with the basic costs of living.

What does this COVID-19 response bill mean for young people?

Cash Assistance and Expanded Benefits

  • One-time financial relief payment. If you’re an adult earning up to $75,000, you can expect to receive a one-time payment of $1,200; or a $2,400 payment for joint tax filers earning up to $150,000. Plus $500 for every child you have. Payment amounts phase out for incomes up to $99,000. Around 90% of households should benefit from the payment. For greater FAQ’s, click here.
  • Expanded Unemployment Insurance. While the one-time financial relief payments are short-term and immediate, the expansion of unemployment benefits stand to put even more money in some families’ pockets. On top of usual weekly unemployment benefits, young people can see four months of $600 more in benefits. Altogether, an additional $600, on top of those average benefits, would equal roughly 100% wage replacement for average workers — meaning some lower-income workers will get more than their usual wages from this expansion. Also, in most states, laid-off workers can get a maximum of 26 weeks of benefits.
  • Expansion of Supplemental Nutrition Assistance Program (SNAP) benefits. This package increases funding for SNAP programs and an anticipated rise in enrollment; it does not necessarily increase benefit amounts to recipients. The relief package that already passed has suspended work and job-training requirements for SNAP recipients for the duration of the COVID-19 emergency. The earlier bill also provides assistance to low-income families to make up for the loss of free and reduced-price meals for their children resulting from school closures.

Higher Education

  • Suspended student loan payments for six months. Between now and September 30, people with student loan debt will not have to make their monthly payments, and no interest will be added to the total loan amount over this time. It’s important to note this provision only applies to federally-held student loans. If you took out loans from a private lender or bank, you should check with them about your options if you are facing financial hardship. If you are pursuing Public Service Loan Forgiveness or an income-driven repayment plan, the government will count you as paid for these months.
  • No involuntary payments toward loans in default. The bill prevents the federal government from garnishing wages or reducing tax refunds or other benefits payments to go toward payment for loans in default. The bill suspends involuntary payments for six months — four months longer than originally announced by the Education Department. Starting August 1, the Education Department must begin notifying borrowers when their payments will start becoming due again, as well as of their options to enter income-driven repayment plans.
  • Pell grants are protected. Students who had to leave school for reasons tied to COVID-19 will not have to repay a portion of their Pell grants for the shortened academic term, and this term will not count against their lifetime eligibility for a total of 12 terms receiving a Pell grant.
  • Institutions can use emergency funds to support students’ basic needs. Under an emergency grant program, institutions of higher education must use at least half the funds they receive to support students struggling to have enough money to cover basic needs including food, housing, and health and child care.
  • No penalty for making Satisfactory Academic Progress. For students affected by COVID -19, grades this academic term will not affect their federal academic requirements to continue to receive Pell Grants or student loans.
  • Employers encouraged to cover student loan payments. The bill creates an incentive for employers to establish programs to cover employees’ student loan payments. Such payments made on behalf of an employee will be exempt from counting as income for the employee up to $5,250.

Health Care

  • Crucial funding for hospitals and health centers. The bill includes substantial funding for hospitals, health care workers, and states to ensure our health care system can meet the needs of COVID-19 patients. This funding will increase medical supplies including masks, protective gear, and ventilators — and it will help support our health care workers on the front lines.
  • Opportunity for some uninsured people to get covered. While this bill unfortunately did not include an expansion of coverage, 12 states with their own state-based marketplaces have already re-opened to allow uninsured individuals to sign up for a health plan immediately. Those states are: California, Colorado, Connecticut, Maryland, Massachusetts, Minnesota, Nevada, Rhode Island, Vermont, Washington State, and Washington, DC. Also, if you’ve recently lost health coverage because of unemployment, you are eligible to sign up for a health plan no matter what state you live in. To see if you qualify, go to HealthCare.Gov.

This act is historic legislation that still could have provided much more relief to young people. YI remains committed both to informing young people about implications of legislation for their lives and finances, and advocating for their interests during this troubling, uncertain time.

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