April 7, 2020

2020 Capitol Report - Coronavirus Aid, Relief, and Economic Security (CARES) Act

by Josh Stephens
The United States Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act on Friday, March 27. President Trump signed the omnibus relief package the same day, enacting a $2 trillion funding package intended to provide payments to U.S. citizens. The act also includes forgivable loans for small businesses, loans that require repayment for large corporations, funding to bolster public health, and funding for state and local governments, among several other provisions. The following summary covers major provisions of the act that most profoundly impact educators and K-12 public education.
Impact on Individuals

Cash Payments

Most U.S. residents earning less than $75,000 will receive a $1,200 one-time cash payment from the federal government. Married couples earning less than $150,000 will receive a $2,400 cash payment. Families will receive a one-time cash payment of $500 per child. For individuals earning more than $75,000, the payment will be reduced by $5 for every $100 of income that exceeds the limits. Individuals earning $99,000 or more and couples earning $198,000 or more will receive no payment.

Payments are based on either 2018 or 2019 tax filings. Citizens who do not file a tax return and receive Social Security benefits are also eligible for the cash payments.

Student Loan Relief

The CARES Act includes a provision that suspends through Sept. 2, 2020, payments for individuals who have direct loans or Federal Family Education Loans (FFEL) held by the federal government. Loans held by commercial lenders or individuals receiving federal Perkins loans are not eligible for suspended payments. It is important to note that suspended payments are not being paid by the federal government. The repayment term for any suspended loans will be extended for the duration of the suspension period.
Interest will not accrue while loans are suspended, and any payments suspended during this period will continue to count towards Public Service Loan Forgiveness payments and income-driven repayment plans. Suspended payments will be reported to credit bureaus as on-time payments. Involuntary collections on direct loans and FFEL loans are also suspended.

Healthcare and COVID-19 Testing

The CARES Act expands insurance coverage for COVID-19 testing to not only FDA-approved COVID-19 testing, but also for testing that is pending FDA approval. Private insurance plans must cover the cost of testing without deductibles, copayments, or coinsurance. The act also includes insurance coverage for some services and vaccines intended to help prevent or mitigate COVID-19. Individuals insured by Medicare Part B can receive COVID-19 testing at no cost. Uninsured individuals may receive free COVID-19 testing under any state Medicaid program that elects to offer this option.

Medicare prescription drug plans and Medicare Advantage Part D plans are required to allow up to a 90-day supply of prescription drugs while the COVID-19 emergency is in effect.
Impact on K-12 Education

The CARES Act provides direct funding to states for both higher education and K-12 education in the form of a $30.75 billion Education Stabilization Fund. The CARES Act does not include additional funding that would provide expanded broadband internet access and internet-connected devices to students.
Elementary and Secondary School Emergency Relief Fund
More than $13 billion of the Education Stabilization Fund is allocated to state education agencies as part of the Elementary and Secondary School Emergency Relief Fund (ESSERF). The amount each state receives is based on the state’s share of Elementary and Secondary Education Act (ESEA) Title I funding. According to the Congressional Research Service , Georgia stands to receive $457.2 million from this fund.

State departments of education are required to disperse 90 percent of these funds to school districts and charter schools based on each district or charter school’s Title I funding. Funds can be used by schools for any provision included in ESEA as well as a long list of other provisions in direct response to the coronavirus outbreak (e.g., continuing to employ staff, providing mental health services and support, purchasing supplies to clean and sanitize schools, and providing meals to students, among several other uses). State departments of education have further flexibility with the remaining 10 percent of funds awarded in the (ESSERF) in direct response to the impact of coronavirus. Only one-half of a percent of the fund may be used for administrative costs for state departments of education.
CLICK HERE for an in-depth review by Johns Hopkins University regarding how Education Stabilization funds are allocated to states and local school districts and how the funds can be used.
Governor’s Emergency Education Relief Fund
A total of $2.95 billion has been allocated to governors in each state to be directed to school systems hardest hit by coronavirus. Georgia stands to receive an estimated $105.5 million according to the Congressional Research Service . Sixty percent of this allocation is based on the number of citizens age 5 to 24 in each state and 40 percent is based on the number of students in each state’s Title I schools. Georgia Gov. Brian Kemp will have flexibility to use these funds for services allowed by ESSERF.
Waivers from the United States Department of Education (USED)
The CARES Act provides U.S. Department of Education Secretary Betsy DeVos the authority to grant expedited emergency waivers to states for assessment and accountability provisions in the Every Student Succeeds Act (ESSA). DeVos has already approved waivers for most states, including Georgia, with authority that is included in ESSA. The CARES Act does not allow DeVos to waive civil rights laws.
CLICK HERE to read more about Georgia’s recently approved assessment and accountability waivers.
The act also allows DeVos to waive certain fiscal requirements related to federal education funds in order to provide financial flexibility for states to continue educating students under the unique circumstances created by the coronavirus pandemic. The act includes a request that, within 30 days, DeVos compile any other recommendations of additional waivers of education laws required to address the coronavirus outbreak’s impact on schools, including the Individuals with Disabilities Education Act (IDEA), Rehabilitation Act, Perkins Career and Technical Education (CTE) Act, and any further ESSA waivers.
Claire Suggs
Senior Education Policy Analyst
Josh Stephens
Legislative Affairs Specialist
Margaret Ciccarelli
Director of Legislative Services