College students could be leaving up to $5,000 in coronavirus stimulus money on the table
Billions of dollars in incentives for America's college students affected by the Coronavirus shutdown remain largely unused.
The $ 2 trillion aid package approved by Congress earlier this year raised up to $ 7 billion specifically for students. By the end of April, however, only 1% had actually been distributed, also because the students may not have known they were eligible.
Postponement, forbearance, cancellation and delays in student loans: the complete breakdown
To fix this problem, startup Frank recently partnered with educational giant Chegg to simplify the application process with a new online tool. According to Frank CEO Charlie Javice, the new portal was immediately hit by unprecedented demand.
"We submitted over 10,000 applications in about 10 hours," she told Yahoo Finance's YFi PM. "Students could be eligible for assistance between $ 500 and $ 5,000."
The rules for distributing aid, known as HEERF (Higher Education Emergency Relief Fund), have changed since the program was launched. A judge recently blocked earlier Ministry of Education guidelines that attempted to limit eligibility to Title IV students who received financial support. Universities now have more leeway to distribute aid and, in some cases, have given priority to students who have applied for an FAFSA or federal student loan, although this is no longer required to receive help.
"There are different eligibility requirements," said Javice, adding that to maximize direct help, students may need to show evidence of job loss, reduced hours, or eligible food or travel expenses related to coronavirus problems. In addition, much of the responsibility lies with universities to inform students about the help and to distribute it to needy students - something that universities have so far largely failed to do, said Javice.
(Jordan Strauss / AP pictures for the University of California, Irvine)
“Overall, our universities and the Ministry of Education didn't really help the students. You really confused her, ”she said. "If anything, it's probably just as backward and worse than the [Small Business Administration paycheck protection program] that we've personally seen and experienced as a company."
While the SBA program encountered funding problems and had to be reimbursed by Congress after companies quickly applied for grants, it appears that the Higher Education Relief Fund is suffering from the opposite problem, at least for the time being. However, as Javice explains, eligibility for eligible students is similarly based on the "first come, first served" principle.
In particular, some schools have rejected grants awarded under the Coronavirus Aid, Relief and Economic Security (CARES) Act. For example, Harvard University announced it would not accept HEERF funding after the school came under fire after attacks by President Trump, who wrongly claimed that the school was seeking aid. The school released a statement denying it has applied for or applied for funding, but said it would proactively reject the funds allocated by the Ministry of Education. Several other larger institutions followed suit, promising that students would still be paid as a whole for similar expenses related to corona viruses.
Zack Guzman is the moderator of YFi PM and a senior author and on-air reporter who reports on entrepreneurship, cannabis, startups and the latest news at Yahoo Finance. Follow him on Twitter @zGuz.
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