New stimulus bill means more money for Roadrunners
Here’s what your students need to know about coming financial-aid funds, elimination of EFC, loan-repayment updates and more.
January 12, 2021
Help for students is on the way from the federal government with the next round of the Higher Education Emergency Relief Fund, with $22.7 billion slated to distribute to colleges and universities as part of December’s second Covid-19 stimulus package.
“This is huge; we’re getting a whole new bucket of relief funds to support students,” said Mary Sauceda, associate vice president of Enrollment Management at Metropolitan State University of Denver.
The Department of Education has not yet issued specific eligibility criteria; more details are expected soon. Aid eligibility is tied to the FAFSA (fafsa.gov) or Dreamer/International student Aid Application (DAIA) application; students can still complete the 2020-21 forms in the myStudentAid app for fund consideration this semester.
Along with the $34.4 million initial spring-semester Financial Aid disbursement to student accounts this past Saturday, it will be an added boost to help keep Roadrunners on track to graduation. And although the exact amount that MSU Denver will receive from the Department of Education should be announced in the coming days, it’s expected to broaden from the previous package, said Thad Spaulding, executive director of Financial Aid.
Last spring’s CARES relief act saw MSU Denver distributing $7.2 million of the federally allocated $14 million directly to students (remaining funds helped support initiatives such as rapid scaling of online instruction). The University also expanded support to provide approximately $400,000 to non-Title IV-eligible individuals, such as international and Dreamer students.
“Our team came up with a solid plan and did a really good job in getting funds directly to students – it’s great that we’ll be getting more,” Spaulding said.
Allocation criteria for this round have changed from basing funds primarily on Pell-eligible students to a combination of head count, full-time equivalent and Pell. It will likely also be tied to how previous support monies were distributed, Spaulding added.
Other updates as part of the relief bill include:
- Estimated Family Contribution (EFC) – will no longer be a consideration in calculating aid amounts beginning with the 2023-24 academic year, allowing a negative dollar amount to help identify students with the most financial need. “This change will be helpful and less confusing for families on what they need to pay out of pocket; the shift (to what will be known as a student-aid index) will continue to serve as a benchmarking process for student-aid eligibility,” Sauceda said.
- Current Covid-related suspension of loan repayment for borrowers paying back loans is slated to expire Jan. 31 (unless extended by the incoming Biden administration).
- The maximum Pell grant for the 2021-22 academic year will increase by $150, from $6,345 to $6,495.
- Congress allows participating employers to treat up to $5,250 of an employee’s loan-repayment benefit as tax-free.
- Lifetime limits on federal direct subsidized loans – currently set at 150% of an educational program’s length – will be eliminated.
The FAFSA will also no longer ask about a student’s Selective Service status or whether they’ve been convicted of a drug offense. Read more in this MarketWatch piece.
“Overall, the FAFSA questions will be substantially reduced as dozens will be eliminated in the 2023-24 application,” Spaulding said.
Students with any questions should connect with Financial Aid’s Virtual Front Desk , which provides live drop-in support via Microsoft Teams, Monday through Friday, 10 a.m.-3 p.m.
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