Visa Crunch

New $900 billion injection for the economy includes $20 billion aid for higher education

As the US approved the Moderna and Pfizer-Biontech vaccines for emergency use, congressional leaders also reached an agreement on a much needed $900 billion injection of money for the economy, to dampen the effect of the COVID-19 crisis on all sectors of the economy.

Lawmakers also agreed upon another annual funding bill that provided for helping students through the medium of grants and loans. However, along with the $14 billion in aid that the Congress had included in the previous iteration of the COVID aid bill, the $20 billion in aid set aside for the higher education sector this year seems to be a drop in the ocean, for what the sector requires. Higher education leadership groups have put forth their grievances, saying that institutions in the sector were collectively short of a whopping $120 billion in the associated loss in revenue and hike in costs. “The scope of the financial duress of students and institutions has only grown,” they said in a letter to the congressional leaders.

Talking about student debt, the aid released by the COVID-relief bill has been provided with the understanding that more than half of it be spent on student financial aid. The bill has also further segregated the aid amount into provisions for minority-serving institutions and other institutions with significant needs tied to the pandemic.

The Trump administration has also agreed to extend a waiver postponing student loan payments for borrowers until February. This comes as a relief for most students who are currently studying on student loans and other forms of student collateral-based financing options.  While the newly-elected Biden administration has also expressed their intention to further help students by writing off certain portions of the student debt, it will remain to be seen how this will be done, because the brunt of the post-COVID-19 economic recovery will have to be borne by that government, and this might make writing off loans quite expensive.

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