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Everything the new stimulus package includes for college students, from emergency aid to tax-free loan forgiveness

March 11, 2021, 6:50 PM UTC

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New $1,400 stimulus checks, part of the recently passed $1.9 trillion relief package, are getting the lion’s share of attention this week. But the legislation, which President Joe Biden signed into law on Thursday, also includes many benefits for students.

Known as the American Rescue Plan, the law will extend unemployment benefits through August. The plan will also provide more aid to small businesses.

At nearly 600 pages, the law can be difficult to read through. To help students—and recent graduates—better understand the details and what it means for them, Fortune put together a guide.

How does the relief bill affect my student loans?

The relief package doesn’t directly address student loans. But in January, Biden issued an executive order that extended the loan payment freeze for eight months. That protection has been in place since the CARES act—short for the Coronavirus Aid, Relief, and Economic Security act—was passed last March and gives a break to 42 million borrowers. Any interest accrued during the freeze is also waived.

Biden has talked about cancelling student loan debt. But so far no action has been taken on that—and an executive order may be unlikely.

What about student loan forgiveness?

Any student debt that was forgiven after Dec. 31, 2020, or that becomes forgiven through Jan. 1, 2026, is no longer subject to taxation, as part of the relief package. That won’t necessarily affect recent graduates, but it will affect others.

Namely, the change will benefit anyone who was taking part in an income-driven repayment plan. Such plans let people make monthly payments on their student loans based on their income, usually over a span of 20 or 25 years. If the loan is not fully repaid in that time, the remaining balance is forgiven.

It’s a fairly new program, but the span of the forgiveness window could save some people thousands of dollars in taxable income.

Does the relief package offer financial aid for students?

Colleges and universities will get nearly $40 billion as part of the relief package. At least half of the funds given to schools are earmarked for student emergency financial aid.

Exactly how the money will be distributed on a school-by-school level can vary. For at least part of the money, financial need must factor into the decision-making about which students to prioritize. Recipients of the aid can use it on everything from tuition and housing to food and mental-health care.

How do I apply to receive that financial aid?

You’ll need to check with your university’s financial aid department. Some schools are making direct payments. Others are requiring applications and then choosing the worthiest applicants.

Can international students take advantage of the stimulus package’s financial aid?

No one is entirely sure about that, to be honest. The Department of Education has not issued guidance on whether international students, DACA, or undocumented students will qualify for assistance.

How do I defer my loans if I need to?

Ultimately, that will depend on whether your loan is government held or privately held.

For government held student loans, step one is reaching out to your lender. The Department of Education has contact numbers for servicers of federally held loans listed on its website. If you’re not sure who holds your loan, call the Federal Student Aid Information Center, or FSAIC, at 1-800-433-3243, or visit

Once you’ve found the right lender, ask for an administrative forbearance. That will allow you to stop making payments without being marked delinquent. You won’t have to worry about extending that forbearance if the government extends the loan suspension program, either. That will be done automatically once you’ve called.

If you have a Sally Mae or other privately held loan, Biden’s executive order doesn’t apply there. You can still request a forbearance to temporarily postpone or reduce your payments, but as of now, you’ll still face late fees, and interest will accrue. And a payment might be required to obtain the forbearance.

Still, the penalties are better than defaulting on the loans.

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