By: Jenna Shelton
Due to the Coronavirus’ extensive impact on families being laid off or having reduced work hours, the Federal Government has issued a stimulus package. A few of the items from the stimulus package drive a direct immediate savings for college students.
One of which is the pause on student loan payments and dropping the interest rate on these loans to 0 percent. The pause allows for loan payments to not be paid for six months, or if possible to still make a payment the full value of the payment is applied to the loan principal with zero applied to interest. In this way, if the borrower has not had their income impacted and is still employed, making their payment and all of it applied to principal, the borrower’s total debt is reduced more than under the normal terms of the loan, chipping them out of debt faster.
Another important pause included in the stimulus package is an extension of the income tax deadline. Normally, April 15 is the deadline to file taxes, but for the current 2019 tax filing season, this date has been extended to July 15, 2020. This was much needed relief as many of the CPA firms are independent, small businesses. Neither the CPA nor the taxpayers need to be out to handle their tax business instead of staying home and meeting the mandated shelter-in-place policies issued across the United States.
These features alone allow the families to concentrate what funds they do have coming in on paying vital bills and keeping food on the tables for their families. Considering the fact that many children, especially those in low-income homes that normally depend on the free meal plans, typically eat breakfast and lunch at school versus now with home schooling the grocery consumption for the family has increased two meals for the total count of children in the household. While some schools are offering assistance and setting up staging areas where free bagged meals can be picked up, others are struggling to make their food budgets last.
To ensure that the economy can continue, the IRS is directly depositing money into the accounts of tax-payers who used direct deposit for their previous tax refunds in 2018 and 2019. This will allow those who have been affected to still be able to pay for their needs without having to borrow money. There are and will continue to be a lot of questions as time passes and more of the $2 trillion dollar Coronavirus Stimulus package is distributed. For now, check out the IRS website for more information or if there are questions.