As the novel coronavirus continues to spread, Americans across the country are grappling with the worst economic recession and highest unemployment rate since the Great Depression. Among the millions of individuals impacted by job losses are thousands of college students and recent graduates.
Many working college students were previously ineligible for traditional unemployment insurance (UI) programs due to insufficient work history, not earning enough to qualify for the minimum benefits, or being considered “unable and unavailable to work” as a result of being enrolled as a full-time student.
Fortunately, the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law in March created the Pandemic Unemployment Assistance (PUA) and Pandemic Unemployment Compensation (PUC) programs. These programs expanded benefits eligibility to workers impacted by COVID-19 and substantially increased the amount of assistance by providing an additional $600 each week on top of UI benefits calculated by each state (which are, on average, a minimum of $190 per week).The additional $600 in benefits began in late March and expired at the end of July 2020. Among those included in expanded PUA eligibility were full-time students who were also working prior to the pandemic. NASFAA’s previous coverage explored working students’ and new graduates’ eligibility for the CARES Act unemployment benefits.
However, the additional $600 per week included in the CARES Act expired at the end of July, and Congress has not yet passed another pandemic relief bill to extend the boosted weekly benefit.
There are, however, still some UI options for students whose employment has been impacted by COVID-19. Students who lost a job or a job offer because of COVID-19 can still receive the base PUA benefit averaging $190 per week through Dec. 31, 2020. If students filed late, they can still receive the $600 per week supplement for any weeks of unemployment prior to July 31, 2020.
One group of students who may not have applied for the enhanced UI benefits despite being eligible are Federal Work-Study (FWS) students. Although the Department of Labor (DOL) issued guidance in late April confirming that full-time students who were working part-time were eligible for PUA assistance, it was initially unclear whether that eligibility extended to FWS students. DOL eventually clarified in a July FAQ that FWS students are eligible for PUA. The FAQ states, “An individual participating in work-study who is not eligible for regular [unemployment compensation], whose worksite closed as a direct result of COVID-19, and who has suffered a loss of income, may be eligible for PUA.”
While students who were eligible for PUA before July 31 should apply to receive the enhanced benefit retroactively, those individuals as well as eligible workers who have experienced new or continued job loss after July 31 are still able to receive an underlying benefit calculated by their state through the end of 2020. In addition to boosting the weekly benefit by $600 through the end of July, the CARES Act extended the period during which an individual can receive unemployment benefits to 39 weeks, through Dec. 31, 2020. This means that after July 31 and until December 31, students will not receive the additional $600 per week, but can still receive a UI benefit based on state calculations, with a minimum benefit of 50% of the median weekly benefit in their state.
Following the expiration of the additional $600 weekly benefit, President Donald Trump issued a presidential memorandum in early August extending the federal unemployment benefits at a reduced level. While states can pay $400 per week, with a $100 state / $300 federal mix, only five states (New Hampshire, Vermont, Montana, Kentucky, and West Virginia) have done so. The others are paying $300 per week. The program has been very slow to implement, with only seven states making payments by the end of August. Most other states will come online in September. Two new eligibility requirements have been added. Students won’t be able to get Lost Wages Assistance (LWA) unless their underlying benefits are greater than $100 per week, and must certify that they lost their original job because of COVID-19.
NASFAA will continue to follow developments on the presidential memorandum and pandemic unemployment assistance, and will cover updates impacting working students in Today’s News.
For more information and resources on how the spread of the novel coronavirus is impacting student financial aid, please refer to NASFAA's COVID-19 Web Center.
Publication Date: 9/10/2020