CARES Act for Individuals- Education Loan and Medical Cost Benefits

TPC planning and Tax teams

On Friday, March 27th President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law.

This legislation is being billed as the largest aid and relief act in the history of the United States, and is designed to support individuals and businesses as we all weather this Coronavirus 19 (CV19) storm.

In addition to the benefits for individual income and business continuity, the CARES Act provided some relief for students and medical care, specifically those in the Medicare system.

Relief for those with student loans:

  • All Federal Student loan payments can be deferred to September 30, 2020
    • No interest will accrue in the interim.
    • The intervening period (March – Sept 2020) will still count towards loan forgiveness programs (i.e. PSLF)
      • Anyone eligible for these programs should STOP their payments immediately.
    • Each borrower is required to proactively stop their payments (particularly if on autopay) if desired.
      • You are still allowed to make voluntary payments, which presumably would pay down principal of the loan faster.
    • Involuntary debt collection on Federal student loans is also suspended.

Employer Related Education Support

    • Employers can continue to offer educational support to employees, under “normal rules”, up to the amount of $5,250 per year.
    • Employers may now exclude student loan repayments as compensation, up to the $5,250 limit.
    • The $5,250 limit is still the maximum allowable for ALL education support, meaning any debt repayment as part of this provision must be coordinated with other educational support existing in 2020.

Pell Grants and subsidized Federal Loan relief for students leaving school

    • Periods of enrollment with respect to these programs will NOT include a semester not completed due to a qualifying emergency.
    • This, at a minimum, would include spring semester of 2020.

Definitions of medical expenses have been expanded, specifically for HSAs, FSAs and Archer MSAs, to include:

    • Over the Counter (OTC) medications
    • Menstrual care products

Other notable changes:

    • CV19 testing at no cost (or without cost sharing)
    • Medicare benefits to receive no-cost CV19 vaccine (when available)
    • Part D recipients can request up to a 90-day supply of necessary medications
    • Telehealth services are temporarily covered by your HSA eligible high deductible health plan (HDHP)

We’re living in volatile times, and we’re ready to work with you to find the right path forward with respect to your 2020 student loans and medical costs and planning. Please contact us with any questions you may have!



The Planning Center is a fee-only financial planning and wealth management firm. 

Email us at: clientservices@theplanningcenter.com.

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