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Financial Help for COVID-19

Bills are coming due for those who received financial “accommodations” during the COVID-19 crisis.

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While many of the programs put in place by Congress to provide financial help to Americans during the COVID-19 pandemic have expired, those who need help with bills and other financial challenges may find some options still available.

Loans and Credit Card Relief for COVID-19

In 2022, more than two years after the COVID-19 pandemic began, federal COVID-19 relief efforts have turned to testing, vaccinations and global aid. While there are still options for Americans having trouble paying their bills because of the pandemic, many federal programs have been phased out.

Many consumers relied on credit cards, and are still relying on them, to pay bills or for basic household needs, like groceries. A Forbes study found that 75% of credit card holders said they have missed a payment or have been late on payments during the pandemic. While credit card use slowed the first year of the pandemic, it picked back up in 2021. Lenders, who’d pulled back on issuing credit cards and loans to sub-prime borrowers (people with lower credit scores) began loosening standards as people went back to work.

The federal foreclosure moratorium that protected homeowners during COVID-19 is also over, ending July 31, 2021, and the eviction moratorium that protected renters ended in September 2021.

Those who have lost their housing because of COVID-19 related issues may still be eligible for emergency housing assistance, temporary rental assistance and more through their state or local governments. The Consumer Financial Protection Bureau has a webpage that lists resources for preventing evictions and foreclosure defense.

Many state, local and tribal governments are using the $350 billion allocated by federal relief plans to expand housing, education, health care and other programs, though much of the money is still in limbo as states decide how to use it.

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Federal Government Relief for COVID-19

Congress passed the $1.9 trillion American Rescue Plan Act in March 2021, following up on COVID-19 relief actions taken in late December 2020 ($900 billion) and March 2020 (the $3 trillion CARES Act). By 2022, most of the focus of federal COVID-19 help had shifted to vaccinations, testing and getting schools and businesses back open.

Some of the highlights of the American Rescue Plan, and their status, are:

A Third Stimulus Check

Eligible individuals and dependents got a third stimulus check of $1,400; married couples got $2,800. The third stimulus check was reduced for individuals earning more than $75,000, heads of households reporting more than $112,500, and married couples earning more than $150,000. Congress has made it clear there will be no more stimulus checks, but some state governments in 2022 used ARP money allocated to states to provide additional stimulus.

Child Tax Credit

The American Rescue Plan (ARP) instituted a fully refundable child tax credit for 2021 and boosted its outlay to $3,600 (from $2,000) for children under age 6, $3,000 between 6 and not-yet 18. The previous cutoff had been 17. The credit was based on taxes filed for the 2019 and 2020 tax years, but those who didn’t make enough money to pay taxes were also eligible if they applied by Nov. 15, 2021. The credit came as $300 monthly payments ($250 for the lower amount) from July 1 to Dec. 31, 2021. Previously the CTC was claimed when filing taxes. The up-front payments put new cash in the budgets of more than 61 million low-to-middle income families, who used it for food, living expenses and 10% of those who got it used it for child care, allowing them to go to work. The expanded CTC temporarily lifted an estimated 3.7 million children out of poverty, reducing the child poverty rate by 30%. In January 2022, the child poverty rate began to rise as the extended credit expired. Efforts to make the payments permanent haven’t been successful. Eight states – California, Colorado, Idaho, Maine, Maryland, New Mexico, New York, Oklahoma – enacted additional CTCs in 2021.

Unemployment Benefits

The federal expanded unemployment benefit expired in fall 2021. Income taxes for the 2021 tax year were waived on the first $10,200 in unemployment payments ($20,400 for married couples) for those made less than $150,000 in adjusted gross income in 2020. Some states also enhanced unemployment benefits above the federal program.

» More about: Covid-19 Unemployment Benefits

Health and Human Services Funding

More than 5.8 million Americans without health insurance signed up for it through the Affordable Care Act in 2021 as the American Recover Plan (ARP) made qualifying for $0 marketplace coverage easier for low-income Americans and cut premiums for others by as much as 50%. The ARP also spent $120 billion on vaccines, supplies, and disaster recovery, and another $20 billion on community health centers, public health workers, and mental health and substance abuse programs, making health care more accessible to more Americans. Those with financial challenges seeking health care should contact their local community health care agency, which may have expanded programs related to the ARP, and also can help navigate the ACA marketplace.

State and Local Recovery Fund

ARP added $350 billion to the CARES Act grant money sent to state, local, territorial and tribal governments. Much of the money has yet to be distributed as state and local governments decide best how to spend it. States have a lot of flexibility in how they use the money, and most are using it to help offset the negative effects of the pandemic, including boosting health care access, more help for small businesses, enhanced unemployment payments, increasing broadband access, supporting education and more. Some states are even providing stimulus checks to residents. Maine, for example, in its 2022 supplemental budget, included $850 stimulus checks to anyone who makes $100,000 or less a year. Most states have a COVID-19 section on their website. Check there to see what benefits your state may have or contact your local representative or local government website.

Homeowner Assistance

While federal homeowner relief has ended, each state, the District of Columbia, and Puerto Rico received a minimum of $50 million to help homeowners. Check your state’s COVID-19 webpage or your local housing authority (or agency) to find out what benefits or support there may be.

Emergency Rental Assistance

Each state and the District of Columbia received a minimum of $152 million to boost state and local government efforts on behalf of Americans who can’t pay the rent. Check your state’s COVID-19 webpage to find out what rental assistance there may be and how to apply.

Child Care Help

The plan extended support for the child care industry, adding more than $50 billion for providers through state agencies. Check your state’s COVID-19 webpage to see if your state is providing assistance that you can use.

Waived 401(k) Penalties Modified

The federal government, as part of the March 2020 CARES Act, waived the 10% early-withdrawal penalty for people under 59½ who took money from a 401(k) retirement fund, up to $100,000, if their finances were affected by COVID-19. That has expired and the only waiver for those under 59½ is for those who are affected by a disaster, as declared by the federal government.

Paycheck Protection Program for Small Businesses

The ARP added $7.5 billion to the Paycheck Protection Program, which provided payroll and other support for small businesses. The period to apply ended May 31, 2021, but participants who got a loan through the program can provide for forgiveness any time during the life of the loan. Visit the Small Business Administration’s PPP page for information on how.

Small Business Tax Credits Program

The ARP extended the Employee Retention Credit and Paid Leave Credit to small businesses through 2021. The ERC allowed businesses to offset their 2021 payroll tax liabilities by up to $7,000 per employee per quarter until December 2021. It was available to small businesses that lost revenue because of COVID-19. The PLC was a tax credit for small and midsize businesses that offered paid leave to employees who were out of work because of illness, quarantine or caregiving, up to $5,000, through September 2021. Businesses who used them should have claimed them when filing taxes in 2022.

Student Loan Breaks Continue

On April 6, 2022, the U.S. Department of Education extended the student loan payment pause through Aug. 31, 2022.The pause includes

  • Suspension of all federal loan payments
  • 0% interest rate
  • Suspension of collections on defaulted loans

To prepare for payments to resume, the Department of Education suggests:

  • Update the contact information in your profile on your loan servicer’s website and your StudentAid.gov profile.
  • Review your auto-debit enrollment or sign up if you aren’t already. Log in to your loan servicer’s website or contact your loan servicer directly.
  • Visit Loan Simulator to find a repayment plan that meets your needs and goals or to decide whether to consolidate.
  • Consider applying for an income-driven repayment plan. An IDR plan can make your payments more affordable, depending on your income and family size

Once the payment pause ends, borrowers will receive a billing statement at least 21 days before payment is due that will include amount and due date.

Those who want to prepare further can get an estimate of amount and due date through their loan servicer.

There are also several student loan forgiveness programs, in which you may not have to repay your loan at all. These include:

Public Service Loan Forgiveness of federal Direct Loans for those employed by a government or nonprofit organization. PSLF forgives the remaining balance on a loan after the borrower has made 120 qualifying monthly payments with certain restrictions. Suspended payments during  COVID-19 count toward the 120 payments.

Teacher Loan Forgiveness of Direct Loans and FFEL Program loans. Full-time teachers who’ve worked for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency, may be eligible for forgiveness of up to $17,500.

Closed School Discharge of Direct Loans, FFEL Program loans and Perkins Loans. Students in schools that close while they’re enrolled may be eligible.

Perkins Loan Cancellation and Discharge may apply to all or a portion of a Perkins Loan based on employment or volunteer service.

Total and Permanent Disability Discharge of Direct Loans, FFEL Program loans and Perkins Loans for students totally and permanently disabled.

Scammers Alert

The Federal Trade Commission has been warning consumers about scams related to COVID-19 since the pandemic started. Scammers may use fake social media posts, a fake survey, texts or email that sound like news. Early scams focused on treatments, information on where to make donations for relief. More recent ones try to get people to pay for COVID-19 vaccinations (vaccines are free of charge), rental assistance and more.

The FTC recommends these tips to avoid coronavirus scams:

COVID-19 vaccines are free. If anyone charges you for help signing up or for the shot itself, it’s a scam.

You can’t buy a COVID-19 vaccine anywhere. It’s only available at federal- and state-approved locations.

Always talk with your doctor or health care professional before you try a product claiming to treat, prevent, or cure COVID-19.

Don’t post your vaccination card on social media. Someone could use the information for identity theft.

There are currently no official plans to create a national vaccine verification app, certificate or passport.

If someone asks you for personal information or money to get a national vaccine certificate or passport, that’s a scam.

Contact your state government about its vaccine verification plans and requirements.

Before traveling, check with airlines, cruise lines, and event venues about vaccine verification or negative testing requirements.

When you’re looking for pandemic-related help, start with sites like coronavirus.gov and usa.gov/coronavirus.

Don’t click on links from sources you don’t recognize

Ignore emails claiming to come from the Center for Disease Control.

If someone is asking for donations in cash, gift cards or wiring money, it’s a scam.

If you have lost a loved one to COVID-19 and need help with funeral expenses, beware of callers, texts or email from someone claiming to be from the Federal Emergency Management Agency. FEMA will wait for your application; no one from the agency will contact you.

Talk to a Financial Professional for Help

Much of the federal COVID-19 for consumers has expired, and state relief may not be enough for some people. If you are struggling to make credit card payments, need support or are looking for financial education that will help you with budgeting and financial resources, a nonprofit credit counselor is a good option.

Nonprofit credit counselors will talk to you at no charge, review your financial situation and help strategize solutions. Counselors with agencies certified by the National Federation of Credit Counseling are required by law to act in your best interest – they won’t try to sell you a product.

If you are struggling with credit card or other debt, they may recommend debt relief solutions, including a debt management plan, debt consolidation or nonprofit debt settlement.

Whatever debt relief, or other financial relief, you need, you can start right now by making on-time payments, lowering balances and making good spending choices. A free discussion with a credit counselor may be the step you need to achieve those goals.

About The Author

Bill Fay

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

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