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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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When the novel coronavirus hit in March of 2020, governments and businesses scrambled to create programs that would soften the gut punch they knew COVID-19 would deliver to the U.S. economy.

Government handed out fistfuls of money; banks relaxed rules on foreclosure; landlords were ordered to suspend evictions; credit card companies were flexible on late payments; and even the 44 million student loan borrowers didn’t have to make payment or pay interest on their debt.

Everybody, it seemed, got a break. For a while, anyway!

Now it’s 2021, a new year with a new president, and the nation has a new attitude. Americans are on a vaccinating binge. We have complete conversations in two words. Moderna? Pfizer. First? Both!

We’re immunized and restless. We’re starting to get back out. We’re starting to spend. We’re looking at Florida Gov. Ron DeSantis suing the Centers for Disease Control to get cruises restarted, and we cheer.

But COVID-19 isn’t whipped yet, and significant parts of the economy — not just pleasure sailing — remain wobbly.

Some of the relief programs introduced in 2020 are still accommodating consumers in 2021, but — with the possible exception of the Democrat-run federal government, which weighed in with the $1.9 trillion American Rescue Plan in March — not everyone is as all-in as they were last spring, when the crisis was new and the outcome uncertain.

Still, even before the American Rescue Plan became law, there was plenty of unspent cash in Washington’s pipeline.

Here’s a look at who’s still in and what you can expect from them.

Loans and Credit Card Relief for COVID-19

One thing isn’t changing right away. Renters who can demonstrate they’ve been economically hurt by coronavirus still can’t be forced out of their homes.

Citing studies that indicate evictions lead to crowded living conditions, spreading COVID-19 and virus-linked deaths, the Centers for Disease Control extended its ban on evictions until October 3rd — welcome relief to the eight million households the Census Bureau says are behind on their rent.

“The COVID-19 pandemic has presented a historic threat to the nation’s public health,” CDC Director Dr. Rochelle Walensky said. “Keeping people in their homes and out of crowded or congregate settings — like homeless shelters — by preventing evictions is a key step in helping to stop the spread of COVID-19.”

There’s welcome news for the 10 million-plus homeowners behind in their mortgage payments: Homeowners behind on their mortgage payments were granted relief through June 30 when the White House directed the Department of Housing and Urban Development, Department of Veterans Affairs, and Department of Agriculture to expand and extend forbearance and foreclosure relief programs for those with federally backed mortgages.

Additionally, Fannie Mae and Freddie Mac extended foreclosure moratoriums for an additional three months for borrowers approaching the end of their forbearance period.

Some banks allowed homeowners to miss mortgage payments for as long as 12 months, but that period is rapidly closing. Financial institutions make money when loans are paid back. That’s not happening in a lot of places.

An estimated 20% of homeowners missed at least one mortgage payment in 2020 and nearly half (46%) missed at least three payments since March 2020.

» More about: COVID-19 Loans

Banks and credit card companies have slowed payment assistance programs, most of which began in March of 2020.

Credit card companies, who usually make millions every month off late payment and over-the-limit fees, backed off penalizing their customers for most of 2020, allowing them to defer payments for two or three billing cycles.

That assistance appears to be going away at many major card companies. If your financial situation has crumbled because of the coronavirus, it’s best to call your card company or visit their website to see if any assistance still is available.

Meanwhile, no, it’s not your imagination. And you’re not alone. To protect themselves from shakier risks, the 14 lenders that dominate U.S. credit cards whacked $99 billion from their more troubled customers’ spending limits in 2020.

Other COVID-19 Relief Offerings from Private Businesses

The most often-repeated message from the big banks and credit card companies is for those negatively impacted by COVID-19 to stay home and use online or mobile app banking services to do their bill-paying and keep track of their accounts.

The second most-common message was: Call our customer service department for specific help with either personal or small business accounts. The sooner you contact a bank representative or your credit card company, the better.

Now, let’s check out the latest in debt-relief options from the American Rescue Plan.

» More about: COVID-19 Credit Card Assistance

Credit card companies, who usually make millions every month off late payment and over-the-limit fees, backed off penalizing their customers for most of 2020, allowing them to defer payments for two or three billing cycles.

That assistance appears to be going away at a lot of the major card companies. If your financial situation has crumbled because of the coronavirus, it’s best to call your card company or visit their website to see if any assistance still is available.

Federal Government Relief for COVID-19

Congress passed the $1.9 trillion American Rescue Plan Act in March, following up on COVID-19 relief actions taken in late December ($900 billion) and March (the $3 trillion CARES Act).

Some of the highlights of the American Rescue Plan include:

A Third Stimulus Check

Congress authorized fresh payments of $1,400 to eligible individuals and dependents (including college students), and $2,800 to married couples. 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.

Child Tax Credit

The American Rescue Plan institutes a fully refundable child tax credit for 2021 — eligible families get the money even if they don’t pay income taxes — 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. Moreover, eligible households do not have to wait: The plan offers periodic payments from July 1 to December 31, putting new cash in the budgets of low-to-middle income families with young children.

Unemployment Benefits

Through Labor Day, the federal government will continue to add $300 per week to whatever state benefits unemployed workers are receiving. The maximum weeks that unemployed workers can receive benefits was extended to 79 (86 in some high-unemployment states). Relief also will keep coming for gig workers and others not traditionally eligible for aid. Additionally, the plan waives income taxes 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.

Health and Human Service Funding

The plan provides a scheme that will allow as many as 3.64 million uninsured people apply for health care tax credits. As many as 1.77 million will qualify for $0 marketplace coverage. ARPA spends $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.

State and Local Recovery Fund

ARPA adds $350 billion to the CARES Act grant money sent to state, local, territorial, and Tribal governments. Contact your local representatives or check local government websites to see how the money is being distributed.

Homeowner Assistance

Each state, the District of Columbia, and Puerto Rico will receive a minimum of $50 million to help its most vulnerable homeowners.

Emergency Rental Assistance

ARPA nearly doubles the $25 billion appropriated for Emergency Rental Assistance in December. Each state and the District of Columbia will receive a minimum of $152 million to boost state and local government efforts on behalf of Americans who can’t pay the rent.

Child Care Help

The plan extends earlier support for the child care industry, adding more than $50 billion for providers through state agencies.

Waived 401(k) Penalties Modified

Workers can still take as much as $100,000 from their 401(k) account, but only if they live in an area that has been declared a major disaster. The federal government waived the 10% early-withdrawal penalty for taking money from your 401(k) retirement fund as part of the CARES Act. That action was allowed if your finances were affected by the coronavirus. Now, it has to be the result of a major disaster.

Paycheck Protection Program for Small Businesses

Although it adds only a modest $7.5 billion to the high-profile program, ARPA extends Paycheck Protection Program loan applications for small businesses through May 31, and changes eligibility to include labor unions, benefit plans, agricultural organizations, certain internet-only publishers, and recreational clubs.

December’s boost to PPP was $284 billion to make forgivable loans to small businesses for use to meet payroll. That included $25 billion in funding specifically aimed at companies with a maximum of 10 employees.

Another December winner was the entertainment industry, which got $15 billion to help independent movie theaters, music clubs and entertainment venues.

Nonprofits, local newspapers, TV and radio broadcasters were added to the list of eligible companies.

Student Loan Breaks Continue

The U.S. Department of Education announced a final extension on the pause of federal student payments and collections. The program will continue through the end of January 2022.

The pause includes the following:

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

Whether this is the opening salvo on a broader student-loan forgiveness plan coming out of the Biden White House remains a focus of intrigue.

For borrowers who have already been making payments, the COVID-19 Emergency Relief program offers an opportunity to receive a refund on any payments made on Direct Loans owned by the Department of Education since the COVID-19 forbearance period officially began March 13, 2020.

Yes, if you need the money back, you can get a refund on student loan payments during COVID-19, and it’s actually pretty easy. All you need to do is call the lender servicing your student loan and give them this information:

  • The dates you made payments
  • The amount of each payment
  • How many of the payments you want refunded

Ask the loan servicing agent for the date you should expect a refund, then check your account that day to make sure the plan went through as approved.

What’s Next in COVID-19 Relief Options?

Arguing that the third round of stimulus/relief checks wouldn’t take many families very far, a group of 21 Democratic senators asked the president to include more recurring direct payments and automatic unemployment insurance extensions in his long-term economic strategy.

But rather than openly support a fourth stimulus check or recurring payments, Biden has turned his attention to his infrastructure plan, which could top $2 trillion. It seems the next step in COVID-19 relief is most likely to be modeled after the time-honored Democratic tradition of Franklin Roosevelt, using federal dollars to steer people back to work.

Scammers Alert

The Federal Trade Commission has posted a warning that scammers are looking at panic-stricken consumers as easy prey for opportunities to take money or steal personal information.

Scammers could be using fake social media posts, texts or email posts that sound like news on treatments or information on where to make donations for relief funds — they’re even going after grieving families’ funeral benefits — and it’s all fake.

Here are the FTC’s warnings about scammers:

  • Don’t click on links from sources you don’t recognize
  • Ignore emails claiming to come from the Center for Disease Control.
  • Avoid online offers for vaccinations or treatments.
  • If someone is asking for donations in cash, gift cards or wiring money, stay away!
  • Beware of “investment opportunities” in any company claiming that says it can detect, prevent or cure coronavirus.
  • If you have lost a loved one to COVID-19 and want help with funeral expenses, hang up or otherwise disregard anyone who contacts you saying they’re from the Federal Emergency Management Agency. FEMA will wait for your application; no one from the agency will contact you.

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 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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