UT discharges almost $5M in student debt

AUSTIN — The University of Texas has forgiven nearly $5 million in student debt this year using federal COVID-19 relief funds.

UT used part of the money it received from the third round of funding for the federal Higher Education Emergency Relief Fund, as part of the $1.9 trillion American Rescue Plan approved by Congress in March. The university discharged the debt of 8,144 students, with an average amount discharged of about $610 per student.

“Discharge of the past due debts means all financial bars have been cleared,” said Kathleen Harrison, assistant director of communications for the office of executive vice president and provost. “By eliminating financial bars generated from prior balances, enrollment disruption is reduced as students work to complete their degrees.”

The relief fund was established by the Coronavirus Aid, Relief and Economic Security Act in March 2020 in response to financial concerns affecting colleges and universities during the COVID-19 pandemic.

UT officials notified eligible students Wednesday that they would have their outstanding student account balances and institutional loans discharged for fall 2021 semester in an email from Diane Todd Sprague, executive director of the Office of Scholarships and Financial Aid, and Brian Dixon, associate vice provost of student aid and affordability.

“UT Austin is using part of its HEERF institutional grant to do this, so that we can help students overcome the economic impacts of the coronavirus pandemic and assist them in continuing their education or finding employment,” Todd Sprague and Dixon wrote in the email.

In October, Harrison said UT had previously discharged more than $2.6 million for 2,247 undergraduate and 544 graduate students for past due balances incurred before fall 2021. This month, UT discharged more than $2.3 million for 5,353 undergraduates in December. Harrison said students had to be enrolled since March 13, 2020, to be eligible to get their debt discharged, and there are no other conditions attached to the debt relief.

Students still will owe any federal or private loans. President Joe Biden recently said he will restart federal student loan payments Feb. 1, ending a nearly two-year pause put in place to address the financial strain of the pandemic.

Congress previously approved the CARES Act, which allocated about $14 billion to the Higher Education Emergency Relief Fund, and the Coronavirus Response and Relief Supplemental Act authorized about $23 billion for the fund after it was passed in December 2020.

According to the university’s website, UT distributed about $15.7 million to students from the CARES Act funding. The university also distributed more than $3.3 million under the second round of funding for Zoom video licenses and lost revenue for the UT Child Development Center and Division of Diversity and Community Engagement.

Harrison said UT also is disbursing more than $50 million in emergency aid from the relief funds to students during the 2021-22 fiscal year. UT had used earlier funds for items such as additional emergency grants, reimbursements for housing and additional technology for students.

Public universities, community colleges and private schools across the nation received Higher Education Emergency Relief Fund money based on factors such as student enrollment and the number of Pell Grant recipients.

Under the third round of federal funding, UT received nearly $86 million, according to data from the U.S. Department of Education.