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The Quad: How students are affected by economic downturn, lack of stimulus bill

Many Bruins benefitted from a stimulus check during the COVID-19 pandemic’s economic uncertainty. Now, it is unclear whether the government will continue this program. (Kanishka Mehra/Photo editor)

By Veronica Fernandez De Soto

Oct. 19, 2020 7:25 p.m.

This October, Bruins might not find ghosts or zombies as terrifying as in previous years.

Instead, the real scare is figuring out how to battle higher education costs and mass unemployment amid a pandemic, all while trying not to fail midterms. To top it off, the slim chances of the Senate passing a second stimulus bill – which would distribute aid to individual Americans in need – will likely leave Bruins empty handed going into November’s election.

The latest data from the census’s Household Pulse Survey shows that one in three adults nationwide – and 35% in California – struggle with meeting their usual expenses, including rent, mortgage, insurance, health care, and student loans.

The Labor Department also reported 886,000 new state-filed unemployment claims during the week of Oct. 5.

UCLA has not been isolated from the effects of the pandemic-induced economic downturn, either. In fact, UCLA lost $653 million in revenue from March to August – the highest COVID-19 related financial losses out of all UC campuses.

This is troubling news for an already vulnerable student body. Many undergraduates are low-income – roughly 45% don’t pay tuition, while 35% receive Pell Grants. Though the university has made certain accommodations, the COVID-19 economic downturn has disproportionally affected low-income adults, resulting in more job losses and interruptions, more loss of income and higher health care costs.

[Related: Study finds low-income LA communities most at risk of not receiving CARES Act funds]

But what, if anything, will the federal government do about it?

At the start of the pandemic, there seemed to be a more straightforward answer to this question.

In March 2020, the federal government unveiled a historic piece of legislation – the Coronavirus Aid, Relief and Economic Security (CARES) Act. This $2 trillion-dollar aid package aimed to deliver checks to those most economically affected by the pandemic: individuals, small businesses, big corporations, hospitals and public health facilities, federal safety net programs, state and local governments and educational institutions.

When all was said and done, UCLA received close to $36 million in federal aid as a part of the CARES act.

Of the funds assigned towards student aid, the university distributed the largest amount – 58% – to supply need-based grants for qualifying undergraduate students based on Expected Family Contribution. Each student received a sum ranging from $250 to $1,850.

Another 20% went towards the CARES Universal Impact Grant, which provided $200 to FAFSA-eligible students who completed an application.

The university also offered privately-funded grants for international and undocumented students who could not access CARES funding.

Aly Ung, a fourth-year bioengineering student, said she used the CARES grant from UCLA to pay for rent and living expenses while waiting to hear if she would be able to keep her job.

Isabel Roig, a fourth-year statistics student, received one of the university’s impact grants because she is an international student from Venezuela, a country already suffering from massive inflation before the pandemic.

“I applied for a grant because Venezuela’s financial situation worsened, which meant my parents had a more challenging time paying for tuition and housing,” Roig said. “The money I received helped me keep up with my living expenses in Westwood and take off some of my parents’ financial load.”

These grants are important for many reasons, but allowing students to focus on their academics amid economic chaos is a big one. Urban planning department chair Chris Tilly said worrying about economic hardships can place a cognitive load on students and affect their academic performance.

[ICYMI: Pandemic’s economic effects could shape student job prospects for years to come]

Students are in a particularly vulnerable position when it comes to the COVID-19 economic recession. Students were more likely to receive no government aid from the CARES Act because of their status as dependents on their parents’ taxes. But many households also did not qualify for an additional $500 because most students are 18 or older.

Tilly said these regulations ignore the financial reality of being a student.

“A lot of students work on service economy jobs that have been shut down by what’s happened to the economy,” Tilly said. “Students are also part of families, and families are hurting economically because most often, somebody in a family has lost their job or has taken a pay cut.”

This is the case for Ung’s father, who received $1,200 in government aid after receiving no income from his job during the first few months of the pandemic.

“My dad works for Uber, and he didn’t have Medi-Cal or Medicare, so naturally, we didn’t want him driving around,” Ung said. “With my income background, and considering he was the sole breadwinner of our family, the CARES stimulus check helped our family get through living expenses and rent.”

Statistics and economics professor Edward Leamer said he believes having a stimulus package is both a moral obligation and a way to slow down the COVID-19 pandemic.

“We needed to take care of the people that were losing their jobs because they began to work to control the spread of COVID-19 by staying home,” Leamer said. “I think the ideal government program would have been to maintain income levels for everyone affected by shutdowns, just to say thanks for helping us out.”

Yet, it doesn’t seem like the federal government is in any rush to secure another stimulus package before the election.

Initially, President Donald Trump declared he would stall negotiations for a stimulus package until after the Nov. 3 election. However, he has wholly backtracked, and asked the Senate Oct. 13 via Twitter to “Go big or go home.” Still, Wall Street analysts believe it is highly unlikely that a stimulus bill will pass before the November election.

Tilly also said a second bill is unlikely, given the misaligning interests of a Democratic majority in the House of Representatives and a Republican majority in the Senate.

“Whereas Trump has been inconsistent, the Senate has been consistently opposed,” Tilly said. “They want to pass what they call a ‘skinny bill,’ which has very little support and is unacceptable to the House Democrats because, essentially, it is almost worse than nothing.”

Senate Majority Leader Mitch McConnell said the Senate’s proposed “skinny bill” will likely be a highly-targeted $500 billion package. This sum is nowhere near the $2 trillion provided for the CARES stimulus checks distributed in the spring.

While the CARES stimulus package did seem to help people in the short term, the crisis is ongoing, and people are in tricky financial situations.

“A lot of families, like mine, rely on stimulus checks to get by,” Ung said. “The fact that the government is not considering that time is a precious commodity for low-income families and students is heart-wrenching.”

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Veronica Fernandez De Soto
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