Update, Dec. 22: The House and Senate late last night approved the COVID-19 relief and FY 2021 spending legislation, including the higher education provisions detailed in this story.
Congressional leaders Sunday night reached an agreement on a $900 billion COVID-19 relief bill, including a $22.7 billion higher education emergency fund, and the House and Senate this afternoon were poised to vote on a final measure.
Most of the higher education emergency assistance funding, $20.2 billion, goes to public and private nonprofit colleges and universities and their students. There is another fund of $1.7 billion specifically for historically Black colleges and universities, tribal colleges and universities, and other minority-serving institutions, as well as $113 million set aside for institutions with the greatest unmet need or those not served by the primary formula, such as independent graduate schools. The bill also provides $681 million dedicated for emergency aid for students attending for-profit universities. In addition, the final bill also provides an extension until Dec. 31, 2021, to spend funds provided to states and localities through the Coronavirus Relief Fund in the CARES Act.
The higher education money is part of a compromise reached between congressional Democrats and Republicans that resulted in a bill containing about $900 billion in total funding. That’s considerably less than the roughly $3 trillion HEROES Act passed by the House in May, but nearly double what Senate Majority Leader Mitch McConnell (R-KY) had proposed earlier.
The agreement came after months of inaction—there has not been additional COVID-19 relief since the CARES Act was approved in late March—and stops and starts last week and over the weekend. However, the higher education relief funding is wholly inadequate to meet the needs that exist for struggling students and families and institutions, ACE President Ted Mitchell said in a statement.
President-elect Biden has indicated that he regards this measure as merely a down payment on what is needed for higher education and the entire country, and McConnell and congressional Republicans seem amenable to another package because some of their priorities, notably targeted and temporary liability protection related to COVID-19, were not included in this bill. Democrats similarly want new state and local government relief that was dropped from the final bill.
ACE and more than 100 other higher education associations detailed why institutions and their students require at least $120 billion in additional assistance in this recent letter.
“The money provided in this bill will provide some limited relief, which is welcome news to struggling students and institutions. But it is not going to be nearly enough in the long run or even the medium term,” Mitchell said. “The financial impact of the pandemic and its economic fallout will be enormous, with more than a half a million job losses on campuses already. That is why we strongly urge the Biden administration and the new Congress to provide sufficient additional COVID-19 assistance for students and institutions in the new year, and we stand ready to work with the administration and lawmakers to get this done.”
ACE is still studying the details of the legislative text released today, but the funding formula is more complicated than under CARES and relies on Pell Grant and general enrollment, calculated by both headcount and full-time equivalent enrollment. Schools should have wide discretion on how to award student assistance and on how to spend the money to meet institutional needs.
FY 2021 Spending Package: While the big news for higher education was the COVID-19 relief money, the entire COVID-19 package was attached to the final FY 2021 spending measure. There was not as much in that package notable for higher education in terms of pressing needs, but there were several important items.
The amount of the maximum Pell Grant award was increased by $150 to $6,495, good news for students even if a much greater increase is needed. The Biden campaign has proposed doubling the Pell Grant, a proposal the higher education community strongly supports. The final bill also includes modest increases in funding for scientific research, including the National Institutes of Health (NIH) and the National Science Foundation (NSF). NIH receives $42.9 billion, an increase of $1.25 billion, or 3 percent, above FY 2020. NSF gets $8.49 billion, an increase of 2.5 percent over FY 2020. Otherwise, most programs received level funding in a year where overall spending increased very little.
Sen. Lamar Alexander (R-TN), the chair of the Senate education committee who is retiring this year, won inclusion in the spending package of his long-standing proposal to simplify the process of applying for federal student aid, reducing the number of questions on the FAFSA form from 108 to a maximum of 36. It will increase the overall number of people who are getting aid, although ACE and other associations, including the National Association of Student Financial Aid Administrators, will need to examine the technical language in detail to understand its total impact. This bill also includes a number of other significant measures, such as forgiving all outstanding federal HBCU Capital Financing loans to historically Black colleges and universities and restoring Pell Grant eligibility for incarcerated students.
ACE’s Mitchell said in a statement on the FAFSA simplification legislation that, “We applaud the bipartisan agreement to simplify the process of applying for federal student aid, which will make it significantly easier for students and families to complete the FAFSA form and increase the number of individuals who receive aid.” He added that, “The pandemic has jeopardized decades of hard-won progress toward increasing access to higher education. This important legislation will support struggling students and families in coming years by simplifying and expanding the federal student aid system, ensuring millions more students will receive financial aid in the future.”
The end-of-the-year, final hour COVID-19 relief and FY 2021 package comes just in time to avert a government shutdown, although lawmakers had to pass several stopgap measures to do so. It also contains other provisions that will affect higher education, such as tax provisions that impact all employers, including an expansion of the employee retention credit and a continuation of a payroll tax subsidy for employers offering workers paid sick leave. As ACE and others have the opportunity to study the final legislative text there may come to light additional tax provisions that affect students, families, and institutions.
Congress Approves Protect the GI Bill Act: In a measure separate from this week’s FY 2021 spending bill and COVID-19 relief package, the House last week cleared a 350-page package of veteran-related legislation, H.R. 7105, the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020. Included in this package is a modified version of the Protect the GI Bill Act (H.R. 4625), legislation designed to protect student veterans and help ensure that they can use their GI Bill benefits to complete a quality postsecondary education. The Senate had already approved the measure, so it went to the White House for the president’s signature.
There were higher education community concerns with parts of the original version of the legislation, which was approved by the House in fall 2019, and some improvements were made in response.
Despite knowing further changes in the bill were unlikely, ACE, on behalf of other associations, sent letters Dec. 3 to the House and Senate committees to reiterate remaining concerns. In particular, the bill still includes language that would make institutions responsible for paying back to the Department of Veterans Affairs any overpayment of tuition and fees when a student drops a class or withdraws from a program late in the term.