Jonathan Fansmith: Hello, and welcome to dotEDU, the higher education policy podcast from the American Council on Education. I'm your host, Jon Fansmith, an assistant vice president of government relations here at ACE, and joined by my delightful co-hosts, as always, Sarah Spreitzer and Mushtaq Gunja. How are you guys doing?
Sarah Spreitzer: Wonderful on this rainy Washington DC day. I don't think spring is quite here yet.
Jonathan Fansmith: It does not feel that way.
Mushtaq Gunja: I'm wearing a sweatshirt inside the house, which is not because I absolutely need it. I'm just trying to protest something and somebody, and I feel like maybe I can turn the tides if I'm carrying those signs. How are you, Jon?
Jonathan Fansmith: I am good, but before we get into how I'm doing... which, as you guys both know, I could talk for a while about how I'm doing... we are joined up front by a special guest host, who is going to join us for the entirety of the episode, in a little bit of a break from our regular format. This is somebody who I love working with and have worked with for... I don't want to say a long time. That makes us both sound old. But long enough. My friend, and our colleague, Stephanie Giesecke, who is the senior director of budget appropriations at the National Association of Independent Colleges and Universities. Hi, Stephanie.
Stephanie Giesecke: Hi, Jon. Thank you for having me.
Jonathan Fansmith: Oh, you're very welcome. Thank you for coming on.
Stephanie Giesecke: This is a unique opportunity.
Jonathan Fansmith: You'll see how unique over the next half hour.
Sarah Spreitzer: Jon, since producers will likely send us a note in a second, could Stephanie give us a short description of what NAICU is and who they represent?
Stephanie Giesecke: Sure. Yes, NAICU, or, as Jon said, the National Association of Independent Colleges and Universities, we represent the presidents of private nonprofit colleges and universities. We have about a thousand members of a possible pool of about 1,300. So I think we're doing pretty good in representing the sector. And we represent a wide variety of very diverse sector of institutions, large and small, a lot of name brands, a lot of institutions that folks know, but a lot of very small institutions, religious affiliated schools, women's colleges, those types of thing. That's who we are.
Jonathan Fansmith: And you did mention it's private nonprofits, right?
Stephanie Giesecke: Private nonprofits. That's right. That's right.
Jonathan Fansmith: And I totally interrupted, but how are you doing, Stephanie? How are things going? Sarah's already talked, Mushtaq's talked about, you're here in DC with us. It's miserable, and cold, and gray, and rainy. But how are doing besides the weather?
Stephanie Giesecke: Yeah. I'm doing well. I think we're getting used to this hybrid work system of a couple days in the office and a couple days at home. I'm in the office today, which makes it feel more formal and more organized than working at home. But it's a good balance. Getting used to it.
Jonathan Fansmith: Yeah. I will say... And you know this. We were chatting about this before we started recording. But I feel especially happy to be inside today because apparently, if we were on Capitol Hill, we'd have to be dodging rabid attack foxes, which, as of the news this morning, foxes are attacking staffers and living on the Capitol grounds, which is not news you often hear, right?
Sarah Spreitzer: No, they didn't-
Stephanie Giesecke: Never a dull moment.
Sarah Spreitzer: They didn't say rabid. They just said aggressive. So who knows, maybe the foxes are there for a fly-in day, and they're really trying to deliver their message to Congress.
Jonathan Fansmith: The fox lobby has some points they're trying to make.
Sarah Spreitzer: Yeah. Right.
Stephanie Giesecke: Mm-hmm (affirmative).
Mushtaq Gunja: We finally got rid of the trucker convoy, and we got it replaced with a bunch of foxes.
Jonathan Fansmith: And I certainly would-
Stephanie Giesecke: That's way, way more manageable, I think.
Jonathan Fansmith: Well, as somebody who walks across the Capitol grounds on a regular basis, I'm now going to have to keep my head on a swivel for a fox coming after me, which would be a delightfully comic image for anyone watching me run from a fox.
Mushtaq Gunja: So, friends, we're recording on a Tuesday. And I just noticed sort of come across my newsfeed, the president is about to, or maybe has already, sort of announced the student loan moratorium will be extended until August 31st, I believe. Jon, Sarah, Stephanie, do you have a heads-up on this? I feel like this is the first I am hearing of this. I mean, sort of it makes some sense. I had some sense that this was going to get extended again, but August 31st seems like a sort of an interesting time.
Jonathan Fansmith: Yeah. The timing. And we've talked about this before. The timing makes literally no sense to me. Extending it, I think was kind of an open secret for the last month. There had been reports that the White House staff had said publicly that they were contemplating it. They were looking at loan forgiveness. We'd been hearing rumors for a while about the possibility of some of the changes to the loan programs that were being talked about in the negotiated rulemaking at the end of last year being rolled out as an administration priorities. It would make sense to do that when they do this. The timing just doesn't make any sense, because why would you only push it back to August 31st?
And this is purely political, right? This is not about good administration of the program. But you have the midterm election coming up. It seems like having people turn back on, and start repaying, their loans as of September 1st, a couple months before they go to the polls, in some cases when they're voting early, is not really a great political strategy. So, we said this when they bumped it to May the first time. I'm not sure this will be the last extension of that pause. I just don't see the upside of doing it when they're proposing to do it to.
Sarah Spreitzer: Well, and people are still asking, right, for forgiveness. This is totally separate from loan forgiveness. And I had thought that the White House had indicated that they were likely to announce an extension, but then also that forgiveness, or some type of forgiveness, was still on the table.
Jonathan Fansmith: Yeah. I mean... and encourage the rest of you to weigh in, too... it clearly seems like the Biden administration does not want to do forgiveness, right? There is a pretty active and loud range of support. You see it from prominent Democrats in Congress, Senator Schumer or Senator Warren. I think Senator Schumer does a regular "Today would be a great day to forgive student loan debt" post. The volume is only increasing. And I think when you start looking at this idea about actually going the other direction, starting repayment, the volume of that's only going to get louder and louder. It does not seem like that's in the plans. Other ways of dealing with students who may struggle if you turn repayment on certainly seem to be contemplated, but I don't think we're any closer to forgiveness.
Stephanie Giesecke: No, I don't either. And it seems like the kind of battle of the bumper stickers, right? You've got the extension of the moratorium, the "Are we going to have forgiveness or not?" And it could be, I mean, I'm just crystal ball guessing here, that the next thing they want to try and roll out is the forgiveness piece. The problem with that is the cost. It's just so expensive to forgive student loans. And I think it's that balance, too, between you're helping a student who's already out of college versus helping a student who's either trying to go to college or in the middle of going to college. That's just what it made me think of when you brought up the midterm elections and these different pieces that are kind of big-picture headlines. And-
Jonathan Fansmith: Yeah. And especially... Oh, sorry. Go ahead.
Stephanie Giesecke: No. That was it.
Jonathan Fansmith: One of the things the administration has been really touting... Excuse me... on the forgiveness front is this idea, the Public Service Loan Forgiveness, the waiver that they've done to expand the authority to do that. Hundred thousand borrowers, it looks like, will be getting PSLF sometime in the very near... have already received it or will receive it sometime in near future. Another pool of borrowers beyond that for PSLF. They've done forgiveness for people with permanent disabilities. They've done forgiveness for veterans. There's been lots of sort of targeted forgiveness things that stops just short of this universal approach.
And I think, to your point, Stephanie, it's incredibly exciting. It's a $1.7 trillion portfolio of loans. Whatever universal approach you take, even if it's not everybody's loan is forgiven, is a lot of money. And if the administration doesn't want to do it, it seems really hard to believe Congress is going to find that money, especially for something that, as soon as it's done, students are going to enroll in the college in the summer, in the fall, and start incurring more debt. So you haven't really used that money to address the underlying problem. You've used it in a way that has a sort of time-limited benefit.
Mushtaq Gunja: Yeah. Jon, I'm just going to say, I guess I might just slightly disagree. Maybe it's not even a disagreement. But I might just slightly have a different take about the August 31st time. You said it made no sense. I haven't seen the official reporting come amount yet, but I would assume that what they will say is that the department needs more time to make sure that their servicers are ready to be able to get borrowers up for repayment. I'm going to take them at their word, right? Because you're probably right, Jon, that it would just make more sense to push this till December 1st instead of August 31st. There's got to be some reason to do it. I will say, in the meantime, right, as you just noted, I mean, all across my Twitter feed are significant numbers of people who are getting their loans forgiven under PSLF.
So this momentum of actually correcting the PSLF stuff, having loans forgiven under the new waiver authority, but also just making the program work, is actually sort of a big deal. And I feel like it's actually affecting real borrowers, and at some point maybe even a lot of them. So yeah, it's not full forgiveness, but I wonder if the political winds sort of change a little bit or maybe the conversation changes, if the people who should have gotten their loans forgiven, or can get their loans forgiven under these existing authorities, actually get them forgiven sometime in the next few months, because it does feel to me like the momentum on the forgiveness side is rolling a little bit. So I don't even know if that's a disagreement exactly. But there has to be some reason for doing this in this piecemeal way. Having been over there, I can sort of understand that one of the reasons that they might be pushing it to some intermediate step is to actually make the argument sort of line up with the facts on the ground, vis-à-vis the servicers.
Jonathan Fansmith: And I should say, Mushtaq, that as a thoughtful, and measured, and reasonable point. And I was purely speaking on the political dynamic of 40 million borrowers reentering repayment. So, as usual, you are thoughtful and measured. I'm knee-jerk and reactionary. So that's really helpful.
Mushtaq Gunja: I mean, Jon, I guess I would say the point that you and Stephanie make about that how expensive this is going to be, it is really interesting. It actually leads me to a question I had for all three of you about sort of the president's budget, because... I think the budget was released last week. The weeks all blur together. And the first thing, of course, that I was looking at was the Pell number. So, Stephanie, I know that NAICU and ACE have spent a lot, a lot of time thinking about the Pell program, thinking about doubling Pell. Stephanie, what was in president's budget vis-à-vis Pell?
Stephanie Giesecke: So, the president's budget has a big increase for the Pell Grant maximum, at $1,775 over fiscal '22 levels. It would bring it to $8,670 for next year, for the '23-'24 award year. Speaking of bumper stickers, the president in his campaign talked about doubling Pell. And that has become our number one bumper sticker at NAICU, and never really had a target date for it. But this budget, for the first time, they put a target date of by 2029 to double the Pell Grant, which, kind of back of a envelope math, if they did a thousand dollar increase a year, would get them there.
But of course, the president can propose this, but Congress has to enact it. And the budget proposes that 1,775 increase in kind of two chunks of money, the Pell Grants funded through discretionary funds, which are the appropriated funds, and mandatory funds. And that's kind of how it exists today for, what, like, oh, past 10 years or so? But this budget proposes 500 on the discretionary side and 1,275 on the mandatory side. Two pieces of legislation that you need to get passed in Congress to achieve that increase. So that will keep us busy, trying to advocate for at least that amount. I'll stop there.
Jonathan Fansmith: Yeah. And Stephanie, I think it's important to note that it's two different things, to get to the president's budget, because the $500... the discretionary side, for people who don't follow federal budgeting... that's sort of like the regular way Congress funds. The annual bills where they say, "This is how much we're giving to different programs." And this year, I think we should, actually, probably talked about the omnibus just a little bit.
Stephanie Giesecke: That's right.
Jonathan Fansmith: The omnibus, the last big spending bill that finalized this year's spending, had $400 increase for Pell. So a $500 increase after Congress just gave a $400 increase. That seems very achievable, hopefully likely. $1,275 for Congress needs to go on the mandatory side, which is sort of a special, extraordinary way of Congress providing this funding. That was what they talked about last time in Build Back Better for Pell Grants, doing that. And ultimately, that was taken out of... Well, Build Back Better itself never went anywhere, but the Pell money kept dropping, and dropping, and dropping that was in that bill. I'd be curious to hear what you think. I mean, is $500 likely? Is 1,775 likely? What can we reasonably expect, looking forward, that they might actually do on Pell?
Stephanie Giesecke: I think, again... Stephanie's crystal ball, right? It's funny. As you were saying at the introduction, Jon and I have been working together on Pell and other student aid programs for a very long time. And during that time, a four or $500 increase would have been reason for popping champagne bottles and throwing parties. And now we're kind of wondering, "Hey, can we get it again next year?" And I do think that, over this time, the program continues to have bipartisan support for the existing way that it functions for helping low income students. And I think an additional $500 in fiscal '23 is totally doable and totally possible. I think both sides of the aisle on the appropriations committee are... I've always said appropriators are appropriators, no matter which party they're in, and they like funding the programs that they support and that they feel help their constituents. So I think a $500 increase is doable and achievable, and something we should be proud of if we get it.
I think the additional 1275 is, as you've said, it would take the same type of legislation like Build Back Better, where you're going to need bipartisan support. You're going to need 60 votes in the Senate. And I mean, you can't get 60 votes to declare it Wednesday. So I don't know how that's going to go.
Sarah Spreitzer: Yeah. I always enjoy this kind of hopeful period of appropriations, right, where we start out with the president's budget request. And Jon, you said the annual appropriations process, right? Has it actually been annual for like the past 10 years at all? I mean, it seems to me, every year it's different. It gets pushed back further and further. Do you guys have any predictions about what's going to happen this year, with the midterms coming up? And we're kicking off approps, but there's a lot to do in a very short time to do it, this year.
Stephanie Giesecke: I think we are full speed ahead until August.
Sarah Spreitzer: Okay.
Stephanie Giesecke: And I think from the advocacy perspective, we will be asking our presidents to weigh in on funding for the student aid programs. ACE, I know you guys work on a broader portfolio of funding priorities in the higher ed community at large. I think we will all be advocating for increases in the programs that we care about. And you look at the makeup of Congress right now. And I would say that like they did this past year, I think the House could probably write its 12 bills, maybe get most of them passed through the House, and the Senate won't even be able to start. That's kind of what we saw this last year. And by the time you get to August and they have recess, I think it's midterm elections all the way, and we finish this in a lame duck session, or, like we did this year, the final bill was enacted on, what, March 11th or something like that?
Jonathan Fansmith: Yeah. Later, I think, actually. Right? No, and I appreciate your optimism that they'll keep working until August. I've always said, I think probably late June, early July is when they'll swing to full campaign season. So we'll see. And Sarah, it's a really good question, too, because the other thing, as Stephanie pointed out, we are so late in this process. I mean, it kind of screwed up the president's budget request. They didn't even have last year's numbers when they put it together. So you're looking at a... This huge. I mean, if anyone's actually ever looked at the president's budget request, it's a phone book. I mean, it is a multi-thousand page document. And this entire document was using two-year-old numbers because that's what they had to go, with the processes, and they have a shorter window to be on time.
In some ways, it's a self-fulfilling prophecy. If you keep pushing it back and pushing it back, then the following year, you have less and less time to work. And so all these things that you would have been doing, where advocates like Stephanie and I go in and say, "This is where it's at. This is where we think it should be. Here's what you're working with," all those conversations start two months later, three months later. And it just makes it so much more difficult. It's a tough environment. But Stephanie, while we have you on the president's budget, Pell was, obviously, very good news, both the public declaration of support for doubling Pell and the time frame for doing that, the big request for it. What do we think about the rest of the budget? I mean, this president requests on everything of interest to us, but particularly around student aid and other things. What did we think about the rest of the president's budget request?
Stephanie Giesecke: I'm happy with the president's budget, with the increase in Pell, with so money in Pell. It's a more than $30 billion program, kind of depending on the day and which numbers we're using, but let's call it 30, which is... The total Department of Education budget on the appropriated side is $88 billion that he requests. 24 of that's Pell. The administration could have said, "We did this huge ask on Pell. We're not going to do anything else on the other programs." But they kept SEOG, which is the Supplemental Educational Opportunity Grant, which is up to $4,000 in additional grant aid for low-income students. It's a very, very, very important program to low-income students. They kept Federal Work-Study. They did keep them level funded, when you kind of fix the math.
We would support increases for those programs. They have been, I'd say, underfunded over the last 10 years. The president's budget also has big increases for TRIO and GEAR UP, which Nike supports, the community supports. And it has increases across all of what we call the Strengthening Institutions programs in Titles III and V, which are the HBCU programs, the historic... Excuse me... the Hispanic-serving institutions programs, other Minority-Serving Institutions programs, and the Strengthening Institutions Program for community colleges and low-resource institutions. So kind of across the board, I'd say there's a healthy funding request. And I think, as advocates, we appropriately ask for more.
Sarah Spreitzer: Stephanie, we have seen administrations, though, sometimes low-ball the budget request, knowing that Congress will make up that difference. And I wonder if there is some of that in this budget request, because within the Labor-HHS-Education spending bill, which is the one the education comes out of... The National Institutes of Health is also in that spending bill, which is also a big-ticket item. And in the budget request, President Biden requested a $4 billion increase for NIH, which is great, but $5 billion of the NIH budget would be directed to this new ARPA-H. And so you're actually looking at a cut, across the board, for the NIH institute. I don't remember when I've ever seen a cut to NIH before. And especially when the president has said that they're going to prioritize cancer research, to then do a cut to the National Cancer Institute is pretty surprising. And so I kind of took that to be, "We know Congress won't actually cut the NIH, especially during a pandemic." Do you think there's some of that going on, on the education side?
Stephanie Giesecke: Gosh, I hadn't thought about it. From the student aid side, maybe not so much, but then there's also, kind of within the full education budget, there's a big, like triple, increase proposed for Title I funding. That is partially on the mandatory side, but that program does not have kind of underlying mandatory legislation, the way the Pell Grant program does. That's, I'd say, an aspirational request on the president's side. Yeah.
Jonathan Fansmith: Yeah. I always think this mandatory request in the president's budget is sort of like it's signaling, "We want to do something here, but if it doesn't happen, it's Congress's fault, not ours." Right? So, I know we're running a little bit low on your time, and I know that your time is valuable, Stephanie. But one thing that is happening, as we sit here today, it was announced last night that the Senate had reached a deal on providing $10 billion in new COVID support for the administration. Normally, not something we would be talking about, except for the fact that one of the offsets, one of the ways they're paying that $10 billion, is by taking $500 million from the Higher Education Emergency Relief Fund, the money that was provided by the COVID relief bills to students and institutions. I know we've all been sort of trying to figure out what the impact of that would be. Any initial thoughts you want to share with people about what's happening there and what that might mean for campuses?
Stephanie Giesecke: I think I would start by saying that the $10 million is for public health purposes nationally, and that it is not intended to include any additional emergency relief fund for students or institutions. We continue to get a lot of questions like that from our members. "Is there going to be another bill for additional HEERF money?" And there's just not. We have hit our max on that, I think. The 500... Excuse me... $500 million recision as part of the offsets to pay for the $10 billion relief, our understanding, from talking to folks at the Department of Education and with Congressional staff who've been working on the bill, is that what they've done government-wide, not just Department of Ed but government-wide, they've looked at any unused COVID relief funds that are sitting in agencies and are not allocated, are not tagged to be allocated, have not been applied for, that are truly in reserve from those previous COVID relief bills. And that the chunk that's coming from Department of Education, from HEERF, is that $500 million.
There are a couple of tranches of funds that are out from HEERF for the [A3 00:26:16] section that was institutions that kind of got caught up in red tape, bureaucratic red tape, and didn't get their allocations at first. Those will still go out. There's also competition for institutions that have been particularly severely hit by financial implications of COVID. Those will still be funded. So we've just been, multiple times, reassured that this is not coming from any institutional allocation. There's no clawback from any existing HEERF grants. So that's a lot of words to say that it's really just extra money that hasn't been used.
Jonathan Fansmith: Yeah. We keep getting reassured that if you're an institution, you have an allocation, you will not lose any of that allocation as part of this recision.
Stephanie Giesecke: Correct.
Jonathan Fansmith: It's certainly a good point and should put some people's minds to ease about what might happen. The flip side of that, of course, is it's still $500 million. If it was staying with the Department of Education, as they did with the previous rounds of relief where they had unspent money, they used it for other purposes that benefited campuses and benefited students. So I think-
Stephanie Giesecke: Yes. They rolled it back into additional grants. You're right.
Jonathan Fansmith: Yep.
Stephanie Giesecke: You're right.
Jonathan Fansmith: I think the concern here is less what will be the immediate impact on institutions now, and more... Well, actually, first and foremost, why are they going after higher ed, when there's a whole lot of other places where they could find funding, even if you agree with the idea of fully paying for bills, which is sort of something Congress doesn't usually do? So I don't know why it has to be applied here, but [crosstalk 00:27:57]-
Stephanie Giesecke: It's those 60 votes that they need.
Jonathan Fansmith: That's it.
Stephanie Giesecke: They got to have 60 votes for this one.
Jonathan Fansmith: There you go. But so something to keep an eye on. Again, this is a deal the Senate has agreed to. There's already been a number of prominent Democrats in the House who have said they have problems with the fact that this is only for the US. It doesn't include global assistance. They don't like the offsets. They don't like the level of it being fully offset, that in some of these cases, they'd rather spend some money, even if they offset some of it. So we'll see where it goes, but it does seem, with the administration's strong support, this is likely to move forward. And obviously, NAICU and ACE will keep you posted on that. Follow us on our websites and our various means of communication, and we'll keep everyone updated. Stephanie, I want to thank you for taking the time to join us today. I get to enjoy your company a lot. Not everybody else does. So hopefully we're expanding your range of influence a little bit. And it was great having you on.
Stephanie Giesecke: Thank you for having me. This was fun.
Jonathan Fansmith: And thanks, everyone, for listening. We'll come back for our next episode.
Sarah Spreitzer: As always, podcast friends, you can check out earlier episodes and subscribe to dotEDU on Apple, Google Podcasts, Spotify, Stitcher, or wherever you listen to your podcast. For show notes and links to the resources mentioned in the episode, you can go to our website at acenet.edu/podcast. And while there, please take a short survey to let us know how we're doing. You can also email us at podcast acenet.edu to give us suggestions on upcoming shows and guests. And a very big thank you to the producers who helped pull this podcast together. Laurie Arnston, Audrey Hamilton, Malcolm Moore, Anthony Trueheart, Hisani Stenson, and Fatma Ngom. They do an incredible job, making this happen and making Jon, Mushtaq, and I sound as good as possible. And finally, thank you so much for listening.