Lawmakers on Wednesday evening released the text of their final fiscal year (FY) 2018 omnibus spending bill (award year 2018-19), which includes several unexpected victories for student aid programs and policies, including an increase to the maximum Pell Grant and an immediate fix for schools looking to share Free Application for Federal Student Aid (FAFSA) data with authorized scholarship providers. This bill provides an overall increase of $3.9 billion for the Department of Education (ED).
The FY 2018 bill provides for a $6,095 maximum federal Pell Grant award for award year 2018-19, a $175 increase from award year 2017-18. Last year the Senate Labor, Health and Human Services, Education, and Related Agencies Appropriations Subcommittee included only a $100 increase in its original draft FY 2018 bill, making the $175 increase in the final iteration an unexpected, but welcome addition. The increase in Pell will require ED to re-release 2018-19 Pell payment and disbursement schedules, since the initial numbers are now incorrect, and NASFAA will work with ED to ensure those schedules will be updated quickly. Importantly, the bill does not include any major cuts to the Pell Grant reserves, as proposed in President Donald Trump’s budget and in both the House and Senate draft spending bills.
In addition, the bill provides a $107 million boost for the Federal Supplemental Educational Opportunity Grant (FSEOG) program to $840 million, the largest increase in a single year in the program’s history and the first boost to funding since FY 2014. Further, the bill includes a $140 million increase for the Federal Work-Study (FWS) program to $1.13 billion, the first time since FY 2009 the program’s funding has surpassed $1 billion. These increases in campus-based aid will particularly benefit institutions with low base guarantee portions of their campus-based aid allocation.
TRIO, GEAR UP, and CCAMPIS see funding increases in the bill along with $5 million for a competitive grant program to support open textbooks.
Also included in the omnibus is a “fix” advocated for by NASFAA to address a FAFSA data-sharing issue that has plagued students, financial aid administrators, scholarship providers, and other entities for nearly a year. Last year, ED’s Privacy and Technical Assistance Center (PTAC) released verbal guidance on the sharing of FAFSA data. This guidance prohibited students from authorizing financial aid offices to release FAFSA information to student-approved outside entities that need this information in order to make financial aid awards. The FY 2018 spending bill includes a provision clarifying that an institution may, with explicit written consent from the student, share FAFSA information with scholarship-granting organizations or tribal organizations. This represents a major victory for the financial aid and college access communities who have been engaged on this issue for several months. Stay tuned to Today’s News for additional analysis of this provision.
The bill sets aside $350 million to allow Direct Loan borrowers who made 120 otherwise qualifying payments—but under an extended or graduated repayment plan instead of another approved plan—to qualify for loan cancellation under Public Service Loan Forgiveness (PSLF). Current law permits loan repayments made under extended or graduated plans to qualify for PSLF only in cases where the monthly payments made under those plans exceeded the monthly payment under the standard 10-year repayment plan. In this bill, the graduated or extended monthly payment amount could have been less than the monthly payment amount under the standard 10-year plan and would still qualify for forgiveness.
To be eligible, both the monthly payment the borrower made 12 months prior to applying for forgiveness and the most recent payment made at the time of the application for forgiveness would need to have been greater than the amount the borrower would have paid under an income-based or income-contingent repayment plan. An exception exists for borrowers who “demonstrate an unusual fluctuation of income over the past 5 years.”
The bill instructs ED to develop a simple method for borrowers to apply for forgiveness under the provisions in the bill within 60 days of its enactment. Funding would be used to forgive loans on a first-come, first-served basis until exhausted.
An additional $2.3 million is approved for use by ED for outreach to borrowers who would otherwise qualify for PSLF but are enrolled in an ineligible repayment plan, as well as for outreach efforts and improvements to the employment certification process.
In addition, the bill includes the text of the “Children of Fallen Heroes Scholarship Act,” which would allow students who are younger than 24 years old or enrolled at an institution of higher education at the time of the death of a parent or guardian who died in the line of duty as a police officer, firefighter, or other public safety officer to receive the maximum Pell Grant award.
Under this provision, after verifying that a student is eligible for the adjustment, a financial aid administrator can reduce the student’s expected family contribution to an auto-zero, making him or her eligible for the full Pell Grant amount.
The bill also places several requirements on ED, including quarterly reports on borrower defense claims and guidelines on how ED issues student loan servicing contracts, and requires FSA to contract with more than one servicer, among other requirements, as part of its “Next Generation Processing and Servicing Environment.”
The spending package passed through both the House and Senate on Thursday, just before the approaching government shutdown scheduled for Friday, March 23 at 11:59 p.m., and now heads to Trump's desk for his signature.
Article Updated: 3/23/2018
Publication Date: 3/21/2018