Cardona Touts Biden’s Budget Investments, Pledges to Protect Student Loan Borrowers

Related Topics in the Ref Desk: Cost of Attendance; Pell Grant

By Hugh T. Ferguson, NASFAA Staff Reporter 

As Congress embarks on the annual appropriations process, the House Appropriations Labor, Health and Human Services, Education, and Related Agencies (Labor-H) Subcommittee heard testimony from Education Secretary Miguel Cardona, which touched on a number of higher education investments, as well as the department’s process for addressing the federal student loan repayment system.

During Wednesday’s hearing, which was Cardona’s first as the confirmed leader of the Department of Education (ED), the conversation largely centered on President Joe Biden’s discretionary funding priorities, with $102.8 billion requested for ED — a $29.8 billion or 41% increase over the 2021 enacted level.

Biden’s discretionary budget request includes an increase of $400 to the maximum Pell Grant award and also gives individuals enrolled in the Deferred Action for Childhood Arrivals (DACA) program, known as “Dreamers,” access to the program. Democrats largely praised the investments in response to the pandemic while Republicans cited concerns over the costs.

Prior to Cardona’s testimony, the subcommittee held a hearing on the needs of community colleges, which largely garnered bipartisan praise for those institutions' affordability and access.

Rep. Rosa DeLauro (D-Conn.) who chairs both the subcommittee and the full appropriations committee, lauded the investment in community colleges, which she said are “the cornerstone of education and training, especially for non-traditional and disadvantaged students.”

The hearing also highlighted a potential for bipartisan compromise when it comes to investments in Pell Grants, TRIO, and GEAR UP. Even so, Ranking Member Rep. Tom Cole (R-Okla.) was concerned at the size of the budget request following enactment of the American Rescue Plan Act.

“The level of proposed spending is simply unnecessary, irresponsible, and unacceptable,” Cole said. “A proposed 41% increase for the Department of Education in a single year will leave the next generation saddled with the highest national debt our nation has ever seen.”

NASFAA had submitted questions concerning impending changes to the FAFSA, but lawmakers did not focus their questioning on implementation issues. As the appropriations season goes forward, ED will need to consider how it will address major modifications to both the behind-the-scenes system at the Office of Federal Student Aid (FSA) and the user-facing form.

When presented with questions surrounding the student loan landscape, Cardona largely reiterated comments made earlier this week concerning issues with the Public Service Loan Forgiveness (PSLF) program and borrower defense, and that correcting barriers to access remains a top priority.

However, in Wednesday’s testimony Cardona gave more clarity to ED’s position in addressing the student debt issue.

“We really have to have a very broad look at how we're servicing students and how our policies are creating obstacles for students,” Cardona said. “I'm really eager to make sure that once Rich Cordray gets on board and we have our under secretary, and we really revisit all strategies including those to make sure we're giving the students the best opportunity to be successful, and go through college without having a huge debt burden when they graduate.”

Another issue Republicans raised centered around a recent article from The Wall Street Journal that cited an internal report requested by former Education Secretary Betsy DeVos that found the agency was miscalculating student loan program profits.

Cardona said the report did not meet ED’s standards and did not indicate whether the findings would be made available, but that he stood by his team’s decision to not validate the report. A number of Office of Management and Budget (OMB) staffers expressed concern over the accuracy of analysis coming from private-sector officials who do not have experience with the federal budgeting process.

Rep. Andy Harris (R-Md.) took umbrage at Cardona’s dismissal of the report. Harris, who himself admitted to not believing any media reports in general at first read, said he found this article to be a worrying sign.

In the discussion centered around investments in the Pell Grant program, Rep. Brenda Lawrence (D-Mich.) urged Cardona to consider an expansion of Pell Grant eligibility to students enrolled in graduate programs.

Cardona said that for some students, 16 semesters is not enough support and that more investment is needed to help break the cycle of poverty.

“The system needs to evolve to the needs of the student and not the other way around,” he said.

Rep. Mark Pocan (D-Wis.), who also serves on the House Education and Labor Committee, looked to get more details on ED’s stance when it comes to student loans and urged Cardona to consider agency action that could help borrowers renegotiate the interest rates on their loans.

“Nothing is off the table,'' Cardona said. “Yes, I am interested in looking at ways to provide easier opportunities for them to make college affordable.”

The White House’s full budget request is expected in the coming weeks.

 

Publication Date: 5/6/2021


Ben R | 5/6/2021 8:8:24 AM

The issue with Pell for graduate students is that it would turn traditional need analysis on its head. Virtually all graduate students who go from undergraduate to grad would be Pell eligible, since they are all independent and presumably have no earnings. This means those getting an MBA from Wharton would be treated the same as someone who comes from poverty.

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