Build Back Better’s Higher Ed Priorities Face Uncertain Path in 2022

By Hugh T. Ferguson, NASFAA Senior Staff Reporter

President Joe Biden’s Build Back Better agenda will face an incredibly challenging path forward in the new year along with key higher education investments that may no longer have a route to enactment under the current legislative landscape.

Following the announcement from Sen. Joe Manchin (D-W.V.) that he could not vote in favor of the Build Back Better Act, the course of action on a large-scale reconciliation package remains fraught with challenges.

Democrats are still pushing forward with the process, with House Speaker Nancy Pelosi (D-Calif.) indicating that negotiations on the framework will continue, and Senate Majority Leader Chuck Schumer (D-N.Y.) pledging that the chamber will consider the Build Back Better Act “very early in the new year.”

“While I am extremely disappointed that this bill has been stalled in the Senate, I will not stop working to lower costs for families and create good-paying jobs for our nation’s workers. Our constituents sent us to Congress to get things done,” said Rep. Bobby Scott (D-Va.), chairman of the House Committee on Education and Labor. “In the days and weeks ahead, we must find a path forward to deliver for the American people.”

However, without Manchin’s backing no reconciliation package will be able to overcome the majority threshold needed in the Senate.

Here are the key higher education provisions most at risk with the potential demise of a second reconciliation bill:

  • Pell Grant increase: Funding to increase the maximum Pell Grant by $550 for students enrolled at public and non-profit institutions from 2022-23 through 2025-26.
  • Title IV eligibility extended to DACA students: Individuals enrolled in the Deferred Action for Childhood Arrivals (DACA) program would be eligible for Title IV aid.
  • Taxability of Pell eliminated: Pell Grants would be excluded from gross income in the Internal Revenue Code, and therefore would no longer be taxable.
  • Means-tested benefits recipients and automatic -$1,500 Student Aid Index: When the FAFSA simplification changes included in the Consolidated Appropriations Act of 2021 are fully implemented in 2024-25, and through the 2029-30 year, means-tested benefits recipients will automatically receive a -$1,500 Student Aid Index (SAI).
  • Phase-out of excise tax on investment income of private institutions: The amount of excise tax would be reduced for private institutions by a percentage that accounts for the amount of qualified financial aid awarded by the institutions compared to tuition and fee charges. 
  • Completion grants scaled down: $500 million in funding for a large new grant program to strengthen student retention and college completion efforts.
  • HBCU, TCU, & MSI Investment Increased: $6 billion for historically Black colleges and universities (HBCUs), tribal colleges and universities (TCUs), and minority-serving institutions (MSIs) to award need-based financial aid to low-income students (including emergency financial aid grants), as well as an additional $3 billion to improve research and development infrastructure at these institutions.

2022 and the Legislative Agenda 

If Manchin cannot get on board with another framework for a reconciliation bill, advancing legislation will be far more difficult and require a 60-vote threshold in the Senate.

In the weeks ahead if there is no movement on reworking Build Back Better, the congressional focus will likely shift to the annual appropriations process, where Republicans have more leverage in crafting provisions that could get tacked onto another continuing resolution or an omnibus package.

What We’re Watching 

Does the new legislative landscape and potential demise of Build Back Better prompt the administration to test its executive authority? Progressives, infuriated by Manchin’s announcement, are doubling down on their calls for the White House to commit to using executive authority in a way to deliver on their policy priorities, pointing to the end of the federal student loan moratorium as a potential place for action.

The student loan moratorium was slated to expire at the end of January, with the administration reminding borrowers that they will need to start making payments after a nearly two-year hiatus. The administration has continually committed to restarting the repayment system come February.

However, the White House, citing the recent spike in COVID-19 cases and additional economic concerns imposed by the pandemic, on Wednesday further extended the payment pause through May 1, raising questions into how the administration will implement a communication plan that will accurately inform borrowers of the need to re-enter into repayment.

The 90-day extension will provide borrowers more time to prepare for the resumption of payments and will allow the Biden administration to assess the impacts of the omicron variant, the White House said in a statement announcing the extension.

“As we prepare for the return to repayment in May, we will continue to provide tools and supports to borrowers so they can enter into the repayment plan that is responsive to their financial situation, such as an income-driven repayment plan,” said Education Secretary Miguel Cardona. 

Stay tuned to Today’s News as we follow the latest developments concerning higher education.


Publication Date: 12/23/2021

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