Congress Introduces Massive Fiscal Year 2022 Spending Agreement With $35 Million Boost to Student Aid Programs, Pell Grant Increase

By Hugh T. Ferguson, NASFAA Staff Reporter

Update: On March 9 the House passed the Labor-HHS-Education portion of the omnibus by a vote of 260-171-1. On March 10 the Senate cleared the spending package by a vote of 68-31.

Congressional appropriators, in the early hours of the morning on Wednesday, unveiled an omnibus spending package in an effort to settle negotiations for the current fiscal year’s budgeting cycle. The massive, $1.5 trillion package would allocate $76.4 billion to the Department of Education (ED) and its programs, a $2.9 billion boost from the fiscal year (FY) 2021 enacted level.

Specifically, the spending package contains $24.6 billion for federal student aid programs, including a $400 increase to the maximum Pell Grant award, bringing the total to $6,895 for the 2022-23 award year. According to congressional leaders this allocation serves as the largest increase in the maximum award in more than a decade.

“It is a relief to see lawmakers come to a compromise on the federal budget, which will allow the Department of Education to release updated Pell Grant schedules and in turn give financial aid offices the information they need to deliver timely information on aid to students,” said NASFAA President and CEO Justin Draeger. “It is also encouraging to see Congress commit to increasing funding for this indispensable student aid program, which helps millions of students each year access postsecondary education. Still, we continue to urge lawmakers to work toward doubling the maximum Pell Grant, restore its purchasing power for low- and moderate-income students, and make up for decades of deferred investment.

While the Pell Grant increase is encouraging, the bill also rescinds $1.05 billion from the program’s reserve, more than double last year’s rescission.

The measure builds upon efforts to double the annual maximum Pell Grant to $13,000 in order to help more students earn a degree. Additional investments in the program could be made through other legislative vehicles in the months ahead.

Campus-based aid programs would also see boosted spending in the appropriations package, with $895 million allocated for the Federal Supplemental Educational Opportunity Grant (FSEOG) program, an increase of $15 million above the FY 2021 enacted level, and $1.21 billion allocated for Federal Work-Study (FWS), an increase of $20 million above the FY 2021 enacted level.

In addition to the increases in federal student aid funding, the bill provides $2.1 billion for career, technical, and adult education, $61 million above the FY 2021 enacted level, and an additional $3 billion for higher education programs, $452 million more than the FY 2021 enacted level. Included in this $3 billion is:

  • ​​$885 million to support minority-serving institutions (MSIs), $96 million more than the FY 2021 enacted level

  • $1.14 billion for Federal TRIO programs and $378 million for GEAR UP, $40 million and $10 million over FY 2021 spending levels, respectively

  • $59 million for Teacher Quality Partnerships, a $7 million boost over FY 2021

The agreement also allocates $76 million for the Fund for the Improvement of Postsecondary Education (FIPSE), $8 million of which would be used for competitive grants to institutions to "support programs that address the basic needs of students and report on best practices." In addition to prioritizing institutions with at least 25% Pell Grant recipient enrollment, at least 25% of the grants must go to community colleges and another 25% must go to four-year historically Black colleges and universities (HBCUs), Hispanic-serving institutions (HSIs), and other MSIs. Recipients can use grants to fund basic needs programs that provide students with access to resources such as secure housing, free or subsidized food, and on-campus child care. Funds can also be used to conduct outreach to encourage students to participate in such programs, help students access public assistance programs, and collaborate with community-based organizations.

The legislation also includes language dictating the requirements for ED related to federal loan servicing, including appropriations for just over $2 billion for expenses related to the administration of the federal loan program. The text reflects nearly exactly the language from the Consolidated Appropriations Act of 2021, including important provisions such as allowing borrowers seeking to consolidate their loans choose their servicer from those who had contracts renewed prior to October 2017, and requiring new loans to be allocated to servicers on the basis of their past performance compared to all loan servicers, utilizing established common metrics, and on the basis of the capacity of each servicer to process new and existing accounts. Additionally, ED must reallocate accounts from servicers for recurring non-compliance with Federal Student Aid (FSA) guidelines, contract requirements, and applicable laws, including failure to inform borrowers of available repayment options — something that servicers have come under fire for in the past. The bill also requires ED to provide quarterly briefings to various congressional committees on its progress related to servicing contract solicitations and to provide expanded aggregate data on student loan and servicer performance.

ED would also receive $2.3 million for outreach to Direct Loan borrowers who may intend to qualify for Public Service Loan Forgiveness (PSLF). The legislation includes language requiring ED to conduct specific outreach to borrowers who have made 120 otherwise qualifying payments under a non-qualifying repayment plan to encourage them to enroll in a qualifying plan. ED would also be required to communicate the full requirements of PSLF eligibility to all Direct Loan borrowers and to improve the filing of Employer Certification Forms (ECFs), including creating an option for all borrowers to complete the ECF process electronically on a centralized website. 

ED would also receive $25 million, to remain available until expended on a first-come, first-served basis, to grant PSLF to borrowers who would otherwise qualify for PSLF aside from having made some or all payments under non-qualifying graduated or extended repayment plans with monthly payments of less than what they would have paid under the standard 10-year repayment plan.

The bill also includes relief for institutions located in economically distressed counties that were impacted by Hurricane Matthew and that are at risk of loss of Title IV eligibility due to high cohort default rates.

Finally, the bill includes several changes to the FAFSA Simplification Act, which was signed into law in December 2021 as part of the Coronavirus Response and Relief Supplemental Appropriations Act. A separate article detailing those changes also appears in this issue of Today’s News.

Expect Congress to move quickly on teeing up this bill for votes in both chambers due to leadership’s agreement on the bill’s parameters. In order to keep the government open, a spending bill will need to be enacted before the current spending levels lapse after Friday, March 11.

Within the proposal is also another continuing resolution that will keep the government operational through March 15. This short-term extension, which is being considered in tandem with the omnibus, is needed to ensure that the Senate can comply with parliamentary procedures and clear the bill, which will likely take longer than the current deadline of March 11.

If there is a snag with a large swath of members being unable to agree to a minor provision within the entirety of the more than 2,000 pages of bill text, the process could fall apart and force members to grapple with further short-term continuing resolutions that would extend government funding to another agreed upon deadline. Slight changes to the originally introduced text are expected while leadership tinkers with some more contentious components of the bill, such as the pandemic relief provisions, though these changes are highly unlikely to cause changes within the higher education funding components of the bill.

As negotiations get further into the fiscal year, failure to reach an agreement could result in the continuation of funding levels from the previous fiscal year.

 

Publication Date: 3/10/2022


Sarah F | 3/11/2022 9:27:19 AM

So, when I read the final text of the bill, it says the maximum pell grant for the 2022-23 award year is $5835. Did this instead get cut at the last minute or am I missing something?

David S | 3/10/2022 5:40:33 PM

Not enough, but it's a start. And bonus points for that euphemism Justin..."deferred investment."

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