Congress Unveils Sprawling Fiscal Year 2023 Spending Bill With $500 Maximum Pell Grant Boost

By Hugh T. Ferguson, NASFAA Managing Editor

Congressional appropriators early on Tuesday formally unveiled their $1.7 trillion package that would fund the government for the remainder of the fiscal year 2023 budget cycle. Lawmakers are expected to work throughout the week to pass the bill ahead of the December 23 spending deadline and fund the government through Sept. 30, 2023.

The massive appropriations bill would allocate $79.6 billion to the Department of Education (ED) and its programs, a $3.2 billion boost from the fiscal year (FY) 2022 enacted level. Specifically, the spending package contains $24.6 billion for federal student aid programs, including a $500 increase to the maximum Pell Grant award, bringing the total to $7,395 for the 2023-24 award year. According to congressional leaders, this Pell Grant increase would be the largest increase in the maximum award since the 2009-10 award year, and further build off last year’s $400 increase.

The bill rescinds $360 million from the Pell Grant's reserves to pay for the $500 increase in the maximum award, allocating the same level of discretionary funding received by the program in recent years. Though less than the $1.05 billion rescinded in the FY 2022 omnibus, this latest rescission of previously appropriated Pell Grant funding continues a concerning trend observed over recent years.

“We are thrilled to see the primacy of student financial aid reflected in this spending package, particularly the $500 increase to the maximum Pell Grant award, which will go a long way toward helping low- and moderate-income students fund their postsecondary education,” said NASFAA President and CEO Justin Draeger.

Campus-based aid programs would also see boosted spending in the appropriations package, with $910 million allocated for the Federal Supplemental Educational Opportunity Grant (FSEOG) program, an increase of $15 million above the FY 2022 enacted level, and $1.23 billion allocated for Federal Work-Study (FWS), an increase of $20 million above the FY 2022 enacted level.

In addition to the increases in federal student aid funding, the bill provides $2.2 billion for career, technical, and adult education, $100 million above the FY 2022 enacted level, and $184 million in funding for the Fund for the Improvement of Postsecondary Education, which includes $10 million for basic needs grants and $45 million for Postsecondary Student Success grants. The proposal contains an additional $3.5 billion for higher education programs, $532 million more than the FY 2022 enacted level. Included in this $3.5 billion is:

  • $1.02 billion to support minority-serving institutions (MSIs) and historically Black colleges and universities (HBCUs), $137 million more than the FY 2022 enacted level

  • $1.2 billion for Federal TRIO programs and $388 million for GEAR UP, $54 million and $10 million over FY 2022 spending levels, respectively

  • $70 million for Teacher Quality Partnerships, a $11 million boost over FY 2022

The legislation also includes language that would keep level funding for student aid administration, at $2.03 billion, which was lower than the administration’s request of $2.65 billion. Student aid administration funding is directly tied to FAFSA simplification implementation and the department’s Next Gen initiative.

Perhaps anticipating that forgoing an increase in funding would delay certain initiatives, the bill also includes language that would give the department flexibility in rolling out Next Gen, which ED has planned to launch when existing servicing contracts expire in December of 2023. Per the legislation, ED would be able to extend those expiring contracts by one more year.

“We are examining how flat funding will impact the Office of Federal Student Aid (FSA) at a time when the agency — which is already stretched thin — has many critical initiatives underway, including FAFSA simplification implementation,” Draeger said. “It cannot be understated that a smooth implementation with ample communication to financial aid professionals is critical for such a monumental undertaking, and it is imperative that FSA has the necessary resources to ensure a successful transition.”

According to Republicans the package would provide no new funding for the implementation of the administration’s student loan forgiveness plan.

The measure is expected to be taken up and passed by Congress by the end of the week. The Senate is expected to take up the bill first and pass it by Thursday, offering the House a narrow time frame to wrap up consideration before the week’s end.

This will likely be one of the final pieces of legislation to be considered by Congress before the new Republican-controlled House is sworn in on January 3.

Once President Joe Biden has signed this legislation, ED can then begin to flesh out the 2023-24 Pell Grant payment and disbursement schedules. The department is required to release those schedules by February 1.


Publication Date: 12/21/2022

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