Biden’s 2024 Budget Proposal Doubles Down on Funding for Pell Grants, Free Community College, and Federal Student Aid Administration

By Maria Carrasco, NASFAA Staff Reporter

Editor’s note: This article was updated on March 14 to reflect information from the Department of Education’s budget request justification documents.

President Joe Biden on Thursday released his first budget request for fiscal year 2024, which would boost funding for the Department of Education (ED) by 13.6%, and includes plans to increase the maximum Pell Grant award by $820, provide more funding for the Office of Federal Student Aid (FSA), and expand access to free community college.

Overall, the proposed budget requests $90 billion in discretionary funding for ED in 2024, which is a $10.8 billion or 13.6% increase from the 2023 enacted level. Biden’s budget would impact award year 2024-25. Last year, Biden proposed $88.3 billion in discretionary funding for ED, but the department was allocated $79.6 billion in the spending deal that Biden ultimately signed into law in December. 

“President Biden's latest budget proposal calls on Congress to act with urgency and provide our schools with the resources needed to raise the bar in education by promoting academic excellence and rigorous instruction, improving learning conditions, and answering unmet challenges like the educator shortage and the mental health needs of our students,” Education Secretary Miguel Cardona said in a statement. “The Biden-Harris budget also supports the Department of Education's efforts to boost global competitiveness by expanding opportunities for multilingual learning, redesigning high schools to include multiple pathways to college and career, and supercharging state and local efforts to make free community college a reality nationwide."

This new budget proposal seeks increased funding in several ED programs, including a $820 increase to the maximum Pell Grant award, which is currently $7,395 for the upcoming academic year. That increase would be achieved through a $500 increase in discretionary funding, which could come through the annual appropriations process, and a $320 increase in mandatory spending through the Higher Education Act, which would require additional legislative action from Congress. Biden’s budget would set a maximum award of $8,215 for award year 2024-25, according to detailed budget tables from ED. In a briefing on the budget, Under Secretary of Education James Kvaal said the boost is part of Biden's plan to double the maximum Pell Grant by 2029 and would amount to an increase of more than $1,700 since Biden took office. 

“Those of us here at the Department of Education are laser focused on raising the bar and building an inclusive, valuable higher education system that grows the middle class and drives the economy forward,” Kvaal said during the briefing. “That starts by making college more affordable.”

NASFAA President and CEO Justin Draeger responded to this increase by urging Congress to work together to continue investing in the Pell Grant program.

“This proposal demonstrates a recognition of the primacy of need-based financial aid — and rightfully so, as we know that roughly two-thirds of Pell Grant recipients come from families earning less than $30,000 annually,” Draeger said in a statement. “We urge Congress to continue to build on investments to the Pell Grant program and work toward doubling the maximum grant award and restoring the promise of this foundational aid program.”

ED confirmed with NASFAA that Biden’s budget proposal would extend Title IV eligibility for Deferred Action for Childhood Arrivals (DACA) recipients, commonly known as DREAMers. 

The budget would expand free community college through a new federal-state partnership, which would be initially funded with $500 million in a new discretionary grant program. The grant program would provide students two years of free community college for those enrolled in “high-quality programs that lead to a four-year degree or a good-paying job.”

Additionally, students from families earning less than $125,000 enrolled in a four-year historically Black college and university (HBCU), tribally controlled college and university (TCCU), or minority-serving institution (MSI) would be provided two years of subsidized tuition up to $4,500. As NASFAA reports, HBCUs have historically been underfunded for decades, and students attending HBCUs are more likely to use federal loans to finance their college studies than their peers.

The budget would also increase institutional capacity at HBCUs, TCCUs, MSIs, and other under-resourced institutions, including community colleges, with a proposed $429 million in funding above the 2023 enacted level. HBCUs, TCCUs, and MSIs would also see $350 million in increased funding to expand research and development infrastructure. 

On Monday, ED released its justifications for Biden’s proposed budget, which noted that funding for the Federal Supplemental Educational Opportunity Grant (SEOG) and Federal Work-Study programs (FWS) would remain the same as the fiscal year 2023 enacted level. Specifically, SEOG would receive $910 million and FWS would receive $1.23 million.

When it comes to FSA, the budget would provide $2.7 billion for the office, which is a $620 million increase above the 2023 enacted level. The additional funding is to provide better support to student loan borrowers, as they return to repayment sometime this year. Specifically, the increase would allow FSA to implement “critical improvements to student loan servicing,” “to modernize its digital infrastructure,” and “ensure the successful administration” of the FAFSA Simplification Act and FUTURE Act. 

Draeger applauded the Biden administration for acknowledging the significant work that FSA will need to complete to transition millions of borrowers back into repayment. 

“At a time when the Office of Federal Student Aid is already stretched thin and is implementing many critical initiatives, it cannot be understated how important it will be to ensure that the agency has the necessary resources to complete these monumental undertakings,” Draeger said in a statement. 

Other higher education initiatives outlined in the budget include investments to “improve the retention, transfer, and completion rates of students” with the Federal TRIO Programs, with a $1.3 billion discretionary budget, the Gaining Early Awareness and Readiness for Undergraduate Programs, with a $408 million discretionary budget. Biden is also calling for $200 million for a Career-Connected High Schools initiative, which would expand access to dual enrollment, work-based learning and college and career advising for students in high school.

During the ED briefing, Cardona said some think the Biden administration should “lower [their] expectations” because a divided Congress could make it hard for the administration’s initiatives to become law.

“I've always believed every student deserves high expectations,” Cardona said. “And the same should go for Congress. We cannot scale back our aspirations for the education of our children.”

Draeger said that the proposed budget “is just the beginning of a lengthy appropriations process.” 

“We call on our colleagues in Congress to work across the aisle to prioritize student aid funding and reforms that will ultimately benefit students and families,” he said. 

What’s Next

The president’s budget proposal is the first step in the appropriations process. Next, the House and Senate will develop their own resolutions on spending. The House and Senate appropriations committees will then go through their 12 subcommittees to hold hearings on budget requests and federal spending, until ultimately the two chambers will work to create their own appropriations bills, which will serve as the foundation for future negotiations as both chambers work toward finalizing legislation to set fiscal year 2024 spending. As of Thursday afternoon, both House and Senate appropriations subcommittees did not have any hearings scheduled to begin budgetary discussions. 

If Congress can’t agree on funding levels by Oct. 1, 2023, the chambers will need to pass a short-term funding extension, known as a continuing resolution, to avoid a government shutdown. Once a final appropriations package is passed by both chambers, it will move to Biden to sign into law. Biden signed last year’s budget in December 2022. 

House Republicans are preparing to create a budget that cuts down on federal spending. The New York Times reported on Wednesday that the outline for Republicans’ 2024 budget proposal includes making Pell Grants available only to students whose families cannot contribute any money toward a college education, among other cuts. 

Rep. Kay Granger (R-Texas), chair of the House Appropriations Committee, said Biden’s proposed budget “spends far too much on unnecessary programs at the expense of our national security.”

“America simply cannot afford this misguided plan,” Granger said in a statement. “Congress will now get to work, reviewing it line-by-line to identify programs that do not require additional investments and to insert our own priorities. Republicans on the Appropriations Committee are committed to finding reasonable and responsible solutions to our nation’s debt, and taking a hard look at the programs appropriated every year is just one important part of solving this problem.”

Granger said in the statement that House Republicans will mark up fiscal year 2024 bills in May and June, adding that she looks forward to “calling more administration officials before the Committee to understand how every dollar in this proposal would be used.”

However, Sen. Patty Murray (D-Wash.), chair of the Senate Appropriations Committee, applauded Biden’s budget, saying the proposal will help children pursue higher education. 

“This plan will get more people the health care they need and deserve, help families put food on the table, keep a roof over their head, and save for the future, and invest in making sure our kids can get a great public education and pursue a higher education,” Murray said in a statement. 

Murray adds that the Senate Appropriations Committee will be “busy and moving full steam ahead” with subcommittee hearings on the budget.

Stay tuned to Today’s News for more details on the budget and check out our coverage of the appropriations process.

 

Publication Date: 3/9/2023


David S | 3/10/2023 11:8:57 AM

Every American child has access to a free education from kindergarten (in some areas, pre-K) through 12th grade. That's because taxpayers pay for it. Do you see this as problematic, Darren?

Darren C | 3/10/2023 9:41:29 AM

How about instead of spending more money which always seems to be the proposed "solution", work on fixing the broken education structure instead. It's always disappointing to see the line of "Free community college" when nothing is free, and tax payer money is being spent on it. I hope people can see that throwing more money at something is not a genuine solution in any way, shape or form. This kind of approach gives people the sense that a higher budget, and more tax payer money makes everything "better". Don't get caught up in the show of a divided Gov't. It is only there to force people to choose a side and become emotionally invested in that side. Focus on the problems at the core.

David S | 3/10/2023 9:27:55 AM

It's disappointing that Rep Granger could offer no thoughts about the merits of a national commitment to higher education. I think the Administration's proposal is a good start and hope that we can all- as an association and as individual professionals, taxpayers and voters - encourage the Senate and the House to take these ideas even further. We should not lower our expectations and advocacy goals simply because we have a divided government. Our students deserve a better effort than that. Let's bring back the #Fight4FinAid hashtag!

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