House Hearing Focuses on ED’s FY 24 Budget Proposal and Committee Oversight Efforts

By Hugh T. Ferguson, NASFAA Managing Editor

Education Secretary Miguel Cardona spent Tuesday offering hours of testimony to the House Committee on Education and the Workforce to justify the Department of Education's (ED) budget request for fiscal year 2024 and responded to questions that delved into federal investments and costs associated with higher education.

Though the hearing focused on the entirety of the education system, a number of questions centered on higher education and issues concerning affordability, federal spending, ongoing negotiations over the debt limit, and the student loan landscape.

Rep. Virginia Foxx (R-N.C.), chairwoman of the committee, used her questioning to push Cardona to provide clarity around the student loan repayment pause.

Cardona reiterated previous comments, and said that loan payments would resume following a decision from the United States Supreme Court concerning the administration’s debt cancellation program.

Foxx said ED needed to be clear about its plans for transitioning borrowers back into repayment and called on the department to be more prompt in responding to the committee’s nearly dozen oversight letters.

“Six times, the department extended its pause on student loan payments. Each time, American families scrambled to prepare for the restart of loan payments while education bureaucrats left them in the dark until the 11th hour,” Foxx said. “The American taxpayer has paid $175 billion for the repayment moratorium. It must end.”

One area that has garnered bipartisan interest has been the consideration of short-term Pell Grants, where both Foxx and Ranking Member Rep. Bobby Scott (D-Va.) have expressed optimism around a potential expansion of the program. Cardona also expressed interest in following congressional developments.

“If we're asking our institutions to evolve to meet the students' needs, we too need to be thinking about different ways to meet the demand,” Cardona said. “I look forward to hearing more about it and engaging and working in bipartisan fashion to support the legislation.”

Scott largely praised the administration's efforts to help students recover from the pandemic and expand access to high-quality education by administering targeted relief.

“This administration has forgiven more than $38 billion in student loan debt for 1.75 million borrowers, including loan borrowers who were defrauded by their institutions,” Scott said. “And it has helped provide borrowers with a clear pathway to repayment by improving the Public Service Loan Forgiveness program and income-driven repayment.”

Committee Democrats then turned their questioning to highlight the potential impact that House Republicans’ debt limit proposal would have on funding levels for ED. Although the bill does not specify agency- or program-level cuts, Republicans have said that their budget proposal would not reduce defense spending. Under that assumption, the White House estimates that lowering fiscal year 2024 topline levels for non-defense funding to fiscal year 2022 levels would result in a roughly 22% cut.

“The proposal reduces funding for support for as many as 7.5 million students with disabilities. It also makes college more expensive by eliminating Pell Grants for 80,000 students and reducing the maximum award for the remaining 6.6 million recipients,” Scott said. “Finally, it eliminates badly needed student debt relief for more than 40 million eligible borrowers.”

Throughout his testimony, Cardona highlighted the need to ensure that students have options in pursuing postsecondary education and urged the committee to work in a bipartisan manner on issues.

“I think it is time that we as a country come together and challenge the ‘four-year college or bust’ mentality that still exists in many places,” Cardona said.

Rep. Glenn Grothman (R-Wis.) told Cardona that he would be introducing legislation that would enable financial aid professionals to have the ability to limit the amount of loans a borrower could take and urged the department to assist professionals in being transparent with students.

“I believe counselors should be able to give students accurate information,” Cardona said in response to Grothman’s summary of the proposal.

Committee members also touched on the administration's debt cancellation plan.

Rep. Rick Allen (R-Ga.) questioned ED’s debt cancellation program and said the plan fails to help taxpayers who did not receive a college education.

Cardona pushed back on Allen’s framing of the program, and said the one-time debt cancellation was in response to the pandemic to help prevent a spike in student loan default, get borrowers back on their feet, and spur the health of local economies.

In terms of preventing rising costs for higher education, Cardona said that debt cancellation would work in conjunction with new accountability measures to make postsecondary education more affordable.

Rep. Ilhan Omar (D-Minn.) praised the debt cancellation plan and asked Cardona if ED had the needed resources to prepare borrowers for repayment.

“We recognize it's never been done before to bring on, up to 43 million people back to repayment. The [Office of Federal Student Aid] is ready. We want to be more responsive than we've been in the past and make sure that we provide good service,” Cardona said. “I will say that if the budget proposal that we have here is not supported, it would significantly impact our ability to serve the 43 million borrowers. It would affect our ability to serve those students who are going to be eligible for FAFSA. We anticipate over 600,000 more students having access to higher education with our better FAFSA.” 

Be sure to check out NASFAA’s Student Loan Repayment Toolkit and the FAFSA Simplification Web Center.

 

Publication Date: 5/17/2023


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