Biden Signs Short-Term Spending Plan, Reversing ED's Update to the SAI Formula

By Maria Carrasco, NASFAA Staff Reporter

President Joe Biden on Friday signed another continuing resolution into law for fiscal year 2024 to avoid a partial government shutdown until at least March 22. However, this resolution also reversed the Department of Education's (ED) announcement last week that would update the Student Aid Index (SAI) formula. 

Earlier on Tuesday, ED announced an update to the SAI formula, which allows the Student’s Contribution from Income (SCI), an interim calculation in the SAI formula, to have a negative calculated value with no floor. This update to the SAI formula would have resulted in 7.3 million students in total expected to be eligible for federal Pell Grants in the 2024-25 award year – which is 2.1 million more than expected after ED adjusted IPA tables in January. 

But on Wednesday, the House of Representatives released a draft continuing resolution (CR), which would fund the federal government through March 22 and rescind ED’s update to the SAI formula. A provision in the CR would now restore a floor of -1500 on the SCI for the 2024-25 year, and set the floor at zero for the 2025-26 year, and every year thereafter.

The CR also included language that would adjust the funds annually appropriated for the Pell Grant program. This adjustment was made possible by the change made to the SAI formula restoring the SCI floor, which was a cost-saving measure, and will result in additional mandatory spending that will go toward supporting the Pell Grant program’s discretionary funding. The bill adds roughly $3 billion in additional “mandatory for discretionary” funding over the next four fiscal years, through fiscal year 2027. 

On Thursday, both the Senate and House passed the CR, sending it to Biden to sign. Appropriators now are working toward an agreement on the funding details of several bills, including one that funds the Department of Education. The CR extends funding for the Labor, Health and Human Services, Education and Related Agencies bill, which includes student aid and all education funding, until March 22.

Sen. Bernie Sanders (I-Vt.), chairman of the Senate Health, Education, Labor, and Pensions Committee, expressed disappointment with the passage of the CR because fewer students would receive Pell Grants through the reversal of the SAI update. 

“In the wealthiest country on Earth, students who want a college degree should be able to get it without facing financial ruin,” Sanders said in a statement. “As the Chairman of the Health, Education, Labor, and Pensions Committee, I will fight to significantly expand the Pell Grant program, not see it cut.”

Rep. Bobby Scott (D-Va.), ranking member of the House Committee on Education and the Workforce, shared a similar statement, saying that the FAFSA Simplification Act was meant to expand access to students to receive the Pell Grant.  

“The language included in the Continuing Appropriations Resolution is not in the spirit of the original intent of the FAFSA Simplification Act,” Scott said in a statement. “It is a false choice to claim that we must choose between expanding Pell to more low-income students or preserving the long-term viability of the Pell Grant program.”

However, Rep. Virginia Foxx (R-N.C.), chairwoman of the House Committee on Education and the Workforce, criticized ED for its initial update to the SAI formula, saying it would create a shortfall in Pell Grant funding. 

“In the 11th hour without consulting Congress, the Department announced an expansion of the Pell Grant,” Foxx said in a statement. “This expansion would cripple the Pell Grant program by creating a $7 billion funding gap next year. Today’s responsible CR puts a stop to the Department of Education’s reckless action, while still enabling students to get the financial aid information they need in a timely fashion and ensuring the Pell Grant is stable in the future for families truly in need.”

 

Publication Date: 3/4/2024


Ruben R | 3/4/2024 7:54:48 PM

This situation is worrying. Not only will we have to deal with many FAFSA corrections due to glitches and self-submitted FAFSAs, but the frustration experienced by our students and their families has been overwhelming. Any further delays in processing awards will have a devastating impact on our financial aid communities. Not to mention, but I will – has anyone seen the new FSA ID process work for the No SSN process?

Julie L | 3/4/2024 11:57:53 AM

I assume this will delay ISIR delivery again - if so, how long?

Anthony H | 3/4/2024 11:53:53 AM

I don't think it will affect things this year. My understanding is that the SAI will stay -1500 this year (status quo), then go to 0 next year. The proposal of a no-floor negative was never implemented, in my understanding, so this "change" shouldn't affect this year's ISIRs.

Leo H | 3/4/2024 11:20:19 AM

I shudder to think about this too much, but does this mean that ED is now going have another delay for ISIR delivery? Do they have to go in and undo everything that they have been working to adjust since January when the cost of living adjustments were announced.

With the additional appropriation of funding, and the elimination of 2.1 million recipients, does this affect the maximum Pell award for 24-25 or does just provide enough funding to hold to the $7,395 level?

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