Disclaimer Part One: We realize this is a very long post, but we wanted to provide you with our initial review and summary of the legislation that passed last night and is awaiting President Trump’s signature immediately.
Overview
A little over 36 hours ago Press Releases and documents from both chambers of Congress and leaders from both sides of the political isle began to circulate in Washington providing our community with some very positive news…
Our students were included in the long awaited deal Congress had struck to provide additional financial support for Education and they would soon be eligible to receive portions of an additional $908 million in federal Higher Education Emergency Relief funds to assist them in continuing to meet the fiscal challenges of trying to endure their education during the pandemic.
This news was even more gratifying because, just days before, there was a very real possibility that our students might receive no support at all! Now, upon final review of the legislation that both the U.S. House of Representatives and U.S. Senate passed last night, it appears that there was a one percent reduction in the allocation for our students, resulting in the loss of $226 million. But $681 million is better than nothing too!
So is the glass half full or half empty? Let’s look a little deeper into this initial summary of both three parts of this Omnibus bill and then you can decide for yourself.
Brief Initial Summary of Consolidated Appropriations Act, 2021
Disclaimer Part Two: This is an initial attempt to highlight and summarize some, but likely not all, of the key portions of the 5593 page bill that are of interest to our community. Stay tune for the webinars after the 1st of the year. Over the Christmas and New Year’s break we will be working to provide additional detail, but again – we wanted to give you this brief synopsis of such a long-awaited package of revisions and additions to higher education policy as soon as possible.
- Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2021 (Division H, Title III—Department of Education)
(Begins on page 1032 – Key Higher Education Issues begin on page 1036)
Federal Pell Grants
The passed legislation increases the maximum award by $150, to $6,495for academic year 2021-2022.
Ability to Benefit
The passed legislation directs the Secretary and ED to implement the directive included in the fiscal year 2020 explanatory statement and issue guidance within 90 days that serves as a simple and clear resource for implementing Ability to Benefit at institutions of higher education (IHEs ).
Simplifying the Free Application for Federal Student Aid (FAFSA)
The passed legislation states that there is continued support within Congress to further simplify the F AFSA and verification process to reduce the burden on students and IHEs. The Department should provide support for students who, due to substance use disorders, are unable to include parental information in the F AFSA. This could include further efforts to ensure students and financial aid administrators are aware of current options for students, providing specific information and examples of how students whose parents have substance use disorders can utilize current options, and exploring other administrative changes to help address the unique needs of such students.
Post-Secondary Transfer Articulation Agreements
The passed legislation encourages the Department to gather input from States to develop and disseminate best practices on implementing and scaling up comprehensive statewide systems on articulation agreements.
Congress states that, “Transfer articulation agreements between community colleges and 4-year colleges and universities can play an important role in promoting access, affordability, and completion in higher education.”
National Advisory Committee on Institutional Quality and Integrity
The passed legislation continues the authority for NACIQI for one year – through 2021.
Public Service Loan Forgiveness
The passed legislation provides a series of directives, with substantial funding, requiring the Secretary to promote and support regulatory changers that make individuals more aware of Public Service Loan cancellation/forgiveness and seek cancellation under the program.
CDR Waiver for Private, Non-profit Institutions
The passed legislation provides waivers for a small, select group of private non-profit institutions serving Native Americans or any private non-profit institutions whose fall enrollment for the most recently completed academic year was comprised of a majority of the students who are African American (as defined in section 322(2) of such act (20 U.S.C. 1061(2)) and at least 50% or more received Federal Pell Grant Funds.
- Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (Division M, Department of Education—Education Stabilization Fund)
(Beginning on Page 1851 – HEERF Issues begin on page 1872)
Higher Education Emergency Relief Fund
The passed legislation allocates an additional $680,914,080 to students attending institutions within our community. Funds are allocated to institutions to be passed along to the students based upon the following formula:
- 37.5 percent according to the relative share of full-time equivalent enrollment of stu3 dents who were Federal Pell Grant recipients and who were not exclusively enrolled in distance education courses prior to the qualifying emergency;
- 37.5 percent according to the relative share of the total number of students who were Federal Pell Grant recipients and who were not exclusively enrolled in distance education courses prior to the qualifying emergency;
- 11.5 percent according to the relative share of full-time equivalent enrollment of students who were not Federal Pell Grant recipients and who were not exclusively enrolled in distance education courses prior to the qualifying emergency;
- 11.5 percent according to the relative share of the total number of students who were not Federal Pell Grant recipients and who were not exclusively enrolled in distance education courses prior to the qualifying emergency;
- 1 percent according to the relative share of full-time equivalent enrollment of students who were Federal Pell grant recipients and who were exclusively enrolled in distance education courses prior to the qualifying emergency; and
- 1 percent according to the relative share of the total number of students who were Federal Pell grant recipients and who were exclusively enrolled in distance education courses prior to the qualifying emergency.
Institutions are to receive the funds within 30 days of enactment, and are to provide the funds to students who may use them “for any component of the student’s cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, health care (including mental health care), or child care.
In making financial aid grants to students, an institution of higher education shall prioritize grants to students with exceptional need, such as students who receive Pell Grants.
Moreover, the passed legislation also revises and extends the use of previous CARES Act funds. For any institutions that has remaining institutional HEERF grant assistance, your remaining 18004(a)(1) funds can be used to:
- defray expenses associated with coronavirus (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll);
- carry out student support activities authorized by the HEA that address needs related to coronavirus; or
- provide financial aid grants to students (including students exclusively enrolled in distance education), which may be used for any component of the student’s cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, health care (including mental health care), or child care. In making financial aid grants to students, an institution of higher education shall prioritize grants to students with exceptional need, such as students who receive Pell Grants.
- FAFSA Simplification Act of 2020 (Division FF, Title VII-FASFA Simplification)
(Beginning on page 5139)
Needs Analysis
The passed legislation makes significant changes to the determination of an individual’s relative financial need. EFC undergoes a name change to Student Aid Index (SAI), but maintains the basic calculation, while many other formulas change.
Cost of Attendance
The passed legislation modifies the list of items, including a considerable number of new allowances that are not currently provided for. Once the transition to the new process is complete, institutions will be required to post the list of items on their websites.
Student Aid Index
The passed legislation establishes three separate SAIs: one for dependent students, one for independent students without dependents, and one for independent students with dependents other than a spouse. These differential SAIs drive the determination of eligibility. Some of the unique characteristics of the new regime are that it establishes early tests for zero awards, applicants who are provided with exemptions from asset reporting, and more. The tradeoffs are likely to be the adjustment to an entire different way of doing things, but there is a transition…all of this is not set to initiate until July 1, 2023 (Award Year 2023-2024).
Student Financial Aid Administrators Discretion
The passed legislation authorizes substantial new capabilities – with stipulations – for FSA Admin to, on a case-by-case basis, adjust the variables used to determine FSA awards, including, but not limited to COA, SAI, and dependency status changes.
FASFA Simplification
The passed legislation narrows the list of questions to approximately 20-35 depending on whether you are filling out the form as an independent or dependent student. The new FASFA will form the basis for the development of considerable new consumer information, including both rapid turnaround of information important to the filer in the near term, and the use of the data to assess the program, the form, and the entire processes effectiveness and efficiency over time.
Student Eligibility
The passed legislation removes two barriers to accessing Federal financial aid – repealing the suspension of FSA eligibility for drug-related offenses and male student registration with the Selective Service among other modifications.
Moreover, the passed legislation establishes new eligibility and support for individuals who are incarcerated – including access to Federal Pell Grants for individuals enrolled in prison education programs operated by institutions of higher education that meet specific criteria. Criteria which precludes private, for-profit/proprietary institutions of higher education from participating.
Repeal of the Subsidized Usage Limit Applies (SULA) Restriction
Repeals the time-based limit for student subsidized loan eligibility.
Early Awareness Program
The passed legislation also establishes a rather ambitious Early Awareness of Financial Aid Eligibility program.
Future Federal Pell Grant Eligibility Determinations
Also beginning with the 2023-2024 award year, the passed legislation will simplify the criteria used to determine many students’ eligibility based solely upon: 1) Income; 2) Family Size; and 3) Family Type (as established by the new law).
Conclusion
As you can see from this “brief” initial summary there is a great, great deal here to digest. Given what was included in the Omnibus bill, this is nothing short of a mini-reauthorization, with lots of changes that will be required to review, interpret, go through Federal Negotiated Rulemaking (FASFA Simplification), and work our way through together now and into the future.
I’m not certain where you came down on whether or not this is a half full or half empty package of legislation, but before you make your decision, let me throw in a couple of final observations:
First of all, despite countless efforts on the part of some Members of Congress, very serious and thoughtful negotiations on the merits of addressing the issue in several different pieces of legislation, and the combined efforts of all of our resources; the final legislation of 2020 does not include any revisions to the 90/10 Rule – PHENOMENAL NEWS.
Second, unfortunately, the final legislation of 2020 also does not provide any protections from serious concerns related to the negative impact COVID-19 will have on institution of higher education across all sectors ability to meet the eligibility benchmarks (e.g. financial responsibility metrics, 90/10 compliance, and down the road a few years potentially CDRs/loan repayment rates) – HIGHLY UNSETTLING NEWS. But this is unsettling for everybody, so the case must be made that we all need relief – and need it fast.
And finally, consider the year that we have all just been through….remember all of your loved ones who are no longer with us, reach out virtually or in-person with those you love and care about over the holidays, prepare for the future, a vaccine and hope for all, while also recognizing the challenges ahead, and prepare to KISS 2020 GOODBYE! BRING ON 2021!
Tom Netting
