Down to $40 Billion

The Biden administration and congressional Democrats cut the Build Back Better Act in half, leaving many higher education investments behind but boosting the maximum Pell Grant and funding for HBCUs and other minority-serving institutions.

October 29, 2021
 
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President Biden discusses the Build Back Better framework at the White House Thursday.

The White House and Democratic lawmakers unveiled Thursday the latest iteration of President Biden’s social spending plan -- which includes a total of $40 billion in higher education and workforce development investments -- with hopes that the substantially smaller package than originally proposed will finally garner enough support to pass Congress.

Though tuition-free community college -- the original centerpiece of Biden’s college affordability agenda -- was cut from the legislation during negotiations, the now $1.75 trillion Build Back Better Act includes several wins for higher education -- albeit, smaller wins than hoped for. Notably, the bill increases the current maximum Pell Grant award of $6,495 by $550, slightly more than what was originally proposed. If that’s combined with the proposed $400 increase to the award through the appropriations process, the purchasing power of the Pell Grant would be boosted from covering 29 percent of tuition, fees and room and board at a four-year public institution to 32 percent for the next academic year, said Kim Cook, CEO of the National College Attainment Network.

But the increase is only for students who attend public or private nonprofit institutions, a move that Jason Altmire, president and CEO of Career Education Colleges and Universities -- which represents for-profit institutions -- called “unprecedented.”

“Congress has never done anything like this,” Altmire said. “I find it amazing that they’re doing this at the same time that they’re putting forward an infrastructure bill that’s going to require welders, heavy equipment operators and truck drivers -- those are our schools, those are our students. We believe they should take another look at this and include all schools in all sectors in any Pell Grant increase.”

The legislation includes $500 million for fiscal year 2022 for college retention and completion grants, a federal funding focus that some policy experts have called “revolutionary.” Like other parts of the bill, the investment is much lower than proposed. But its inclusion represents a shift in how the federal government thinks about the issues facing college students, said Nicole Siegel, deputy director of education at the think tank Third Way.

“For too long we’ve focused on getting students into college and not enough on getting them through,” Siegel said. “Paired with the increase in Pell Grants, the investment in college completion and retention grants will provide front- and back-end affordability fixes to our higher education system, supporting our most underresourced students and the institutions that serve them.”

Unlike other parts of the legislation, historically Black college and universities, tribal colleges and universities, Hispanic-serving institutions, and other minority-serving institutions actually received more funding in the latest version of the Build Back Better Act, according to House Education and Labor Committee chair Representative Bobby Scott, a Democrat from Virginia. Of the total $10 billion that will be allocated to these institutions, $3 billion will be used for grants to improve research and development infrastructure. The bill also includes institutional aid for capacity-building and financial aid for low-income students, with $2.35 billion each for HBCUs and HSIs over five years, $705.6 million for TCUs, and $588 million for other MSIs.

“This proposal … secures another significant investment in historically Black colleges and universities, tribal colleges and universities, and minority-serving institutions,” Scott said.

The Build Back Better Act invests $20 billion in workforce development, including $4.6 billion for industry partnership grants and funding for adult education and career and technical education. It also provides funding for research through the National Science Foundation and the National Institutes of Health, with a total of $975 million for NSF research awards, scholarships, fellowships and upgrades to research facilities at HBCUs and other MSIs as well as $75 million for the NIH to increase research capacity at MSIs.

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Other provisions in the legislation would repeal the taxability of Pell Grants and eliminate a complicated interaction between the grants and the American Opportunity Tax Credit, providing around 730,000 lower-income students with at least an extra $1,000, according to estimates from the American Council on Education.

The bill would also expand access to federal financial aid to students receiving benefits from the Deferred Action for Childhood Arrivals program, which Deborah Santiago, co-founder and CEO of Excelencia in Education, said was critical for helping students access the aid they need to be successful.

“More than anything else, this sends a message of support in our community and shows that we are included,” Santiago said. “Given how many things got put on the cutting-room floor, to see this still remain as core to this next iteration of Build Back Better is heartening.”

The American Council on Education called the higher education investments included in the legislation “important and notable accomplishments” but expressed their disappointment that many initiatives were either dropped or scaled back -- Biden's initial proposal for higher education investments topped $290 billion. However, that was true for much of the legislation, as Biden acknowledged during a speech Thursday.

“No one got everything they wanted, including me, but that’s what compromise is,” Biden said. “That’s consensus. And that’s what I ran on.”

Biden has said he would work to pass his other priorities, like tuition-free community college, throughout the remainder of his first term. Department of Education under secretary James Kvaal reiterated that commitment during an online event held Thursday.

“The president is around for at least three more years, hopefully longer -- so we’re going to have other opportunities to push our agenda on Capitol Hill,” Kvaal said. “I know how important free community college is to him personally, and I know he’s going to keep fighting about it. It’s a little hard to say right now what the legislative opportunity or strategy is going to be, but I know he’s going to try to turn over every stone and find ways to make progress on that idea.”

Despite Biden’s remarks, consensus on the Build Back Better Act still isn’t guaranteed. Senator Kyrsten Sinema, a Democrat from Arizona who has been at the center of negotiations to cut down the original $3.5 trillion package, said in a statement that “we have made significant progress” on the bill but stopped short of saying that she was in full support of its current form. Senator Joe Manchin, the Democrat from West Virginia and the other senator who has been withholding support for the Build Back Better Act, refused to directly answer reporters who asked if he supported the new framework.

The House is expected to vote on the legislation first before it’s taken up by the Senate.

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