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Congress is planning to increase the maximum Pell Grant award to $7,395—a $500 increase—and put more money toward several student success grant programs as part of a $1.7 trillion spending package for fiscal year 2023.

The 4,155-page draft spending plan, unveiled early Tuesday morning, will be voted on this week as lawmakers in the Senate and House of Representatives plan to work quickly to avoid a government shutdown. The resolution currently funding the government expires Dec. 23. Lawmakers are expected to pass the bill after appropriators on both sides of the aisle worked over the last several weeks to reach an agreement on the plan.

The bill boosts funding levels for a range of federal higher education programs, including $137 million more for historically underresourced institutions. However, the Biden administration, advocates and interest groups had hoped to see higher increases across the board.

“This is not a budget in which they were doing extraordinary things,” said Jon Fansmith, assistant vice president for government relations at the American Council on Education. “This budget was a lot about making the kind of compromises necessary to get spending wrapped up for the year. They weren’t making big bold strokes in this budget.”

One of the more notable provisions is the Pell Grant increase, which was expected and is the largest in a decade. The increase will kick in for the 2023–24 award year and is the second increase in as many fiscal years. Advocates and higher education groups said the $500 increase is significant, especially when paired with the $400 increase to the maximum Pell Grant award in the fiscal year 2022 budget.

“We are thrilled that Congress provided the $500 increase,” said David Baime, senior vice president for government relations for the American Association of Community Colleges. “It will significantly help low-income students finance community college.”

AACC and other groups have pushed Congress to increase the maximum Pell Grant award to $13,000. President Biden is aiming to do that by 2029.

Fansmith said that with $500 annual increases, it will take time to reach the goal of $13,000.

“It falls short of what we hoped for, but it still represents a very significant increase for students across the country,” he said.

Over all, the U.S. Department of Education is slated to receive $79.23 billion in discretionary funds—a 5.1 percent increase from the current appropriation of $75.4 billion, according to an analysis by the Committee for Education Funding, a nonprofit that advocates for increasing the federal investment in education. The Biden administration had requested $13 billion more for the department.

“We hoped for more support than that,” Baime said. “Our students and our colleges are facing increased costs and challenges with enrollment in most places, and they rely upon the federal government for support.”

However, the draft spending plan doesn’t provide any additional money for student aid administration, keeping the Office of Federal Student Aid’s administrative budget at about $2 billion. The Biden administration had requested $800 million more.

Loan Forgiveness

Republicans touted the level of funding in their bill summary, noting that the bill “provides no new funding for the implementation of the Biden administration’s student loan forgiveness plan.” The draft bill doesn’t restrict the Office of Federal Student Aid from carrying out the debt-relief plan if the Supreme Court allows it to move forward.

“There’s going to be a lot of frustration for borrowers and difficulty for servicers,” Fansmith said of the funding levels. “But [the bill] also preserves their ability to do it … It could’ve been worse.”

In addition to student loan forgiveness, Federal Student Aid is working to simplify the Free Application for Federal Student Aid before next October, to overhaul a number of debt-relief programs, to resume payments at some point in the next year and to modernize the loan servicing system by next December, among other projects.

Michele Shepard, senior director of college affordability for the Institute for College Access and Success, said the budget for student aid administration is concerning.

“All of those pieces that we really want to see implemented and we’re concerned that they won’t have enough funding to do that,” Shepard said.

Shepard said she was pleased to see $45 million included for the Postsecondary Student Success Program. The fiscal year 2022 budget allocated $5 million for the competitive grant program that’s aimed at helping students complete a college program by providing wraparound services and other supports such as tutoring.

Shepard said the initial $5 million was a recognition of the importance in investing in college completion.

“It was a down payment, but it wasn’t necessarily going to move a ton of needles,” she said. “I think the $45 million is a recognition of the importance of actually putting some resources behind it.”

Other provisions in the draft spending plan:

  • $1 billion, or $137 million more, for historically Black colleges and universities, minority-serving institutions and other historically underresourced institutions that serve low-income students. Congress also is planning to provide $50 million as part of a new program to support research infrastructure investments at HBCUS, MSIs and tribal colleges. The Biden administration has requested $450 million to expand the research capacity of these institutions.
  • $429,587,000 in earmarks for colleges and universities.
  • $54 million more for TRIO, a federal student services program for low-income students, bringing the total to $1.191 billion.
  • $10 million more for GEAR UP, a grant program that aims to help prepare low-income students for college, bringing the total to $388 million.
  • $10 million more for the Child Care Access Means Parents in School program, which now totals $75 million, subsidized childcare for low-income parents enrolled in a postsecondary program.

Advocates wanted Congress to bring the childcare program up to $500 million, arguing that amount would support childcare for 6 percent of Pell-eligible parents with children ages 0 to 5.

“This historic moment demands a historic investment in parenting students and their children,” advocates wrote in a recent letter to key lawmakers. “The COVID-19 crisis has put into stark relief the challenges parenting students—many of whom are also working parents—face balancing child care, academics, one job or several jobs, and precarious finances, even before the pandemic.”

Baime said AACC appreciated the increases to the childcare program and other grant programs geared toward supporting institutions and community colleges.

“The increases will mean real growth of programs and will have a discernible impact on campuses,” he said. “We had hoped for a larger increase in those programs.”

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