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COVID-19 Aid Proposal Would Bring Democratic Policy Changes

February 9, 2021

The chairman of the House Education Committee, Representative Bobby Scott, proposed another $40 billion in coronavirus aid for colleges and universities, a slight increase from the $35 billion President Biden had proposed, but still less than half of what institutions had requested from Congress.

The proposal will likely be approved by the committee’s Democratic majority today and included in the $1.9 trillion relief proposal congressional Democrats are working to push through Congress through a budget procedure that would not require any Republican support.

The proposal from Scott, a Democratic congressman from Virginia, would fall short of the $97 billion in aid associations representing colleges and universities say they need to cover their institutions’ losses during the pandemic. But it does include an incentive on states facing their own budget shortfalls to not slash higher education funding. States receiving education aid in the package would have to agree to spend at least the same proportion of their budgets on higher education as they did, on average, over 2017, 2018 and 2019. The education secretary, however, could excuse states if they need to make cuts because of the pandemic.

Though part of a bill aimed at providing relief during the pandemic, the proposal includes several policy changes sought by Democrats. It would no longer allow for-profits to count GI Bill dollars toward a federal requirement to have at least 10 percent of their revenue not come from federal dollars. Critics have long pushed for the change, saying that counting the money toward meeting the requirement gives for-profits incentive to target, and sometimes defraud, veterans and service members.

In a shift from prior aid packages passed during the Trump administration, the proposal would allow undocumented and international students to receive emergency student grants. “Institutions will be solely responsible for determining which students receive emergency financial aid grants,” the proposal said.

The proposal also provides reassurance to private universities that have been concerned about being left out of additional aid. Scott’s proposal would distribute the money in much the same manner as prior relief packages, which sent aid to private institutions, and refers to “public and private non-profit institutions.”

In addition, the proposal restores aid for institutions with large endowments. Colleges and universities subject to having to pay 1.4 percent excise tax on net investment income were left out of the relief bill Congress and President Trump approved in December. They would be eligible for aid in this go-around.

For-profit institutions, however, would see their share of the aid reduced from 3 percent to 1 percent, and they would only be allowed to spend their funding on emergency grants to students.

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