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House Joins Senate in Approving $40B in Aid for Higher Education

March 11, 2021
 
 

The House on Wednesday sent President Biden a massive $1.9 trillion coronavirus relief package, which includes an additional $40 billion in aid for the nation’s colleges and universities. Biden in a statement said he will sign the bill Friday.

The money for higher education, also passed by the Senate Saturday, would surpass the $14 billion colleges and universities received in last March’s CARES Act and the $22.7 billion they received in December’s $900 billion relief package.

It is less than the $57 billion in aid colleges and universities had sought. But in a statement, American Council on Education president Ted Mitchell called the House passage of the bill “a win for students and higher education institutions hit hard by the pandemic. The nearly $40 billion included for students and campuses will be enormously helpful, but this emergency is not over for either higher education or the country as a whole. There remain many pressing problems, including students and families struggling to cope with lost jobs or reduced wages and colleges and universities battered by steep declines in revenues and soaring new expenses.”

As in those previous relief bills, institutions would be required to spend at least half of the money on emergency grants to help students struggling to afford living expenses and the technology for remote classes they need during the pandemic.

Left for the Education Department to decide is whether undocumented and international students will be eligible for relief this time. They were barred from getting help in the previous packages.

The money for institutions will be distributed largely along the same lines as in the previous packages. However, institutions with large endowments will not be penalized as they were in December’s relief package. Private higher education institutions subject to a 2017 endowment tax had their share of the package cut in half. December’s bill also only allowed the institutions to use the aid on emergency grants to students or to pay for personal protective equipment and other health and safety costs associated with the coronavirus.

Wednesday’s bill, which passed in a partisan vote, 220 to 211, also represented a victory for critics of for-profit institutions. The measure includes a provision the critics have long pushed for. It would, beginning in fiscal 2023, no longer allow for-profits to count GI Bill dollars toward a requirement that at least 10 percent of their revenue not come from the federal government. Not counting that money as federal dollars had given for-profit institutions an incentive to recruit, and at times defraud, veterans and service members.

The bill also includes a victory for advocates of canceling student debt. Democrats added a provision that says if debt were to be canceled, the value of the amount forgiven would not be taxed by the federal government. Advocates for borrowers worried that should debt be canceled, borrowers would end up paying more in taxes than they would have had to spend on their loan payments.

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