Democrats propose $40B in higher education relief funding

Dive Brief:

  • Colleges would receive nearly $40 billion in direct coronavirus aid in Democrats’ latest relief package, the largest single infusion of federal funding institutions have seen since the pandemic began. 

  • Nonprofit and public colleges would need to devote at least half their cut of the funds to student grants. For-profit institutions would need to dedicate all the money they receive to students.

  • The nearly $2 trillion spending bill doesn’t limit which students can get relief money. The House education committee as of Tuesday evening was reviewing its section of the bill, which is expected to pass. The entire package would head to the Senate floor for an expedited vote after the House signs off.

Dive Insight:

The new rescue plan largely mirrors President Joe Biden’s initial proposal, with some tweaks. The president indicated shortly before taking office that he would earmark $35 billion for public colleges. The decision drew ire from private institutions, however.

That restriction didn’t make it into the latest version of the bill, which also restores funding to the wealthiest private colleges. The last spending measure, passed in December, curtailed how much they could receive. Former President Donald Trump and his Education Secretary Betsy DeVos railed against the prospect of them taking relief money.

The funding would be distributed through the same formula as the last big spending bill, which factored in headcount as well as full-time equivalent enrollment. The inclusion of the former enables colleges that enroll more part-time students to benefit. 

Colleges that receive institutional aid must use part of that money to implement “evidence-based practices” meant to suppress the coronavirus and to conduct outreach to financial aid applicants about the possibility of adjusting how much they receive, the bill states.

States that accept elementary and secondary education relief wouldn’t be allowed to disproportionately cut K-12 or higher ed spending in fiscal years 2022 and 2023.

The bill also contains a provision that changes the so-called 90/10 rule, which prevents for-profit institutions from receiving more than 90% of their revenue from student aid. 

Military education benefits have historically not been included in that calculation, but the legislation would shift the law to incorporate all sources of federal education assistance.

Though the legislation has been widely panned by Republicans for its price tag, it is moving through Congress in a process known as reconciliation, which enables lawmakers to pass spending measures in the Senate with a simple majority, rather than the two-thirds vote typically needed. Democrats control both Congressional chambers, meaning they don’t need GOP buy-in for the bill. 

Nearly two dozen higher ed groups wrote to leaders of the House education committee Monday expressing support for the legislation.

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