President Biden’s $5.8 trillion FY 2023 budget, submitted to Congress this week, doubles the Pell Grant maximum award by 2029, and includes significant proposals for student aid and higher education funding. The total budget includes both annual appropriations and all mandatory programs.
The president’s budget calls for $1.64 trillion for appropriated programs, from which student aid is funded. The Department of Education is
targeted to receive $88.3 billion, or $12 billion above FY 2022. From that allocation, Pell Grants and Title I for disadvantaged school districts receive the biggest increases within education.
For Pell Grants, the budget proposes a $1,775 increase in the maximum award, to $8,670, for the 2023-24 award year. The budget highlights this increase as another step towards doubling the Pell Grant by 2029. This is the first time President Biden has put a timeline on meeting the double Pell goal.
President Biden’s budget crafts the Pell Grant increase of $1,775 by combining a $500 increase in annual appropriations, and $1,275 in mandatory funds, which means two separate pieces of legislation would need to be enacted to have that increase materialize. This means an appropriations bill, and a reconciliation or other mandatory spending bill, much like the proposal from Build Back Better, would need to be enacted to reach a $1,775 increase in the maximum grant. It is not clear how likely it is that the proposal could clear that level of political and procedural hurdles.
As the foundation of a low-income student’s federal financial aid package, a Pell Grant maximum of $8,670 would serve 6,657 million students, with an average award of $5,816, and a minimum award of $867. According to the budget justifications, students at private, nonprofit colleges make up about 17% of all Pell Grant recipients, which is comparable to the 20% of enrollments in higher education at private, nonprofit colleges.
The Campus-Based Aid Programs complement the Pell Grant, providing low-income students additional grant aid through the Supplemental Educational Opportunity Grant (SEOG) and jobs through Federal Work Study (FWS). Unfortunately, the budget proposes level funding for both SEOG and FWS. Institutions that participate in the Campus-Based Aid Programs match the federal dollars available, allowing SEOG to make $1.25 billion available for more than 1.6 million low-income students, and FWS to make jobs available for more than 621,000 students. Students at private colleges receive 36% of SEOG funds and 44% of FWS funds.
The president’s budget also proposes to permanently end the taxability of forgiven student loan debt. This tax was temporarily suspended during the pandemic though the COVID relief bills. Permanently eliminating the tax is intended to encourage low-income borrowers to enroll in income-driven repayment plans, and amplify the jobs that result in loan forgiveness.
For student support programs, the budget includes requests to increase both TRIO and GEAR UP. TRIO funding is proposed to be increased by $161 million, to $1.298 billion, and GEAR UP by $30 million, to $408 million. TRIO programs at colleges provide support to help students get into college and persist to completion. GEAR UP programs in middle and high schools help prepare students to be college-ready. With increased funding, new grants can be awarded to increase institutional participation in TRIO, and local school-institutional partnerships in GEAR UP.
While the budget does not include a “free community college” program, it highlights $100 million in new institutional support under the Strengthening Institutions Program (SIP), touting community colleges as key recipients. Though the messaging is targeted at community colleges, the SIP program is for institutions that are low-resourced and serve large numbers of low-income students, including public institutions, private, nonprofit institutions, and community colleges that meet the eligibility criteria under Title III, Part A of the Higher Education Act. If enacted as proposed, this much needed bump in SIP funding would help under resourced institutions across all sectors.
In addition to the increase for SIP, all other programs under Titles III and V, serving Historically Black Colleges and Universities, Tribal Colleges and Universities, and Minority-Serving Institutions, are proposed for increases for a total of $1.4 billion. By definition, private, nonprofit colleges are among the eligible institutions for these programs. The number of private, nonprofit colleges designated as Minority-Serving Institutions continues to grow as that population enrollment continues to increase.
Other higher education program increases proposed in the budget include the Child Care Access Means Parents In School (CCAMPIS) program ($30 million increase), Teacher Quality Partnerships ($73 million), and the Hawkins Centers for Teaching ($12 million).
In addition to these established grant programs, the budget includes funding for two new programs under the Fund for the Improvement of Post-Secondary Education (FIPSE) account:
- $110 million for Retention and Completion Grants, which is similar to the pilot program funded at $5 million in FY 2022; and
- $450 million for Research Infrastructure at HBCUs, TCUs and other MSIs, which is a priority for the Administration, and has been proposed in research and innovation bills this Congress.
Next Steps for Congress
President Biden was careful to propose a budget within the regular parameters of a spending plan for the federal government, without revisiting the unfinished
proposals that became Build Back Better, as the Administration sees these as still on the negotiating table.
Congress will review the budget request to determine how to respond to both the president’s top-line spending request for $1.64 trillion, to cover $813 billion in defense (a 4% increase) and $829 billion for nondefense (a 14% increase), and his proposal to raise taxes on the ultra-wealthy by $2.5 trillion over 10 years. In both chambers, the appropriations committees will address spending, the tax committees will address revenue, and the budget committees will package the results into a budget resolution.
A budget resolution typically provides the agreed upon top-line spending and tax levels, as well as any committee instructions for reconciling mandatory (or entitlement) spending. The president does not sign the budget resolution into law, as it is only for purposes of the congressional process. Also, Congress can move forward with appropriations if a budget resolution cannot be agreed to, which is not unusual.
The House will most likely be able to craft a budget plan, and move appropriations bills because of the rules that allow it to function by simple majority. However, as was evident in last year’s budget debates, the slim Democratic majority in the Senate may make it difficult to finalize a budget resolution for FY 2023, or craft any appropriations bills. In addition to the already strained party unity, the mid-term elections, just seven months away, will make it difficult, if not impossible, for Congress to reach bipartisan agreements needed in the Senate to move forward with the budget and appropriation processes.
Despite the difficult outlook, Congress starts each annual budget process with a positive outlook toward functioning under regular order. If the process falls apart by the August recess, the budget work most likely will be put off until a post-election lame duck session.
Throughout the process, NAICU will advocate for Congress to double Pell, and for increased funding for the student aid programs.