NAICU Washington Update

House Education Committee Writes Reconciliation Bill; Increases Pell by Just $500

September 10, 2021

As part of the FY 2022 budget reconciliation process, the House Committee on Education and Labor wrote its version of the “Build Back Better” legislation to meet the September 15 deadline for Committee reports outlined in the reconciliation plan approved by Congress.  The committee will resume consideration of amendments Friday afternoon, then the bill is expected to pass committee on a party line vote. 

Overall, the $760 billion bill prioritizes helping parents return to work by providing $450 billion for child care and universal pre-K through the Department of Health and Human Services. The next largest allocation is $111 billion for higher education proposals, followed by $82 billion for school construction, $80 billion for workforce development, and $35 billion for child nutrition programs. 

The bill includes the Biden Administration’s higher education priorities, but at greatly reduced funding levels from his FY 2022 budget request. Most notable is that while the president’s budget requested a $1,475 increase in the Pell Grant maximum through reconciliation, the committee provided only a $500 increase. The $500 increase is paid for and maintained for eight years. If this were enacted, along with the $400 appropriated increase proposed by the House Committee on Appropriations, the Pell Grant maximum would increase $900 to $7,395 for FY 2022. NAICU’s top priority request is for Congress to double the Pell Grant maximum to $13,000.  
Other higher education proposals in the bill, summarized below, include free community college, new college completion grants, investments in HBCUs and MSIs, and teacher preparation.  None of these are funded at the levels proposed in the president’s budget. 

Next Steps 

Once all House committees have written their bills, the House Committee on the Budget will combine the bills into a $3.5 billion omnibus budget reconciliation package for a floor vote. 

In the Senate, the next step in the process is for the Health, Education, Labor and Pensions (HELP) Committee to write its version of this bill. This markup has not yet been scheduled.  According to the budget resolution, the HELP committee has $726 billion to address the same jurisdiction for education as the House committee.  The two committees’ slightly different jurisdictions for health and child nutrition programs is the reason for the difference in allocations. 

While the House bill’s funding levels do not reach the Administration’s requested amounts, they may represent the high-water mark for the congressional reconciliation process. A new disagreement among Senate Democrats over how much should be spent on the overall reconciliation effort could lower the committee allocation, and slow down the completion of a final product. The $3.5 trillion total for the reconciliation package amount was negotiated between the White House and Senate Democrats this summer. The House leadership assured the White House it could pass whatever the Senate is able to approve with its 50-50 split between Democrats and Republicans (the Vice President is the tie-breaker). However, even though they supported the budget resolution, Senators Joe Manchin (D-WV) and Kirsten Sinema (D-AZ) now have said they will not support a final package that spends $3.5 trillion. For the Senate to keep all 50 Democrats in support of reconciliation, total spending could be cut by half. Such a reduction of the package size would filter down to smaller allocations for the committees, and the need to further scale back proposals. 

Summary of Higher Education Provisions

America’s College Promise (ACP): This program is the Biden Administration’s top priority.  The ACP would create a federal-state partnership that provides for free community college through tuition waivers. Funding is provided for five years to states based on the number of students enrolled in public community colleges and the national median resident community college tuition and fees. Two-year private, nonprofit colleges and their students are not included in the program or the formula.  

After the first year, states have to provide matching funds for federal dollars. The bill includes a state maintenance of effort provision that protects state-funded need-based grant aid, which includes the need-based grant aid states provide to students at private, nonprofit institutions but does not include institutional support for private, nonprofit colleges. 

State receipt of federal funds to provide tuition waivers is conditioned by requiring the state to engage in educational and institutional reforms to improve student outcomes. These include alignment between state secondary and postsecondary coursework plans and transfer pathways; providing comprehensive academic, career and student support; and ensuring students know about and how to access means-tested state and federal benefit programs. If states have remaining funds, they are allowed to provide need-based financial aid to students, or reduce unmet need at public 4-year institutions. 

Retention and Completion Competitive Grants: The $9 billion in funding provided over 8 years for this program is quite different than the $62 billion completion program envisioned in the president’s budget. The committee’s version of the program only allows states that participate in ACP to apply for completion grants to: implement evidence-based institutional reforms to improve student outcomes; implement system-wide improvements; set benchmarks to track progress; and increase support for public institutions. Student outcomes include improvements in retention, completion, transfer and labor market outcomes.   

Private, nonprofit institutions are not excluded from participating in state education reforms, however, the eligible entity for the grant is the state, and the emphasis and priority for awarding grants are focused on students and activities at public colleges and universities. 

Tuition Assistance for Students at HBCUs and MSIs: The bill includes funding for eight years, using a formula based on the number of low-income students at the institution multiplied by the median resident community college tuition nationally. Again, the committee proposal is scaled back from the original concept for this provision, which was tied to actual institutional tuition. To be eligible, at least 35% of enrolled students at a Minority-Serving Institution must be low-income.  Institutions eligible under the Strengthening Institutions Program (SIP) are not included in the proposal.  

DACA Students: The bill includes language making DACA students eligible for Title IV federal student aid for five years. 

Institutional Aid for HBCUs, MSIs: The bill provides $1.45 billion over five years to increase existing institutional aid programs.  SIP institution funding is not increased. 

Research and Development Infrastructure Competitive Grant: The bill includes a new program in Title III providing $2 billion over seven years to develop research capacity at institutions under this Title, which are four-year institutions not classified by Carnegie as “very high research” schools.  While HBCUs and other MSIs are eligible, the program does not include SIP institutions.

Teacher Preparation: In response to the national teacher shortage, the bill includes $197 million for Grow Your Own Programs for schools to develop their own teachers, $198 million for Teacher Residency Programs for prospective teachers in a bachelor’s or master’s degree program, and $198 million for the Augustus Hawkins Program, for teacher preparation at HBCUs. All programs are funded for four years. 

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