News Release

Congress’ grade on funding higher education: Incomplete

FY21 federal budget makes some positive changes for higher education, but there is still work to do

WASHINGTON -- The recently passed bill to fund the government for FY21 addresses some of the challenges exacerbated by the COVID-19 pandemic that face students and higher education institutions, but does not resolve many other problems. Congress could alleviate some of those issues by extending the student loan repayment freeze, significantly increasing Pell Grants and extending more aid directly to students and colleges. The new budget bill did not include -- or included only watered-down versions of -- those policies, despite calls for stronger action from U.S. PIRG and other advocacy groups. 

“Without enough financial assistance, students may not be able to return to school next semester, borrowers may default on their loans and colleges may need to lay off staff or eliminate student services,” said Zack Szlezinger, U.S. PIRG higher education campaign associate. “An associate’s or bachelor’s degree has become the price of entry to a fulfilling career in recent years. Congress has an obligation to make obtaining a diploma as simple and affordable as possible and while they made some progress, they didn’t do well enough.”

The most immediate concern not addressed by Congress may require executive action from President-elect Joe Biden as soon as he enters the Oval Office. The student loan repayment freeze ends in February 2021, despite a bipartisan Senate proposal to extend it a few months. Seventy-seven percent of surveyed students say that they will not feel financially secure enough to resume repayment until June, 2021.

In addition to students facing financial hardship, their schools are as well. College campuses were some of the first places to shut down as COVID-19 first spread widely across the United States in March. Since then, administrations have spent enormous amounts of money to maintain facilities, provide remote instruction and keep essential staff safe, while dealing with dwindling tuition income. The $14 billion provided by the CARES Act in March helped, but that money dried up quickly, leaving both students and institutions struggling. 

A coalition representing colleges and universities told Congress over the summer that it would take at least another $120 billion to fully meet their needs. The new budget bill will provide institutions with an additional $20 billion, which while far short of their request, will help colleges maintain operations as they enter their third semester of the pandemic. Half of that money will be emergency grants for vulnerable students.

One place where Congress made significant changes was in expanding Pell Grants. More than half a million students who were previously ineligible for these grants will now have access and they will be notified earlier about their eligibility. However, the maximum award only increased by $150, which is far from enough for the neediest students to cover the cost of college.

Other successes of the budget that will help students, borrowers, and institutions include:

  • Simplifying the Free Application for Federal Student Aid (FAFSA) -- an essential financial aid tool -- from 108 questions to 36 questions

  • $5 million in grants to provide for students’ basic needs

  • $7 million dollars for an open textbook pilot program to support the creation of open textbooks

  • Invests more than $300 million in historically black colleges and universities, which have been historically underfunded by the government, and forgives more than $1 billion in outstanding debt held by those colleges.

“These improvements affecting students and borrowers demonstrate a  bipartisan commitment to higher education and a desire to help Americans pursue an affordable degree,” said Szlezinger. “Now, we need Congress to act at the scale needed to help America’s colleges weather what will hopefully be the final semester of the pandemic.”

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