Press Release/Statement | December 21, 2020

TICAS Statement on Omnibus Spending Bill

Author: Statement of Jessica Thompson

“The COVID-19 pandemic threatens to exacerbate inequities in college access and degree attainment for years to come. Lost jobs and wages fall most heavily on low-income students and students of color, while state budget cuts threaten higher tuition, more student debt, and a narrower path to economic security.

“With the long-awaited passage of today’s omnibus spending bill, Congress will take a crucial step toward mitigating the devastating effects of the COVID-19 pandemic and recession on students and colleges. The bill includes emergency relief to staunch immediate wounds as well as policy changes that, together, will simplify and expand access to the Pell Grant for millions of students in the future.

“However, the bill fails to extend or expand the federal student loan payment and interest pause included in the CARES Act (and extended by the Education Department). Those benefits are set to expire on February 1, 2021. The result will be weeks of unnecessary chaos and uncertainty as borrowers wait to see if the Biden Administration will extend the pause upon taking office on January 20, 2021.

“While important, today’s legislation is only one step. Students, colleges, and student loan borrowers will need significantly more help than the bill provides. Its passage positions the new Congress and Administration to take the next necessary steps: delivering additional support to states and colleges, ensuring states reinvest in colleges as the economy recovers, strengthening protections for students against low-quality colleges, delivering loan relief to struggling borrowers, and working toward doubling the Pell Grant to close equity gaps in college enrollment and completion.

“Today’s legislation includes $20 billion in direct funding to colleges and universities, at least half of which should go directly to students in the form of additional fianancial aid. Appropriators also provided a $150 increase to the maximum Pell Grant to ensure it at least keeps up with inflation.

“The bill also includes the following provisions to simplify the federal financial aid application process and expand access to the Pell Grant program:

  • Enables students to receive earlier notifications about whether they will qualify for the maximum Pell Grant, based on their income and family size;
  • Increases grants for low-income students by shielding earned income for students and their parents, a calculation known as the income protection allowance;
  • Restores Pell Grant eligibility for borrowers whose loans are discharged through borrower defense due to illegal conduct by their colleges;
  • Restores Pell Grant eligibility for students who are incarcerated and for students previously convicted of a drug-related offense;
  • Eases the financial aid application process for students formerly in foster care and students experiencing homelessness;
  • Makes critical investments in Historically Black Colleges and Universities (HBCUs); and
  • Eliminates an unnecessary and complicated limit on students’ ability to receive subsidized loans for the full length of their educational career (known as the Direct Subsidized Loan Limit, or SULA).

“These provisions affirm the continued commitment that policymakers on both sides of the aisle share to invest in and expand access to the Pell Grant program. Pell Grants are the federal government’s most effective investment in college affordability, yet the share of college costs covered by the grant is at an all-time low. We continue to urge Congress to make significant new investments in the program by doubling the maximum grant to truly close equity gaps in affordability and attainment.

“We also implore Congress to make another round of investments in colleges and universities in 2021 to help them weather the continuing effects of the pandemic, as well as to help drive our nation’s long-term economic recovery. Without more help from the federal government and strong maintenance-of-effort requirements, states are likely to make significant cuts in funding for higher education, forcing public colleges to raise tuition and squeeze students and families at a time when they can little afford it. In turn, states have a responsibility to reinvest as their budgets recover, particularly in underfunded colleges serving the most low-income students and students of color.”

Note: This statement has been updated to reflect additional review of legislative language.