Washington Watch: Help through stimulus legislation

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The intense debate over stimulus legislation in the Senate, which has critical financial implications for community colleges, was joined by House Democrats on Monday with the offering of their own legislation. 

The Senate Republican legislation that is bottled up on the Senate floor would provide slightly less than $6 billion for all higher education through an “Education Stabilization Fund,” with those funds to be divided equally between institutions and students impacted by COVID-19. States would also be given $2 billion to award across all of education.  

In allocating funds, 75 percent of what each college receives would be based on its relative share of FTEs that are Pell Grant recipients, and 25 percent on its relative share of FTEs that are not Pell recipients. The Senate Republicans’ approach to providing education assistance is commendable, but the funding is woefully inadequate to ameliorate the large financial losses already incurred by community colleges, with more sure to come.

The Senate legislation also includes $100 million for dislocated worker assistance, and approximately $300 million in assistance to Title III and Title V institutions.  

The Senate legislation includes changes to the Higher Education Act (HEA) that would help institutions remain in compliance with Title IV requirements, and ensure students receive student aid support and related accommodations. These include:

  • Waiving “Return of Title IV” requirements as well as standards of satisfactory academic progress for both students and institutions impacted by the emergency
  • Waiving the institutional match on Federal Work Study (FWS) and Supplemental Educational Opportunity Grants (SEOG) for award years impacted by COVID-19
  • Allowing institutions to transfer FWS to SEOG, and providing additional grant-awarding flexibility within SEOG
  • Allowing colleges to pay FWS students who are impacted by the ongoing emergency and unable to work as a result, for up to one academic year

Senate Democratic leaders have also stated their strong support for forgiving student loan debts up to $10,000.  Most community college borrowers would have their entire balances forgiven under this scheme.

The House Democratic legislation includes a number of major higher education expenditures. It establishes a $30 billion State Fiscal Stabilization Fund at the Department of Education. Thirty percent of these funds are to go to public higher education institutions, distributed equally on the basis of the Pell Grant FTE equivalent and FTE equivalent.  

The legislation also includes $1.5 billion for institutional assistance under HEA Titles III and V, and $8 billion in institutional grants through FIPSE. The latter of these funds would primarily go to private institutions as any institution that receives funds through the State Fiscal Stabilization Fund would be ineligible to receive the FIPSE funding.

The House bill also includes $960 million for job training programs authorized by the Workforce Innovation and Opportunity Act that includes $150 million for the new Strengthening Community College Training Program created at the Department of Labor in last year’s appropriations legislation. The House Democrats’ legislation also provides the programmatic flexibility and accommodation as in the Senate Republican legislation.

In these very fluid circumstances, these are AACC’s priorities that we ask you to communicate to your legislators for this legislation:

  • At Least $50 billion of Emergency Financial Aid to Students and Support for Institutions:

Colleges and students alike are desperate for support to cope with their radically changed financial circumstances as a result of this crisis. Scores of community colleges are facing immediate cash crunches because of the need to refund tuition to students, and the abrupt transition to almost 100 percent online learning. Other activities that generate revenue have also been curtailed and enrollment disruptions in the summer and upcoming school year could impact the fiscal outlook of institutions moving forward. 

At least 25 percent of these grants must be delivered as emergency aid to students. Currently, there are many community college students who have not been able to make the immediate transition to online learning because of a lack of resources, including connectivity. 

 To help colleges make a transition to online education, a separate technology program that ensures funds are provided as quickly as possible will be necessary. This could be accomplished through the Title III-A, Strengthening Institutions program, but there are other vehicles that could also be utilized.

  • $1 Billion For Two Years For Community Colleges to Train Individuals to Meet Current Necessities and to Heal the Crippled Economy: 

Community colleges are well-positioned to help meet the immediate increased demands for health care professionals. COVID-19 will likely remain a threat to public health for at least another year. With targeted assistance, community colleges can help meet the demand for greater numbers of nurses and allied health professionals that will undoubtedly be needed.

It is impossible to predict the full extent of the abrupt economic downturn. However, it is certain that, with millions of individuals rendered unemployed and businesses closing doors, the nation will need to rebuild economically in the coming months. Community colleges are critical to help build a strong economy and address the pronounced skills gap that emerged in recent years. The sector supports a program modeled on the highly successful Trade Adjustment Assistance Community College and Career Training Program, or the Strengthening Community College Training Program, created in last year’s appropriation legislation. An investment of $1.0 billion per year for at least two years would sustain a vital workforce education program connected tightly to business.

  • Help Stabilize State Support for Institutions of Higher Education:

State budgets are headed for tremendous shortfalls, and by law they must be balanced each year. In this process, community colleges are inevitably subject to deep reductions because they are often perceived to be more “discretionary” than healthcare, prisons, and other types of expenditures. Congress should establish a State Higher Education Fiscal Stabilization Fund to help colleges manage this extreme financial stress.  

About the Author

David Baime
is senior vice president for government relations and policy analysis at the American Association of Community Colleges.