What the funding package means for colleges, students

Photo: Matthew Dembicki/AACC

Congress on Sunday reached a deal on the long-awaited pandemic relief funding as the omnibus spending bill to keep the government running. The $900 billion pandemic funding bill will be combined with the $1.4 trillion government funding deal for fiscal year 2021.

At our press time, the funding package was expected to be passed Monday.

The big takeaways from the relief package include $300 in weekly federal unemployment insurance payments through March 14, direct payments of $600 for individuals and $82 billion for education. Included in that education funding is nearly $23 billion for a higher education fund, more than $54 billion for public K-12 schools and more than $4 billion for a governors’ relief fund.

Higher ed funding and compromises

Some higher education compromises in the fiscal year 2021 omnibus spending deal may help boost college enrollments, which have dropped during the pandemic. 

The bill expands the Pell Grant program so that hundreds of thousands of students will become newly eligible for Pell and millions of current recipients will receive larger awards. The bill also includes a bipartisan agreement to deliver Pell grants to incarcerated students and it restores Pell Grant eligibility for students defrauded by for-profit institutions.  

The measure will streamline the Free Application for Federal Student Aid (FAFSA) by cutting the number of questions from 108 to 36. A confusing restriction that limits eligibility for subsidized federal loans to low-income students will be eliminated.

The legislation also will forgive $1.34 billion in loans made to historically black colleges and universities (HBCUs) under the HBCU Capital Financing Loan program.

“This bipartisan agreement is a significant step toward making higher education more affordable for millions of Americans,” Rep. Bobby Scott (D-Virginia), chair of the House Education and Labor Committee, said in a release. “While this is not the comprehensive overhaul of the Higher Education Act and there is still work to be done, this proposal will help millions of students.”

Other boosts

The funding package also will boost broadband with a $7 billion investment in expanding broadband access for students, families and unemployed workers. That investment includes $300 million for rural broadband. That’s good news as many colleges will continue with online-only learning in 2021.

There also could be a small dose of relief for food- and housing-insecure students. The stimulus package includes $25 billion for a new federal rental assistance program. It’ll allow state and local governments to help people who are unable to pay rent and are facing eviction. And $26 billion in food/farm aid will increase food stamp benefits by 15% for six months, as well as providing funding to food banks.

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