Washington Watch: Big gains at stake

Much is at stake for community colleges as Democratic leaders maneuver this week to pass the revised Build Back Better (BBB) plan. Even without America’s College Promise, the legislation contains a bevy of provisions that would dramatically and positively impact campuses.

The American Association of Community Colleges (AACC) has formally endorsed the bill.  

In his statement, AACC President and CEO Walter Bumphus stated noted that “the revised Build Back Better Act will do much to enhance community college programs and services that support access and success for the nation’s 11.8 million community college students.”

Many of the bill’s items embody longstanding AACC priorities. In addition to what is summarized below, AACC is optimistic that a community college-led workforce education program of $5 billion or more will be added to the legislation before enactment. The BBB legislation approved by the House Budget Committee contained community college job training programs authorized by both the House Ways and Means and Education and Labor committees.

Key features of the BBB

Pell Grants: The legislation calls to increase the Pell Grant maximum by $550 for four years, from academic years 2022-23 through 2025-26. For-profit institution students would not receive the increase. FAFSA applicants who in the past 24 months have received or, in the case of dependent students, whose parents have received, a means-tested federal benefit automatically qualify for the maximum Pell Grant.  

AACC is also hopeful that a significant increase in the Pell Grant maximum will be secured through the fiscal year (FY) 2022 funding process. Both Hose and Senate Congressional Democrats support a $400 increase.

Title IV eligibility for some undocumented students: Undocumented students who are protected from deportation under the Deferred Action for Childhood Arrivals program, or who have temporary protected or deferred enforced departure status, are made eligible for all Higher Education Act Title IV student aid. 

Retention and Completion Grants: The compromise BBB provides $500 million for the U.S. Education Department (ED) to award grants to states, systems of higher education institutions, and tribal colleges and universities (TCUs) to improve student outcomes. A similar program was included in the America’s College Promise program.

Grantees must use funds to implement one or more of five delineated “evidence-based reforms or practices,” which include comprehensive support services, assistance in applying for means-based programs, accelerated learning opportunities such as dual enrollment, remedial education reform, and improving transfer pathways. At least $142.5 million is set aside to make supplementary awards to grantees implementing reforms that meet meeting certain evidence standards. To continue receiving funds, grantees must demonstrate adequate progress in improving outcomes among underserved students. Matching funds are required. 

Institutional aid: The modified BBB provides $6 billion to increase mandatory appropriations to historically Black colleges and universities (HBCUs), TCUs and minority-serving institutions (MSIs) for activities currently authorized under the Higher Education Act and also provides new authority to award need-based financial aid to low-income students. It is unclear whether institutions must dedicate a certain amount to financial aid. The $6 billion is a substantial increase from what was included in the original BBB provides annually for the new five fiscal years:

  • $470.6 million – HSI STEM and articulation programs.
  • $470.6 million – HBCUs and predominately black Institutions (85% and 15%, respectively)
  • $141.1 million – TCUs
  • $70.5 million – Alaska Native-serving and Native Hawaiian-serving institutions
  • $23.5 million – Asian American and Native American Pacific Islander-serving institutions
  • $23.5 million – Native American-serving nontribal institutions

Department of Labor: Additional funding is provided for programs authorized by the Workforce Innovation and Opportunity Act (WIOA) and other Department of Labor programs. Following are select programs of particular interest to community colleges (all funds are authorized over a five-year period, through FY 2026):

  • $2 billion – WIOA Dislocated Workers; $1 billion – WIOA Adult Training; $1.5 billion – WIOA Youth
  • $1 billion – Registered, Youth, and Pre-Apprenticeship ($500 million earmarked for grantees serving high numbers or percentages of workers with barriers to employment)
  • $4.6 billion – Industry or Sector Partnership Grants. This new competitive grant program would make awards to industry sector partnerships and state and local workforce development boards to create partnerships, provide training and supportive services, and other activities. Community colleges could be part of these partnerships.

Adult Basic Education and Perkins CTE: $700 million, available through FY 2026, is provided to ED’s Adult Education and Family Literacy program. $600 million is provided to Perkins CTE Basic State Grants and $100 million would go to the Perkins Act innovation and modernization grant program. All these funds will be in addition to those provided through the regular appropriations process.

New workforce-related programs: BBB creates several new multi-billion programs that contain workforce education components. These include a program focused on the direct care workforce and programs aimed at training youths and others to perform jobs related to climate change. Community colleges may be able to participate in some of these programs either as direct grantees or within partnerships.

Taxation of Pell grants/American Opportunity Tax Credit (AOTC) eligibility: In a great achievement for AACC’s advocacy efforts, the BBB would eliminate taxes on Pell grants. Just as significantly, the legislation eliminates the provision that reduced a student’s AOTC eligibility by any Pell Grant amounts received. The latter change would allow hundreds of thousands of community college students to qualify for the $2,500 tax credit. 

The association thanks the many of its members who contributed to adoption of this provision, within the context of legislation that, overall, raised rather than reduced revenue. The Tax-Free Pell Grant Act was given an official cost of $1.9 billion over 10 years.

On the cutting room floor  

The exclusion from the final bill of “free community college,” as embodied in the America’s College Promise (ACP) Act, was a major disappointment to community college advocates, given President Joe Biden’s support and the sheer size of the BBB. The House Education and Labor Committee had included ACP in its $776 billion BBB spending provisions and modified the program to make it more attractive for states to participate initially. However, a variety of factors contributed to its exclusion from the final legislation, starting with the program’s cost. Nevertheless, AACC will continue to strongly support the initiative in the months to come.

The legislation also did not include the $12 billion in community college infrastructure funding proposed by Biden. AACC estimates sector-wide deferred maintenance and renovation costs at $60 billion, and campuses were hoping for new support.

Enactment of even the slimmed-down BBB would represent a watershed for community colleges and their students. Community college advocates will therefore be closely watching the ongoing political machinations aimed at passing the bill. 

About the Author

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