- Debt ceiling deal – What happens next?
- Student debt cancellation faces uncertain future
- Title IX delays
- Funding opportunities
Debt ceiling deal – What happens next?
Over the weekend, President Joe Biden and House Speaker Kevin McCarthy (R-California) announced an agreement to raise the nation’s debt ceiling. Party leadership is now shopping the package with their members to generate enough bipartisan support to pass both chambers and be signed into law by the president ahead of the projected deadline of June 5.
Both parties have made significant compromises from their earlier negotiating positions to reach this deal, including overall spending limits and on certain policy asks. House Republicans’ initial plan, the Limit, Save, and Grow Act, capped non-defense spending at fiscal year (FY) 2022 levels, which would likely lead to significant cuts across all programs and some programs being eliminated altogether. The bill also blocked Biden’s student debt relief plan, blocked the implementation of the new, borrower-friendly income-driven repayment (IDR) plan, ended the student debt payment pause and retroactively applied interest, and curtailed the education secretary’s authority to make changes to the student debt program that would result in additional costs.
Biden, by contrast, had asked for increased investment in non-defense programs, including key departments of Education (ED) and Labor (DOL) programs, in the administration’s FY 24 budget request.
The compromise deal moderates these requests. Instead of a firm FY 22 spending limit for FY 24, the parties agreed to keep non-defense spending level at current FY 23 levels, with a 1% allowable increase for the following fiscal year. Due to inflation, this will constrain both new and existing spending, but will likely result in haircuts, rather than dramatic decreases in funding levels.
On the policy items, Republicans were unable to block President Biden’s student loan relief plan, new IDR plan, and changes to the secretary’s authority over the loan programs. They did, however, reach a compromise with the White House to end the student loan repayment pause in August. Student loan repayment was expected to resume in the coming months anyway (the exact date depends on the fate of the loan relief plan), with ED officials working hard to streamline reentry into repayment for millions of borrowers. However, with the pause being extended many times, it has become a priority of Congressional Republicans to prevent another extension.
If the debt ceiling compromise is signed into law as expected, it will suspend the debt limit until January 2025 – punting another debt ceiling fight until after the 2024 elections.
Student debt cancellation faces uncertain future
While Biden’s student debt relief plan survived the debt ceiling negotiations, it continues to face stiff headwinds. Last week, the full House approved House Resolution 45, which invokes the Congressional Review Act (CRA), a somewhat arcane legislative procedure, to nullify the debt cancellation plan. While the resolution is considered dead-on-arrival in the Democrat-held Senate, it underscores Congressional Republicans’ continued energy around this issue.
Both supporters and opponents of the debt relief plan are anxiously awaiting the Supreme Court’s ruling on the issue. Oral arguments were heard in the fall, with the conservative majority expressing skepticism about the constitutionality of the plan, but also raising some questions as to the plaintiff’s claim to standing. A decision is expected before the Court recesses in June. If the debt relief plan survives this challenge, Congressional Republicans will likely make student loan repayment an even more significant policy and campaign issue over the next year.
Title IX delays
ED announced that they are delaying the release of the final Title IX rule, governing how institutions provide equal opportunity in programs for students regardless of gender. Title IX regulations have generated intense debate, particularly around campus sexual assault and transgender students’ participation in sports. AACC provided comments on the rule, underscoring the need for clear expectations for colleges, asking for changes to avoid unnecessary burden, and requesting ample time for colleges to implement new requirements.
While the final rule was initially expected in May, ED announced a new anticipated date of October. AACC is carefully monitoring the rulemaking process for these important regulations, with an eye toward the impact of the delay on implementation timelines and burden for community colleges.
Funding opportunities
Applications are open for key community college funding opportunities:
- Native American-Serving Nontribal Institutions (NASNTI) Program – Due June 12
- Rural Postsecondary and Economic Development Grant Program – Due June 20
- Building Pathways to Infrastructure Jobs Grant Program – Due July 7 for the first round
- Advanced Technological Education (ATE) – Due October 5
In addition, AACC hosted a webinar last week with U.S. Department of Commerce officials on funding and partnership opportunities available to community colleges through the CHIPS and Science Act. The webinar recording is now available. Also, stay tuned for a webinar next week on ED’s gainful employment regulations.
For more detailed information on these issues, visit the Community College Advocacy Updates page on our website. Send questions, feedback and more to: kgimborys@aacc.nche.edu.
