On December 20, President Trump signed a bill finalizing funding for the government for fiscal year (FY) 2020. The bill includes finalized funding and provisions for the Department of Education (ED), including increases to the Pell Grant and Federal Supplemental Education Opportunity Grant (FSEOG) and language addressing federal loan servicers and foreign gift reporting requirements.
Budget allocations for ED programs include:
- Raises the maximum Pell grant award by $150 to $6,345, which includes a $500 million recession from the reserve fund.
- Increases funding for FSEOG to $865 million, a $25 million increase from FY2019.
- Boosts Federal Work Study by $50 million to $1.2 million for FY 2020.
- Provides $72.8 billion in discretionary funding for ED, a $1.3 billion increase from FY2019.
- Distributes $1.8 billion for the administration of federal student aid.
The bill also addresses ongoing ED issues, including:
- Support for data-sharing between ED and the Internal Revenue Service, which is included in the FUTURE Act.
- Language for ED to hold loan servicers and Federal Student Aid (FSA) contractors accountable for high-quality outcomes and contract requirements. The provision prevents ED from awarding new contracts to servicers that have a history of skirting consumer laws.
- Requirement for ED to include multiple services in its NextGen Financial Services environment.
- Direction to ensure foreign gift requirements are clear and provide guidance to institutions to meet responsibilities.
- Allow students and families to use up to $10,000 from their 529 college savings accounts to repay education loans.
With final funding levels now set, ED will be able to set the 2020-2021 Pell Grant payment and disbursement schedules no later than February 1.
Sources:
Final FY 2020 Funding Bill Increases Maximum Pell, Addresses Issues With Loan Servicers, Foreign Gift Reporting
The Washington Post: What the $1.4 trillion budget deal has in store for education
InsideHigherEd: Cuts Averted in Budget Deal