On Monday, December 21, Congress introduced the Consolidated Appropriations Act, 2021. This bill provides additional pandemic relief for higher education institutions, funding for fiscal year (FY) 2021, and makes several related policy changes.
The bill provides the funding for FY 21, including a $150 increase to the maximum Pell Grant (bringing the maximum to $6,495 for the 2021-2022 aid year) and a $25 million funding increase for campus-based programs, with $1.19 billion for Federal Work Study and $880 million for the Federal Supplemental Educational Opportunity Grant (FSEOG) program, and nearly $23 billion in additional COVID-19 relief funds for higher education.
The Consolidated Appropriations Act also provides relief for higher education institutions through the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act with nearly $23 billion directly provided to higher education institutions, using the same HEERF model established in the CARES Act. However, the CRRSA allocation formula will include the student headcount, unlike the CARES Act which only considered full-time equivalent enrollment. The formula to determine how much funding is provided to each institution is based on:
- 37.5% on FTE enrollment of Pell Grant recipients not enrolled exclusively in distance education courses prior to the qualifying emergency
- 37.5% on headcount enrollment of Pell recipients not enrolled exclusively in distance education courses prior to the qualifying emergency
- 11.5% on FTE enrollment of non-Pell recipients not enrolled exclusively in distance education courses prior to the qualifying emergency
- 11.5% on headcount enrollment of non-Pell recipients not enrolled exclusively in distance education courses prior to the qualifying emergency;
- 1% based on FTE enrollment of Pell recipients exclusively enrolled in distance education course prior to the qualifying emergency
- 1% based on headcount of Pell recipients exclusively enrolled in distance education courses prior to the qualifying emergency
Of the $23 billion that will be provided to institutions, $20 billion will be allocated to public and private nonprofit schools and $681 million is set aside for for-profit institutions. The CRRSA allows nonprofit institutions more flexibility than the CARES Act, with schools able to spend the funding to reimburse expenses associated with COVID-19 and no requirement to spend at least 50% of the allocation on student grants. However, funds received by for-profit institutions are only allowed to be used for emergency grants for students. With the CRSSA funds, there are no requirements for student eligibility, aside from prioritizing students with exceptional financial need. Student grants may be used to cover any component of the cost of attendance or emergency costs that arise due to COVID-19.
The bill also provides $1.7 billion to minority-serving institutions and $113.5 million for institutions with the greatest unmet need.
Policy Changes
In addition to COVID-19 relief, the Consolidated Appropriations Act made several higher education policy changes, such as simplifying the FAFSA and expanding the Pell Grant program to incarcerated students.
The proposal includes a special rule that gives financial aid administrators flexibility during a disaster, emergency, or economic turndown to determine that income earned from work is “zero” if the applicant can provide documentation. It also restores eligibility for the Pell Grant to incarcerated individuals and individuals who have successful borrower defense to repayment claims.
Significant changes were made to the FAFSA, which include updates to the simplified needs test, modifications to the definition of “cost of attendance,” “untaxed income and benefits,” and “independent student,” changes to the treatment of multiple students in college, and new Pell Grant eligibility criteria. Additionally, the term “Expected Family Contribution” (EFC) has been replaced with the “Student Aid Index (SAI).” A later post will detail the changes to the FAFSA, which will not go into effect until the 2023–24 award year.
President Trump is signed the Consolidated Appropriations Act, 2021, on December 27, 2020.
Source:
NASFAA: Congress Releases Bipartisan Year-End Spending Deal, FAFSA Simplification, COVID Relief, and Other Student Aid Provisions
House: Consolidated Appropriations Act