Congress could simplify FAFSA, expand Pell grant access in spending bill

House and Senate leaders have been negotiating the provisions for weeks and announced details of the higher education measures Sunday, although Congress has yet to release the final text of the spending bill. The year-end funding legislation is attached to the latest pandemic relief package agreed to Sunday evening. Legislators are likely to vote on the package as early as Monday.

“The package released today includes a wide range of provisions — secured by House Democrats — that will make federal grants and loans more accessible and more generous, particularly for our most vulnerable students,” said Rep. Robert C. “Bobby” Scott (D-Va.), chairman of the House Education Committee. “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.”

Lawmakers have agreed to reduce the number of questions on the aid application from 108 to 36 and limit requirements for students experiencing homelessness and those formerly in foster care to receive financial assistance. They will also shield more of the money working students earn from the formula used to determine aid.

The legislation will reinstate Pell eligibility for students defrauded by their college and ensure that all families who make less than 175 percent, and single parents who make less than 225 percent, of the federal poverty level will receive a maximum award. Lawmakers say those changes will enable an additional 1.7 million students to qualify for the maximum award each year and make another 555,000 newly eligible.

The bill will also end a decades-old ban on providing Pell Grants to prison inmates and restore aid eligibility to students who have been convicted of a drug offense. What’s more, it would extend the amount of time undergraduates can attend without accruing interest on their need-based federal student loans.

Taken as a whole, the legislative changes could extend financial support to more students at a time when the pandemic and ensuing recession are pushing higher education further out of reach for many.

Freshman enrollment declined 13.1 percent this fall compared with the prior year, while overall college enrollment was down 2.4 percent during the same period, according to the latest data from the National Student Clearinghouse Research Center.

“During this time of crisis, lawmakers showed up for students by expanding Pell Grant eligibility and lengthening students’ eligibility for subsidized loans,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators, noting he is awaiting the final text for full review.

Sen. Lamar Alexander (R-Tenn.), chairman of the Health, Education, Labor and Pensions Committee, championed several of the initiatives, including shortening the financial aid form and lifting the ban on Pell Grants for inmates. Bipartisan support for ending the ban has grown in recent years. The Obama administration created a small pilot program to help prisoners earn a degree using grant aid while incarcerated, an initiative that was expanded under President Trump.

Alexander’s pursuit of FAFSA simplification has become a hallmark of his congressional career, which will come to an end next month. During his farewell speech on the Senate floor earlier this month, he said simplifying the FAFSA was one of the issues he “cared most about.”

On Sunday, Alexander issued a statement saying whittling down the aid application “will remove the biggest barrier to helping more low-income students pursue higher education.”

Alexander had pushed many of the same financial aid reforms in a package of higher-education proposals he introduced last year. He had tried to advance the reforms alongside legislation to fund minority-serving colleges, but Senate Democrats argued against what they saw as a piecemeal approach to reauthorizing the federal law governing higher education.

Alexander and Sen. Patty Murray (Wash.), the education committee’s ranking Democrat, ultimately agreed in December 2019 to a funding bill for minority-serving schools that features a core component of his package. The legislation makes it easier for the Education Department and the Internal Revenue Service to share taxpayer data so students can speed through the aid application.

Murray is still aiming for a comprehensive update of the Higher Education Act, but aides say she did not want to miss an opportunity to make college more affordable with all of the momentum Alexander had built behind streamlining the FAFSA.

“I’ll keep fighting to build on this progress and make higher education more affordable, accessible, accountable, and safer for all students,” Murray said Sunday.

In addition to the financial aid changes, the omnibus bill includes a provision to discharge $1.34 billion in loans made to historically Black colleges and universities through the HBCU Capital Financing Program. The federal program provides low-cost capital to help historically Black institutions upgrade their campuses and refinance debt.

Congress previously waived interest and deferred payments on loans made through the federal program as part of the stimulus bill enacted earlier in the year.

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