- Deadline looms as lawmakers return from August recess
- Department of Labor announces new rule on overtime exemptions
- Department of Education moves ahead with rulemaking session on student debt cancellation
- Funding opportunities
Congressional lawmakers have spent the August recess visiting their home states, districts, and (hopefully) community colleges, but they have a daunting task awaiting them when they return to D.C. September 30 marks the end of fiscal year 2023 (FY 23), with funding for the federal government set to expire then absent Congressional action. Most political observers think that a government shutdown is a real possibility.
Under the terms of the debt ceiling deal struck earlier this year between President Biden and House Republicans, Congress is under significant pressure to pass the twelve appropriations bills that fund the government by the end of the calendar year; otherwise, there will be a 1 percent haircut for all programs, including defense programs. However, there is little to no chance of lawmakers enacting new Fiscal Year 2024 (FY 24) bills before the September 30 deadline.
While the Senate and House Appropriations Committees have made much progress in writing their funding bills, there are significant differences in their total funding levels. The Democrat-held Senate is pushing for funding up to the cap amount agreed to in the debt ceiling deal, while House Republicans wants to see even greater reductions in domestic spending. Some Republican members of the far right are calling for even more draconian cuts and conservative policy riders. This environment makes passing a final funding package by the end of the year extremely challenging. AACC’s Jim Hermes has more information on these appropriations dynamics.
Lawmakers will need to pass a temporary appropriations bill – called a continuing resolution (CR) – to keep the federal government open after October 1. A CR will likely extend FY 23 funding levels for an agreed-upon period (likely to be the end of the calendar year, given the 1 percent penalty mentioned above). This will allow the federal government to continue operating while lawmakers pass a final budget. However, there are concerns that Congress will not be able to agree on the terms of a CR before the September 30 deadline, with the House Freedom Caucus signaling that they will use the threat of a shutdown to secure additional cuts for FY 24.
A government shutdown would impact government staffing and program administration. All non-essential federal personnel would likely be furloughed, including those at the Department of Education (ED), Department of Labor (DOL), and other federal agencies that work closely with community colleges. Administration of federal financial aid, including Pell Grants and student loans, will likely continue as usual. However, community colleges could expect disruption to institutional grant administration and a decrease in technical assistance and support from federal agency officials due to staffing constraints. AACC is carefully monitoring the appropriations process.
The Department of Labor (DOL) is set to release its new proposed rule on overtime thresholds for “white-collar” exemptions to parts of the Fair Labor Standards Act. Under the FLSA, employers are required to pay their employees a minimum hourly wage for 40 hours a week and an overtime rate equal to 1.5 times the hourly wage for each additional hour. However, executive, administrative, and professional (EAP) employees are exempt from this requirement. EAP employees are defined, in part, by their salary, with the current threshold at $35,568. The new proposed rule will raise that threshold to $55,068 – a significant increase that will dramatically impact community college budgets and operations. AACC will continue to be active on this critical throughout the 60-day comment period.
AACC’s Alexis Gravely highlighted the history of the overtime exemption rules and their potential influence on community colleges when DOL announced its intent to update the rules in February.
The Department of Education (ED) continues to advance its ambitious regulatory agenda. This week, ED announced that they will be accepting nominations for negotiators to sit on the Student Loan Relief committee – the negotiated rulemaking table tasked with considering President Biden’s revamped student debt cancellation plan.
As a refresher, the Supreme Court held that the President did not have the authority under the HEROES Act to cancel up to $20,000 in federally-held student debt per borrower. Following this defeat, the Biden administration announced it would seek an alternative route to implement the cancellation plan through the Higher Education Act (HEA). Unlike the HEROES Act, the HEA requires ED to go through a negotiated rulemaking process for the cancellation plan, including public hearings, a rulemaking panel and public comments.
The Department is currently seeking negotiators to represent students and student borrowers, institutions of higher education, state officials and attorneys general, civil rights and legal assistance organizations, U.S. service members or military veterans, and a representative from the Federal Family Education Loan (FFEL) program. Nominations are due by September 14, 2023, with the panels convening three times throughout October, November, and December.
This is just one of the Biden administration’s many higher education regulatory priorities. ED is also set to convene a negotiated rulemaking on institutional quality and accountability issues, to include accreditation, state authorization, third-party servicers, and return of Title IV funds. AACC’s David Baime presented comments on these topics during the virtual public hearing – the first step in the negotiated rulemaking – back in April. ED has not yet taken additional steps to establish a rulemaking committee for these issues but may do so later this fall.
Applications are open for key community college funding opportunities:
- Postsecondary Student Success Grants – Due September 25
- Advanced Technological Education (ATE) – Due October 5
- Perkins Innovation and Modernization Grants – Due October 12
- Strengthening Community College Training Grants – Due November 14
For more detailed information on these issues, visit the Community College Advocacy Updates page on our website.