Editor’s note: This weekly update from the government relations office at the American Association of Community Colleges (AACC) provides the latest on what’s happening in Washington and how AACC is advancing policies to support community colleges and students. Send questions, feedback and more to: kgimborys@aacc.nche.edu.
- Department of Education begins SAVE Plan enrollment
- Government Funding Watch: Biden Administration requests additional funding for FSA in a CR
- Funding opportunities
Department of Education begins SAVE Plan enrollment
On Tuesday, the Biden Administration announced that more than 4 million student borrowers had enrolled in the new Saving on a Valuable Education (SAVE) income-driven repayment (IDR) plan. The Administration has launched an aggressive communications campaign encouraging borrowers to enroll and what they refer to as “the most affordable IDR plan ever.” While many of those borrowers are transitioning from another IDR plan, ED is also highlighting that more than 1.6 million borrowers are newly-applying to participate in IDR ahead of repayment resuming in October.
As a refresher, the SAVE Plan:
- Lowers the monthly payment amounts for undergraduate borrowers from 10% to 5% of discretionary income.
- Raises the income-protection allowance so that no borrower earning under 225% of the federal poverty level will owe a monthly payment (up from 150%).
- For borrowers with original balances of $12,000 or less, lowers the timeline to forgiveness from 20 years of payments to 10 years.
- Ensures that borrowers’ loan balances will not grow due to unpaid monthly interest.
As ED continues to publicize the new SAVE plan, Congressional Republicans are challenging it. Sen. Bill Cassidy (R-Louisiana), ranking member of the Senate HELP Committee, was joined by 16 Republican cosponsors in introducing a Congressional Review Act (CRA) resolution to overturn the new IDR plan. A companion resolution was introduced in the House by Rep. Lisa McClain (R-Michigan) and Chair of the House Committee on Education and the Workforce, Rep. Virginia Foxx (R-North Carolina).
It is extremely unlikely that the resolution will advance in the Senate. However, the CRA challenge underscores Congressional Republicans’ continued energy around loan issues and their opposition to President Biden’s policies in this area.
Government Funding Watch: Biden Administration requests additional funding for FSA in a CR
With government funding set to expire on September 30, Congressional lawmakers will have to pass a Continuing Resolution (CR) to continue funding the government while they craft a politically viable, bipartisan appropriations package for Fiscal Year 2024 (FY 24).
As this column covered last week, ultimately a CR will likely extend FY 23 funding levels for an agreed-upon period of time (likely to be the end of the calendar year), but it can also include changes to individual program levels. If Congress cannot agree on the terms of a CR before the deadline, a government shutdown will start October 1.
In preparation for a CR, the Biden Administration sent Congress a set of budget “anomalies” – a request for additional funding above FY 23 levels for specific offices and programs to continue operations until a FY 24 appropriations package is enacted. This list includes an additional $2.3 billion for the Office of Federal Student Aid (FSA). FSA is already under an enormous resource strain. The agency has been tasked with the ongoing administration of Title IV aid, implementing the new FAFSA and Student Aid Index, facilitating return to repayment for millions of borrowers, and implementing the new IDR plan outlined above.
The agency was flat-funded in the FY 23 appropriations package—the Administration’s request for an increase was rejected by Congressional Republicans–and has become increasingly politicized after President Biden announced his plan to implement broad-based student debt cancellation. The outlook for coming to a bipartisan CR agreement is already challenging, with members of the far-right House Freedom Caucus signaling that they will not agree to any deal that does not include additional cuts for FY 24, while Congressional Democrats are not inclined to provide any votes for such an approach. It appears unlikely that FSA will receive additional funding in a CR, which could result in additional wait times for borrowers and decreased technical assistance.
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.