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: firstname.lastname@example.org.
On Tuesday, the Department of Education (ED) announced that they will update the income protection allowance for the purposes of calculating federal financial aid for the 2024-25 award cycle. As the Department worked to meet the December 31, 2023 deadline for launching the new Free Application for Federal Student Aid (FAFSA), they failed to appropriately adjust for inflation in determining the amount of income shielded in calculating a student’s Student Aid Index (SAI; the measure replacing the Expected Family Contribution). The impact on students would be material. According to the agency, the change will deliver an additional $1.8 billion to students in the form of increased eligibility for Pell Grants, campus-based aid, and student loan subsidies.
While the Department has announced that they will adjust SAIs to reflect the inflation adjustment, they have not yet announced a timeline for doing so. In addition to the FAFSA form being delayed for students and families, ED had already communicated that colleges should expect at least a month-long delay in the processing of Institutional Student Information Records (ISIRs). FSA could now either send out ISIRs on their original timeline and issue corrections once the formula is corrected – likely causing processing delays at the campus-level and introducing confusion for students and families – or fix the error before sending ISIRs to colleges, creating an even longer delay before campuses can package award letters.
Congress has passed a Continuing Resolution (CR) to avoid a partial government shutdown. Due to the “laddered” structure of the CR, funding for four of the 12 appropriations bills has been extended to March 1. The remaining eight bills, including the bill funding the Departments of Education and Labor, will expire on March 8. This will keep the government open and give appropriators more time to negotiate funding levels for fiscal year 2024 (FY 24).
As a reminder, if Congress cannot pass full-year FY 24 funding bills by April 30, there will be a 1 percent cut below FY 23 levels for defense and nondefense discretionary spending, per the terms of the debt ceiling agreement passed last June.