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 releases updated timeline for FAFSA processing as frustrations continue to build
- Secretary Cardona defends FY 25 budget request
- WIOA reform passes the House of Representatives
- Biden Administration moves forward with student debt cancellation under the HEA
Department of Education releases updated timeline for FAFSA processing as frustrations continue to build
On Tuesday, the Department of Education (ED) issued an electronic announcement (EA) updating the timeline for the processing of Free Application for Federal Student Aid (FAFSA) data and transmission of Institutional Student Information Records (ISIRs) – the financial aid information colleges need to package financial aid offers – to colleges.
The new EA clarifies that students can expect to be able to make corrections to their forms, add missing signatures, and add additional recipients early next week. Colleges should receive new ISIRs from these students in 1-3 days after the correction is submitted. Over the past few weeks, colleges and universities have been reporting a higher than usual error rate – receiving ISIRs where a Student Aid Index (SAI; the new needs analysis measure) could not be generated. The EA confirms this, noting that at least 16 percent of FAFSA applications – or over one million students – will have to submit a correction to generate an SAI.
The new EA also presents a timeline for when inaccurate ISIRs impacted by system glitches will be reprocessed and delivered to schools. Around 30 percent of applications – or roughly two million students – were impacted by processing and data errors at ED and the IRS. As ED previously announced, each of these ISIRs will be processed and sent to schools in order to ensure that colleges are packaging aid offers with accurate SAIs. Around 10 percent of the FAFSAs were impacted by a vendor error that miscalculated need for dependent students with assets. These ISIRs will be corrected and sent to colleges mid-April. The remaining 20 percent – those impacted by tax data issues – will not be transmitted to colleges until May 1. The Department will be sending lists of student records to institutions and states to help them identify which received ISIRs have been impacted by a processing error.
The next day, the House Higher Education and Workforce Development Subcommittee convened a hearing entitled “FAFSA Fail: Examining the Impact on Students, Families, and Schools.” Witnesses included Justin Draeger, President and CEO of the National Association of Student Financial Aid Administrators; Kim Cook, CEO of the National College Attainment Network; Rachelle Feldman, Vice Provost for Enrollment at the University of North Carolina Chapel Hill; and Mark Kantrowitz, President of Cerebly, Inc. Witnesses and members alike were extremely critical of the Department of Education’s handling of the implementation, citing the negative impact of continued errors, concerns about the lack of transparency, and a loss of trust in the Department of Education to get the 2024-25 FAFSA across the finish line without additional delays.
Secretary Cardona defends FY 25 budget request
On Wednesday, Education Secretary Miguel Cardona appeared before the House Labor-HHS-Education Appropriations Subcommittee to testify on the Biden Administrations Fiscal Year 2025 (FY 25) budget request for the Department of Education (ED). As a reminder, the request includes many of President Biden’s longstanding priorities, including creating a national free community college program and substantially increasing the maximum Pell Grant award for students attending nonprofit institutions. The request also asks for maintained or slightly increased funding for other key community college priorities, including campus-based aid programs, Child Care Access Means Parents in Schools (CCAMPIS) programs, and the Title III-A Strengthening Institutions Program (SIP). AACC’s Jim Hermes has more information on the President’s budget request in the Community College Daily.
While some members asked the Secretary specific questions about proposed funding levels for Department of Education programs, many Subcommittee Republicans took the opportunity to question the Secretary about the Administration’s bungled implementation of the FAFSA Simplification Act and its relation to the President’s student debt relief agenda and forthcoming Title IX policies on gender identity and participation in school-sponsored sports.
Also on the appropriations front, House Republicans have elected Rep. Tom Cole (R-Oklahoma) to serve as the next chair of the Appropriations Committee, after his unanimous selection by the House Republican Steering Committee. Current chair, Rep. Kay Granger (R-Texas), is stepping down from the role early after announcing that she will be retiring at the end of this Congress. Rep. Cole previously served as both chair and ranking member of the Labor-HHS-Education Subcommittee, where he was a champion for the federal Pell Grant program.
WIOA reform passes the House of Representatives
On Tuesday, the House of Representatives approved the “A Stronger Workforce for America Act” (ASWAA), which reauthorizes the Workforce Innovation and Opportunity Act (WIOA). Endorsed by the American Association of Community Colleges (AACC), the ASWAA would authorize the Strengthening Community College Training Grants program, would streamline the Eligible Training Provider List (ETPL), and would place a greater emphasis on training for use of WIOA dollars. AACC’s Jim Hermes has more on the bill’s outlook in the Senate in the Community College Daily.
Biden Administration moves forward with student debt cancellation under the HEA
On Monday, The Department of Education (ED) announced that they are advancing a new student debt relief plan. The plan will extend waivers to five groups of borrowers, citing authority under the Higher Education Act (HEA).
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 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 rulemaking panel – called the Student Loan Relief Committee – convened four sessions in 2023 and 2024.
The new announcement clarifies ED’s intention to issue waivers to cancel student debt for certain groups of borrowers. The forthcoming proposed rule will:
- Cancel up to $20,000 of the amount that a borrower’s balance has grown due to unpaid interest, regardless of their income. For borrowers earning less than $120,000, all their accumulated interest will be subject to be waived.
- Automatically discharge debt for borrowers otherwise eligible for loan forgiveness under the new SAVE income-driven repayment plan, but who have not yet enrolled.
- Cancel remaining debt for undergraduate borrowers who entered repayment at least 20 years ago and graduate borrowers who entered repayment at least 25 years ago.
- Cancel debt for borrowers who enrolled in institutions or programs that later lost their Title IV eligibility.
- Assist borrowers who experience financial hardship, with details on this proposal to come.
Ultimately, the Department estimates that tens of millions of borrowers will receive relief through this proposal, in addition to the 4 million borrowers who have already seen their loans canceled through Biden Administration initiatives. The Department is likely to publish the proposed rule in the Federal Register sometime this month.