The reconciliation bill will likely only receive Republican votes, but the legislation’s huge impact means that all members, including Democrats, should hear from their constituents.
AACC is asking you to focus on two key issues.
Reject Pell Grant Program Cuts
The Pell Grant program is facing major financing challenges, resulting from the expansions made in the FAFSA Simplification Act. AACC asked the committee to provide funds to address the Pell program’s “shortfall” in the reconciliation bill, and $10.5 billion has been provided. The committee should be commended for that action. The committee should also be commended for including new Pell eligibility for short-term, workforce programs – Workforce Pell – in the reconciliation legislation.
However, the committee bill also makes major cuts to student eligibility if retained would create extraordinary financing challenges for community college students and unquestionably limit student access and success. The bill would:
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Define a full-time student as taking at least 15 credits. Under current law, students are considered full-time if they take 12 or more credits. Community college students who take 12 credits would now qualify for 80% of the Pell Grant maximum, currently set at $7,395, rather than the full maximum award.
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Eliminate eligibility for “less than half-time students,” which combined with the change above would mean that only students taking 7.5 credits or more would qualify for a Pell Grant. Currently, less than half-time students are Pell eligible, meaning that thousands of community college students, especially those who are working and parenting, will lose access to this critical form of aid.
No one wants to hamper the ability of low-income community college students to finance their education. However, Members of Congress will expect you to explain concretely why this proposed change is so harmful.
Representatives should oppose changes to students’ Pell Grants. In asking for their opposition, you should explain to them why this change is so harmful by documenting:
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The amount of grant support that would be lost by eliminating Pell Grant eligibility for students on your campus taking on a credit load of less than 7.5 semester hours.
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The amount of aid that would be lost to your students by redefining “full-time” as 15 semester hours.
Risk-Sharing
As expected, the House bill contains risk-sharing provisions, coupled with new PROMISE Grants. Both risk-sharing payments and PROMISE grant amounts are determined by complex, multifactor formulas, but in general institutions will be required to make “risk-sharing” payments to the federal government driven by the earnings of program completers relative to the cost of the program, how much they borrowed, and how much of their loans are ultimately repaid. Payments also must be made for non-completers.
The low cost of community college programs, and their low borrowing rates and amounts, means their assessment should be lower than those for other sectors. However, community colleges across the country will still be required to make payments. In truth, the exact amounts are quite unclear, given changes in the student borrowing landscape.
The new PROMISE Grants will be granted to institutions that graduate a high percentage of Pell Grant recipients at low cost within 100% of the “normal time” to completion and meet other conditions. AACC has long supported student success efforts of this nature and would strongly support PROMISE Grants if unaccompanied by risk-sharing.
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Institutions cannot control who repays student loans.
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Institutions simply do not have extra funds to pay a federal assessment that will fluctuate from year to year.
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Risk-sharing is designed to incentivize institutions to keep prices low and focus on outcomes; this is the ongoing orientation of community colleges.
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Community colleges strive to be accountable through public funding and local and state oversight, along with close business partnerships.
Contacting Congress
Given the stakes involved, all House members should be contacted. If you do not have an ongoing relationship with your member, you can use AACC’s Take Action page to get information about contacting them.
Again, the community college message is:
Don’t make cuts to Pell Grant student eligibility as outlined above.
Don’t impose risk-sharing as outlined above.
Senate Action
Whatever the outcome in the House, in the coming weeks the Senate will craft its own version of the reconciliation bill. AACC will soon contact campuses to help them play a role in structuring the bill. While budget reconciliation may ultimately mean some cuts, they should be structured to not limit access and success for our most vulnerable students.
Working with AACC
These issues are complex and there are many aspects of this legislation not referred to here. Please do not hesitate to contact AACC’s government relations team on these issues:
David Baime, Senior VP for Government Relations
Jim Hermes, Associate VP for Government Relations
Kathryn Gimborys, Government Relations Manager
Also, please copy AACC government relations staff with copies of any correspondence and any feedback that you receive.