House appropriators maintain support for key programs, Pell Grant shortfall still looms
The House Appropriations Committee on Thursday released the fiscal year 2027 (FY 27) funding bill for the Labor, Health and Human Services, Education, and Related Agencies Subcommittee (Labor-HHS-ED). The Labor-HHS-ED subcommittee approved the bill on June 5.
The bill ultimately seeks to cut discretionary funding by 27% for the Labor Department by and by 10% for the Education Department ED). The measure would provide a $10 million increase to the Strengthening Community Colleges Training Grant Program (SCCTG), a top appropriations priority for AACC. It also would deliver small increases to TRIO and increase the Pell Grant maximum by $50. The bill also proposes eliminating funding for Adult Basic Education, mirroring a request from the Trump administration’s fiscal year 2027 (FY 27) federal budget request.
Top of mind for appropriators, authorizers and key stakeholders is how to address the $17 billion shortfall in the Pell Grant reserve fund. While the Trump administration’s budget pitch calls for allocating $10.5 billion to the program, it seeks to pay for this increase through widespread cuts to ED discretionary programs. House appropriators appear to have put forth a different idea. They want to fill the shortfall by eliminating the direct subsidized loan program for undergraduate students. While there is strong bipartisan, bicameral support for ensuring the stability of the Pell Grant program, this proposal is likely to face challenges in the Senate, where appropriations bills require bipartisan support.
AACC will have more detailed funding levels to share when the bill is considered by the full House Appropriations Committee next week.
ED rolls out real-time FAFSA results for students and families
ED’s Office of Federal Student Aid (FSA) announced this week that the Free Application for Federal Student Aid (FAFSA) will now be processed in real time. First announced at the FSA training conference in March, this capability will allow students and families to receive their FAFSA submission summary for both initial applications and corrections immediately after submission. In addition to delivering information on the applicant’s Student Aid Index (SAI) and Pell Grant eligibility in real time, the new system will allow students and contributors to see immediately whether their FAFSA needs any corrections. This will allow students to begin corrections in the same submission session, rather than waiting to hear from FSA, and will hopefully significantly decrease “application melt” from students who need a FAFSA correction. Students can submit up to four corrections in a single session. Students who need to submit a fifth correction can do so after a 24-hour hold period.
ED also announced that institutions, state agencies and partners can now view processed Institutional Student Information Records (ISIRs) immediately in the FAFSA Partner Portal. This will allow community college financial aid officers to be more responsive to student questions, walk through potential aid options and assist students with corrections, without requiring additional meetings or waiting periods.
House to consider bill on ‘ghost students’
The House is expected to consider an amended version of the No Aid for Ghost Students Act. The bill, originally introduced in March as two distinct pieces of legislation – the No Aid for Ghost Students Act and the Student Aid Fraud Oversight and Accountability Act – was approved by the House Rules Committee and now heads to the House floor. While the bill was originally on the schedule to be considered the week of June 1, the House adjourned before getting to the measure.
As covered in Community College Daily, the initial No Aid for Ghost Students Act requires ED to proactively identify financial aid applicants who exhibit patterns associated with fraud when a student submits a FAFSA, codifying the new agency identity verification policy that went into effect this spring. The bill also requires institutions to adhere to ED requirements relating to preventing Title IV fraud, which, again under existing policy, will consist of running V4/V5 identity verification before distributing any aid to a student whose FAFSA is initially rejected by ED for having a high likelihood of fraud. The second bill, the Student Aid Fraud Oversight and Accountability Act, would require ED to prioritize program reviews of institutions that have not complied with identity verification policies. The bill coming before the House combines these two pieces of legislation and makes some text changes throughout.
While the House Committee on Education and the Workforce approved both original bills with bipartisan support, it may receive opposition from many Congressional Democrats who would prefer for the statutory text to limit the agency’s authority in different areas.
DOL/ED grant reminders
- The FY 26 Strengthening Institutions Program competition is open until June 23.
- FY 26 grant competitions for the Basic Needs Grant Program, the Open Textbook Pilot Program, the Centers of Excellence for Veteran Student Success Program, and the Rural Postsecondary and Economic Development Grant Program are open until June 23.
- The FY 26 Postsecondary Student Success Grants competition is open until June 29.
Upcoming AACC events
- The next AACC federal update webinar will take place on June 10 at 2 pm ET. Please register to attend. If you haven’t already, please register for AACC’s annual Advocates in Action event in Washington, D.C., September 15-16. Space is limited.