News: Federal Policy & Advocacy

House Democrats’ Propose $100 Billion in Additional Education Funding in HEROES Act

Thursday, May 14, 2020  
Posted by: Carrie Warick, Director of Policy and Advocacy
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Earlier this week, House Democrats introduced a 1,815-page bill called the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act), H.R. 6800 (116). The bill provides $3 trillion in support across a wide variety of areas, including state and local government, health care, housing and nutrition assistance, and education.

A third of the proposed funding, or approximately $1 trillion, is targeted to states and local governments facing severe budget cuts.

The HEROES Act also calls for a second set of $1,200 relief payments to Americans. In education, there is $100 billion of additional funding and a call for $10,000 in loan forgiveness for “economically distressed” federal and private student loan borrowers.

While the bill includes several NCAN priorities for responding to the coronavirus crisis’ impact on higher education, it is unlikely that this bill will become law. The House will likely vote on Friday; the Senate has not expressed interest in another round of coronavirus crisis support at this time, but rather continuing to review the impact of the CARES Act.

The HEROES Act is the Democrats’ opening proposal, but it is more likely that any future rounds of coronavirus support will come in the form of a narrower, negotiated bill.

These are the several areas of support directly related to NCAN priorities contained in the HEROES Act:

Higher Education Funding

This bill includes $90 billion in funding in the State Fiscal Stabilization Fund through the U.S. Department of Education. Governors could use these dollars to support K-12 education, public institutions of higher education, and early childhood education. Thirty percent of those funds would be for higher education. Additionally, the bill provides $1.7 billion for minority-serving institutions; $7 billion for private, nonprofit institutions; and $1.4 billion for public or private nonprofit institutions.

Colleges could use this funding for lost revenue, student reimbursements, or to make payroll. These funds could also be used for additional emergency financial aid grants like those established under the CARES Act.

Food and Nutrition Support

The HEROES Act provides $10 billion for the Supplemental Nutrition Assistance Program and increases the benefits by 15%. Unfortunately, it does not address the requirement that students must be enrolled part-time while working at least 20 hours a week to qualify, which may be difficult for students to meet during this time of displacement and high unemployment. Additionally, $3 billion are proposed for child nutrition programs.

Stimulus Payments

In addition to a second set of $1,200 refundable tax credits, the amount added for a dependent would be increased from $500 in the CARES Act to $1,200 in the HEROES Act. Additionally, families would be able to claim up to three dependents regardless of age, which would allow college students who are claimed on their parents’ taxes to receive the tax rebate via the check to their parents. The credit would phase out using the same formula (based on income levels) as the CARES Act.

DACA and Undocumented Students

The HEROES Act excludes the higher education emergency grants as part of federal benefits, meaning DACA and undocumented students would be able to receive the funding.

Public Service Loan Forgiveness (PSLF)

The HEROES Act would allow borrowers to consolidate older loans that are otherwise ineligible for PSLF into a new federal consolidation loan without losing credit toward PSLF. Unfortunately, the bill does not address the concern that individuals in the PSLF program will lose credit toward the program for months in which they are unemployed due to the pandemic.

FAFSA and Professional Judgment

If a person has applied for or is receiving unemployment benefits, they would be considered as a dislocated worker for the purposes of the FAFSA. Additionally, the bill would codify guidance from the U.S. Department of Education from 2009 overseeing professional judgment for financial aid packages at colleges.

Corporation for National and Community Service

The HEROES Act would allow the Corporation for National and Community Service Provisions to permit AmeriCorps to waive the match requirement for existing grantees. Additionally, AmeriCorps volunteers could receive a cash stipend instead of the education award if their service is interrupted.

Student Loans

This bill proposes $10,000 in student loan forgiveness for borrowers regardless of whether the student loans are federal or private. In an update to the original proposal, borrowers qualifying for relief would need to be “economically distressed” on March 12 in order to qualify. The funding for the private loan forgiveness is separate from the funds discussed above for higher education. Additionally, it would extend the current student loan payment suspension through September 2021.

Broadband

The HEROES Act would provide $1.5 billion in funding to address the homework gap by providing Wi-Fi hotspots and connected devices and $4 billion for emergency home connectivity needs.

Pell Grant and Supplementary Educational Opportunity Grant

The HEROES Act does not provide additional funding to the Pell Grant or SEOG programs.

CARES Act Oversight

The HEROES Act also clarifies several portions of the CARES Act related to higher education programs. The bill would:

  • Exclude emergency grant aid to higher education students from income or assets in the computation of Expected Family Contribution.
  • Prohibit the U.S. secretary of education from defining the population of postsecondary students who may receive emergency student grant aid, retroactively applying this to the CARES Act.
  • Eliminate the 1% set-aside for the secretary under the Education Stabilization Fund created by the CARES Act.

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(Photo by Cole Keister on Unsplash)