News: Federal Policy & Advocacy

GOP Releases COVID 4 Proposal; Long Negotiations Ahead

Tuesday, July 28, 2020  
Posted by: Carrie Warick, Director of Policy and Advocacy
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Yesterday, Senate Republicans released a package of bills – collectively called the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act – that comprises their opening position in negotiations for a fourth COVID relief package.

On the higher education front, the proposal includes $29 billion for colleges and students, a change to student loans, and instructions to the Department of Education on professional judgment as well as adding a question to the FAFSA asking students if they or their families have experienced significant income change due to COVID.

Outside of higher education, the bill also includes $70 billion for elementary and secondary education and a $5 billion governor’s fund. Additionally, a second round of $1,200 checks would be distributed to adults and $500 to dependents. Unlike the first round of checks this spring, adult dependents would now be eligible for the $500 dependent check.

Unfortunately, the full GOP proposal does not include Sen. Lamar Alexander’s (R-TN) FAFSA simplification proposal from the FAFSA Simplification Act of 2019, which NCAN supports. Sen. Alexander unsuccessfully pushed for Senate leadership to include it in the final package.

However, there are several FAFSA-related provisions that are good news for students:

  1. Inclusion of professional judgment allowing for $0 earnings for those students (or their spouse/parent) receiving unemployment insurance.
  2. Funds received as part of COVID relief will not count as either taxed or untaxed income for FAFSA purposes.
  3. A check box will be added to FAFSA for students to mark if their families experienced significant change in income due to COVID.

NCAN will continue to promote the inclusion of these provisions in the final bill.

What Comes Next

Congress is now in a race against the clock. They need to reach a compromise with each other and President Trump before the expanded unemployment benefits passed earlier this year expire on Friday. Two top areas of disagreement include whether to extend or reduce the unemployment benefits, and whether to tie elementary and secondary education funding to schools reopening in person.

There are other areas of disagreement within higher education. The funding levels across the various relief proposals vary considerably.

Senate Democrats proposed $132 billion to support higher education, but the Senate Republican proposal is more in line with the $30 billion proposed for higher education in the House HEROES Act. The House proposal changed how funding is allocated to institutions based on headcount rather than full-time enrollment equivalent, which will provide more funding to institutions with high levels of part-time enrollment, such as community colleges. Additionally, the Senate proposal does not require institutions to use any funds toward emergency payments to students, though they have the option of doing so.

The proposed student loan changes are also going to be a difficult topic for Republicans and Democrats to come agreement on. The House Democrats proposed extending the payment and interest freeze through September 2021. The Senate Republicans have included a proposal from Sen. Alexander that would allow the freeze to expire on its current deadline of Sept. 30, 2020, replacing it with two repayment plan options: one based on income and the other a standard repayment plan. The loan proposal also would make improvements to Public Service Loan Forgiveness by making any repayment plan eligible and allowing $0 payments to count toward the 120 payments.

Generally, most advocates support student loan repayment plan simplification, and there are several versions of the one income-based and one standard plan proposed as part of the reauthorization of the Higher Education Act.

Sen. Alexander’s plan would cap loan payments at 10% of income after 150% of the poverty level for those in the income-driven plan and guarantee that those with no income would have no payment. There would also be a standard plan option. However, implementing this plan as part of COVID relief will require borrowers to take action quickly if they do not want their payments to revert to their previous plan. Notably, the interest would continue to accrue on the loans.

NCAN will continue to monitor the negotiations and promote our top priorities for inclusion. Unfortunately, none of the packages currently include the top NCAN ask to double the maximum Pell Grant to directly support students in their higher education endeavors.

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(Photo by Thomas de LUZE on Unsplash)