After weeks of tense negotiations, leaders in Congress have finally agreed to deal that will fund the government through September 2021 and to enact a compromised COVID relief package (totaling $900 billion). With this agreement on government funding,
Congress has set the federal spending levels for fiscal year 2021, which technically started on Oct. 1.
The new COVID relief package is a long-awaited development. Recall that Congress last passed a relief package in March: the CARES Act. Since then, lawmakers in both chambers have not been able
to reach an agreement on further relief funding. The House passed legislation back in May, and the Senate negotiated a package in July.
The omnibus spending bill and COVID relief package includes several sweeping higher education changes, including simplification of the Free Application for Federal Student Aid (FAFSA) and expanded Pell Grant eligibility – which you can learn about via
this companion piece written by Carrie Warick, NCAN’s director of policy and advocacy. This blog will cover funding
levels for relevant federal programs and COVID relief measures.
Below are the need-to-know funding provisions for NCAN members.
Pell Grants: The maximum Pell Grant award will increase by $150 to $6,495 for the 2021-22 award year.
Food Security: The relief package includes $13 billion in funding for increased SNAP and child nutrition benefits. Additionally, eligibility for supplemental nutrition assistance program (SNAP) benefits will be changed to accommodate students who
are enrolled at least half time in an institution of higher education; and are eligible to participate in a State or federally financed work-study program as determined by the institution of higher education; or in the current academic year, has an
expected family contribution of $0 as determined by the Higher Education Act.
Federal Student Loan Relief: The legislation did not further extend the relief on federal student loan repayment, interest accrual, and collections of defaulted loans – provisions created in the CARES Act and extended through executive order –
from its current expiration date of Jan. 31, 2021.
Education Funding:
Overall, the COVID relief package includes $82 billion for education funding – provided in a way similar to the CARES Act.
Institutions of higher education will see $22.7 billion for the Higher Education Emergency Relief Fund, which provides grants to institutions to help defray expenses related to COVID-19,
provide additional financial aid to students, and provide additional services to students for authorized activities. Recall that this fund, established in the CARES Act, requires institutions to distribute 50% of money they receive to students in
the form of emergency aid. This funding sets aside $1.7 billion for HBCUs, tribal colleges, and Minority-Serving Institutions, and $113.5 million for institutions with greatest unmet needs.
The package also allots $54 billion for the Elementary and Secondary School Emergency Relief Fund, which provides grants to states,
including funding allocated to school districts based on existing formulas, for a variety of acceptable uses.
There will be $4 billion for the Governors Emergency Education Relief Fund, which provides flexible funding to states to use for early childhood education, elementary and secondary
education, or higher education, based on the needs of the state, of which $2.5 billion is reserved for emergency assistance to non-public schools.
Direct Payments: The COVID relief package also includes “Economic Impact Payments” of $600 for individuals making up to $75,000 per year and $1,200 for couples making up to $150,000 per year, as well as a $600 payment for each child dependent.
However, adults claimed as dependents do not qualify for a payment. There is also a provision, which is retroactive to the CARES Act, to expand these direct payments to “mixed-status” households whose members include people with different citizenship
or immigration statuses, providing more families with access to this financial relief.
Paycheck Protection Program (PPP): The relief package also includes $325 billion in funding for businesses and nonprofits. From this allocation, $284 billion will go toward first and second forgivable PPP loans, dedicated set-asides for very small
businesses, and lending through community-based lenders like Community Development Financial Institutions and Minority Depository Institutions, and expanded PPP eligibility for 501(c)(6) nonprofits.
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