On December 21, 2020, Congress passed the 2021 omnibus spending bill which includes additional funding for COVID-19 relief and a second stimulus package. Sen. Lamar Alexander (R-TN) and Rep. Bobby Scott (D-VA), worked across the aisle with committee leaders Sen. Patty Murray (D-WA) and Rep. Virginia Foxx (R-NC) to include Free Application for Federal Student Aid (FAFSA) simplification and expanded Pell Grant eligibility in the omnibus package.
Building on last year’s FUTURE Act, the provisions in the bill continue to simplify the FAFSA process for students, making it easier for them to complete their application and access the federal financial aid for which they qualify. Currently, Florida students annually leave behind $100 million in financial aid that they would have been eligible to receive had they completed their FAFSA application. Nationally, that figure jumps to $2.5 billion in unclaimed financial aid each year.
The new FAFSA provision aligns with two of the National College Attainment Network’s (NCAN) goals for simplification. First, it significantly shortens the filing processes by decreasing the questions on the application from 108 to a maximum of 36. This is accomplished through the elimination of questions that fewer than 1% of applicants complete and the elimination of barrier questions (such as the questions to determine drug conviction). As a result of the elimination of barrier questions, the provision restores Pell eligibility to students who are incarcerated or have a drug conviction.
Second, it utilizes a new measure to predict a student’s Pell Grant eligibility to give the student a better picture of the need-based aid available to them at an earlier point in the application process. The measure essentially determines which FAFSA applicants are automatically eligible for the minimum or maximum Pell Grant award by determining their family’s adjusted gross income and comparing it to the federal poverty level for their corresponding family size. Counselors, advisors, and benefits administrators (such as SNAP or WIC administrators) will be able to tell students and their families if they will likely qualify for the minimum or maximum Pell award before the student files their FAFSA. For applicants who qualify for more than the minimum Pell Grant but do not automatically qualify for the maximum Pell Grant, a new Student Aid Index will determine the amount the student will most likely receive after filing.
These bipartisan changes aim to help students take inventory of the need-based aid available to them at an earlier stage in their post-high school planning process. The new measure to identify students who are guaranteed the minimum or maximum Pell Grant opens up the door for the creation of tools that help families understand how their family size and income level may affect their student’s Pell eligibility. It may also help adult learners determine their financial ability to enroll in a postsecondary program. Notably, students who are flagged as eligible for the guaranteed minimum award may receive more than the minimum Pell, but they will not know the exact amount until after they file.
Due to the time it takes for Federal Student Aid (FSA) to build each year’s FAFSA application, these changes will not take effect until July 1, 2023 (to be applied to the 2023-2024 academic year). The form available on October 1, 2022 will be the first to incorporate these changes. The provisions expanding eligibility to incarcerated students and students with drug convictions may, however, be implemented at an earlier time.
In addition to the changes that the higher education portion of the omnibus package makes to FAFSA simplification and Pell eligibility, the agreement includes other important changes to higher education and financial aid. The package raises the maximum Pell Grant award by $150, bringing the total maximum amount available to $6,495. Additionally, the bill makes changes to the lifetime eligibility limit of subsidized Stafford loans, removing restrictions allowing student to access loans if they require more than 150% of their program length to complete their degree. The bill also relieves a portion of the debt incurred by Historically Black Colleges and Universities (HBCUs) with loans from the Capital Financing Loan Program — a federal loan program to help expand the mission and reach of HBCUs. To combat the alarming rate of food insecurity amongst college students especially during the pandemic, the relief package changes supplemental nutrition assistance program (SNAP) eligibility to include students who are (1) enrolled at least half-time at a higher education institution, (2) are eligible to participate in a state or federally-financed work-study program, OR have an expected family contribution of $0 for their current academic year.
Finally, the bill includes an additional $22.7 billion for the Higher Education Emergency Relief Fund created by 2020’s CARES Act. Of this $22.7 billion, $1.7 billion will go to HBCUs, tribal colleges, and Minority-Serving institutions, and $113.5 million will go to institutions with the greatest unmet needs. The remainder will be distributed to higher education institutions in the form of grants with the caveat that at least 50% of the funds allotted to each institution must be set aside for direct emergency aid to students. Separate from the Higher Education Emergency Relief fund, an additional $4 billion will go to the Governor’s Emergency Relief Fund, also created by the CARES Act, for each states’ governor to use for education as needed. When more information is released, FCAN will provide important updates on how Florida institutions are spending their Higher Education Emergency Relief Fund dollars and how Governor DeSantis allocates the Governor’s Emergency Relief Fund for the state.