US to give colleges $20 billion in new Covid relief bill

Congressional leaders also approve new money for student grants and minority institutions

December 21, 2020
US Congress

US congressional leaders have reached agreement on a new $900 billion (£681 billion) nationwide coronavirus relief bill that includes $20 billion in aid for higher education.

Lawmakers also agreed on an annual funding bill for government operations that includes provisions helping students with grants and loans, and offers $1.3 billion in loan forgiveness to historically black institutions.

Both measures are expected to win final passage in the House of Representatives and Senate, after months of talks produced agreements on terms among the top Republican and Democratic leaders of the two chambers.

As with the $14 billion in higher education aid that Congress included in its previous Covid aid bill in March, the $20 billion will be shared by institutions and students, and falls far short of what the sector has said it needs.

In the weeks leading up to the agreement, US higher education leadership groups said that their institutions were short at least $120 billion in lost revenues and increased costs associated with the pandemic.

“The scope of the financial duress of students and institutions has only grown” since the March relief bill, more than 100 higher education associations said in a letter to congressional leaders earlier this month.

Congressional leaders in charge of the key education-related committees largely looked past the Covid relief measure and issued celebratory statements emphasising gains for colleges in the main government funding bill.

That measure will ease income requirements to make an additional 555,000 students eligible for the Pell Grant, the main federal low-income subsidy, and make another 1.7 million students eligible for the maximum Pell Grant value. About a third of the nation’s 20 million college students currently receive a Pell Grant.

The funding bill also will repeal the ban on Pell eligibility for students who are incarcerated or have committed drug-related offenses; restore Pell eligibility to students who had past loan amounts discharged because of institutional fraud; and simplify the federal form that students use to apply for aid.

The bill also will discharge $1.3 billion in federal loan money that previously had been given to historically black colleges and universities to help them finance large construction projects.

The Covid relief bill provides $17 billion for institutions, with the understanding that they spend at least half of that on student financial aid. That bill also offers another $2 billion for minority-serving institutions, and $1 billion for institutions with significant needs tied to the pandemic. US higher education lobbyists have held out hope for a larger Covid relief measure once the Biden administration takes office.

The Trump administration earlier agreed to extend until February – after it leaves office – a waiver excusing most student loan borrowers from making payments. The Biden administration has expressed willingness to consider forgiving large portions of such loans.

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