This week, the Biden-Harris Administration released a proposed budget for Fiscal Year (FY) 2025, which suggests several new programs to lower the cost of higher education and reduce student basic needs insecurity, while also calling for expanded funding for a range of programs to help students afford the cost of attending college.
Building on last year's budget, the Administration proposes a suite of investments that acknowledge rising basic needs insecurity among students. The budget comes at an unusual time, with Congress still working to finalize the current year (FY 2024) appropriations process to fund all federal agencies and programs through September 30th of this year before it can turn to the President’s proposals (normally, this process is complete by the time the budget is released).
Students and families continue to weather the rising cost of higher education, including tuition and fees, and higher costs of everyday expenses like food, housing, child care, transportation, and technology. Nationally representative federal data released just last year reveal that 4.3 million students in higher education, including one in five undergraduates, experience food insecurity. Undergraduate students experience food insecurity and hunger at twice the rate of all U.S. households.
Despite consistent and widespread basic needs insecurity, policymakers allowed many essential pandemic relief and economic security measures to expire over the past year, including expanded SNAP eligibility for students, expanded SNAP benefits for families, and emergency aid for students. Further, policymakers have failed to invest in comprehensive and sufficient supports to address the growing mental health crisis on- and off-campus, which is deeply interconnected with students’ ability to afford necessities and maintain basic financial security.
The FY 2025 budget includes a wide range of investments that, if adopted by Congress, would lower costs for students and help them address both tuition- and non-tuition costs. We strongly support the President’s longstanding proposal for a federal-state partnership to enact tuition-free community college, as well as to cover two years of tuition for low- and middle-income students at four-year Historically Black College and Universities (HBCUs), Tribally Controlled College and Universities (TCCUs), and Minority-Serving Institutions (MSIs). Free community college and tuition-free pathways at institutions that enroll and serve our nation’s most systemically marginalized students would help restore the promise of public education and federal student aid programs. It would also allow students to leverage existing grant aid and other resources for living expenses and other non-tuition costs.
We are encouraged by the Administration’s proposed increases to investing in basic needs through a new $25 million Comprehensive Postsecondary Student Supports Program, which would build upon the current Basic Needs for Postsecondary Students Grant (or “Basic Needs Grant”) that is currently funded at $10 million per year. This new program would support efforts to address basic needs, including mental health and wellness. While increasing funding is laudable, and basic needs and mental health are deeply interconnected, we are concerned about trying to fund multiple critical priorities through a single grant program, especially given the unacceptably high cost of providing mental health services. This approach could reduce the amount available for more comprehensive approaches to basic needs security. Instead, we encourage Congress to continue to expand the current Basic Needs Grant to no less than $40 million per year and to create a separate fund for addressing the mental health needs in higher education. Consolidating K-12 and higher education mental health programs could also be a promising strategy.
The budget would raise the maximum Pell Grant to $8,145, a $750 increase over the current maximum award ($100 of which would come from discretionary funding). While the Pell increase would provide short-term relief to eligible students, the maximum grant would still cover only 28% of the annual cost of attending a public four-year college ($28,840) and only 41% of the annual cost of attending a community college ($19,860). This would be a lower percentage of total costs than the Administration proposed to cover in FY 2024. The budget also positively proposes to add $2.1 billion in additional discretionary funding to the Pell Grant’s base funding to help close a potential shortfall in the program.
Transforming our higher education system into one that is truly accessible and affordable for students cannot be done through grant aid alone, and will require the federal government to work with states to reinvest in public higher education and reform the archaic, complex, and inhumane rules in our safety net and public benefit programs that too often render students ineligible or unable to access benefits.
Other proposals that could address student basic needs include:
- $12 billion for a new Reducing the Costs of College Fund, which seeks to fund and replicate evidence-based strategies to reduce college costs and improve student success, including a set-aside of 20% for promising programs like CUNY ASAP that include financial support for textbooks and transportation, and emergency aid.
- $100 million for Postsecondary Student Success Grants (PSSG), a proposed increase of $55 million over FY 2023. Crucially, the Administration proposes that grant activities for the expanded PSSG grants could include “providing assistance to students in applying for and accessing emergency financial aid grants for unexpected expenses or meeting basic needs, direct support services, means-tested Federal benefit programs.”
- A small $5 million increase to the Child Care Access Means Parents in School (CCAMPIS) program, for a total of $80 million. This program supports affordable child care for parenting students. The Hope Center has repeatedly called on Congress to expand CCAMPIS funding and increase grant awards to institutions.
- $15 million for new Statewide Reform Grants, a program to help states to build capacity and enact reforms to address student access, retention, and completion. Among the activities the budget explicitly proposes the grants would cover include to “…streamline eligible college student access to basic needs supports such as Supplemental Nutrition Assistance Program (SNAP) benefits; Temporary Assistance for Needy Families (TANF); Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); Medicaid; and services for veterans.”
- Flat funding of $1.3 billion for the Supplemental Education Opportunity Grant (SEOG), the same as FY 2023. During the pandemic, Congress created flexibilities within SEOG to allow the funds to be used as emergency aid (though those flexibilities expired in July 2023), and The Hope Center has called on Congress to revive and make that flexibility permanent.
- Flat funding of $8.5 million for the Garrett Lee Smith (GLS) Suicide Prevention Campus Grant program, the same as FY2023. GLS campus grants remain the only federal grant program for colleges specifically targeted at the growing mental health crisis on campus.
- An increase of $625 million for the Office of Federal Student Aid (FSA), for a total of $2.7 billion requested, which would allow for smooth implementation of existing debt cancellation programs as well as continuing to implement reforms to the Free Application for Federal Student Aid (FAFSA), and “enable FSA to implement the remaining provisions of the FAFSA Simplification Act including coordination with other federal agencies that handle means-tested benefit programs and changes to the FAFSA experience based on continuous consumer testing.”
- Ending costly origination fees on student loans, which can drive up the price of debt for vulnerable borrowers, and making permanent a change that student borrowers are not taxed on loan cancellation through income-driven repayment.
- Restoring the expanded monthly Child Tax Credit (CTC), a policy temporarily enacted by the American Rescue Plan Act (ARPA) which reduced child poverty and led to a dramatic reduction in poverty rates, a reduction in food insecurity, and an uptick in families seeking professional skills for themselves or their children.
Elsewhere in the budget, the Administration acknowledged the need for Congress to reform the Supplemental Nutrition Assistance Program (SNAP) to address student food security by reducing barriers that “… make it difficult for underserved groups to succeed, including low-income college students” when it reauthorizes the Farm Bill.
Unfortunately, the budget does not propose to exclude Pell Grants, emergency aid, and other grants and scholarships from taxation, as proposed in part by the Tax-Free Pell Grant Act. Nor does the budget call for a needed expansion in emergency grant aid to students, which is still sorely needed even as the pandemic recedes. We also urge the Administration to maintain the current frequency of the National Postsecondary Student Aid Study, which includes valuable questions on basic needs, unlike the reduction they propose.
Despite the late action on FY 2024 appropriations and the truncated calendar of an election year, Congress has an obligation to act to address the rising costs facing students and families. The Administration’s budget offers a blueprint for expanding critical programs and supports that could reduce the cost of attendance for students and prevent them from having to choose between taking care of themselves and their families or taking on crippling debt by merely following their chosen educational and career pathway.
We look forward to working with Congress and the Administration to build that reality.