Updates From the Hill

Nelnet Campus Commerce partnered with the National Association of College and University Business Officers (NACUBO) to bring you a webinar focused on timely legislative updates from our nation’s capital that affect higher education. This webinar was led by Liz Clark, Vice President for Policy and Research for NACUBO, an expert in all things policy.

This webinar examined how the current political climate is impacting higher education, as well as, what regulatory changes might affect the business office, along with a discussion on what’s happening in the Department of Education and other agencies.

For the fiscal year 2024, key finalizations include setting the maximum Pell Grant at $7,395 for the academic year 2024-2025, although there was a preference for this figure to be higher. Both the Federal Work Study and Federal Supplemental Educational Opportunity Grant (FSEOG) programs have been level-funded, maintaining their current financial allocations.

Looking ahead to the fiscal year 2025, which needs to be established before October 1, 2024, President Biden has proposed several changes:

• Eliminate origination fees on federal student loans.
• Increase the maximum Pell Grant to $8,145.
• Expand free community college through a state-federal partnership.
• Provide two years of subsidized tuition for low-income students at HBCUs, TCCUs, or MSIs.
• Allocate $12 billion to fund strategies aimed at lowering educational costs and expanding access to dual enrollment programs.

The tax landscape in the United States is set for a significant shift as the lower individual tax rates introduced by the Tax Cuts and Jobs Act (TCJA) of 2017 are scheduled to expire on December 31, 2025. This looming deadline is steering tax reform to the forefront of legislative discussions. With the control of Congress hanging in the balance this November, the outcome of the elections will crucially determine who drafts the next major piece of tax legislation. This situation marks a critical juncture for tax policy, potentially impacting millions of taxpayers across the nation.

The rollout of the Free Application for Federal Student Aid (FAFSA) is currently impacting various offices, with no new updates or announcements to report. One note of concern was the number of completed FAFSA applications by high school students has dramatically decreased by 40%. This significant downturn has raised concern on multiple levels—from individual students and families to educational institutions facing potential declines in enrollment and the broader implications for the American economy, as a well-educated workforce is crucial for sustained economic growth and competitiveness.

On the bright side, from those that have been able to complete the FAFSA process, it appears to be smoother and more streamlined, which aligns with one of FAFSA’s primary objectives: to make it easier for students and families in accessing higher education.

The Department of Education’s (ED) process for negotiated rulemaking, often referred to as “Neg Reg,” is critical for developing education policies. This process involves multiple stages, including public hearings, requests for nominations and rounds of negotiations before the proposed rules can be published. If the committee approves a regulation, it progresses towards becoming law. However, if consensus is not reached, the Department of Education has the authority to craft its own version of the proposed rule.

Recently, some proposed regulations failed to gain committee approval, leading the ED to independently write rules on those topics. Once a proposed rule is formulated, it is opened for public commentary before a final rule is issued by November 1st, to take effect the following July 1st.

One of the topics that gained most interest involved meal plans. The Departments proposes that meal plan funds belong to the students, and they should have full authority over how they are spent and insists that any remaining dollars at the end of the academic year be refunded to the students.

However, this proposal faces significant challenges due to the unique nature of campus dining operations. Unlike typical food outlets in a strip mall, college and university dining services operate under complex contracts and business models specifically tailored to the campus environment, which do not easily align with the proposed flexible spending structure. This fundamental difference has led to substantial concern from educational institutions, resulting in a lack of consensus on how to manage unused flex meal dollars. Consequently, this impasse has allowed the Department of Education to step in and establish its own regulations regarding the issue.

In June 2023, the Supreme Court struck down a broader student debt relief plan proposed by the Biden Administration, prompting a shift to a more refined approach through the regulatory negotiation process, Neg Reg. Currently, the administration is crafting a proposed rule, details of which have not yet been published. Insights from President Biden’s discussions within the Department of Education suggest a strategic direction for the forthcoming student loan debt relief initiatives. The administration anticipates releasing this proposed rule soon, followed by a comment period of 30-60 days, aiming to finalize the regulation by November 1st for implementation by July 5th. Should this rule be enacted and Biden secures reelection, it is possible that the rule could face judicial challenges, potentially escalating to the Supreme Court for a definitive verdict.

NACUBO has developed a tool to assist institutions in promoting the value of higher education. This resource includes a PowerPoint slide deck filled with infographics, designed to effectively communicate the potential benefits and accessibility of higher education. To explore these resources and learn more about how they can be utilized in discussions about the value of higher education, you can access them on the More Is Possible With Higher Education webpage.

Webinar On-Demand: Watch the full version of the Updates From the Hill webinar to gain valuable insights and stay informed about important developments. NACUBO: Updates From the Hill 2024.