Updates From the Hill at CampusConnect 2024

At this year’s Campus Connect Virtual Conference, Nelnet Campus Commerce welcomed Ashley Jackson, Director of Government Affairs at the National Association of College and University Business Officers (NACUBO), to speak about what’s to come from our ever-changing political climate, the possible effects of this year’s election, and what this could all mean for higher ed institutions and businesses.

The 2024 election will be a huge factor for higher education in the coming year. Young voters will play a pivotal role in the election and which candidate comes out on top. However younger voter turnout is projecting to be lower than the 2020 election by about 8 percent.

Jackson said, “With many policies directly affecting this age group, such as student loan forgiveness and affordable education, their participation could be really decisive here.”

While the presidential election is on the big stage, voters also need to consider Congress. Currently, the house is made up of 211 democrats and 220 republicans with four vacant seats. The Senate is also almost an even split. The outcome of the November elections will be a huge part of determining which party could hold the majority of the house, leading to potential changes to higher education as a whole or a “lame duck session.”

A lame duck session, typically occurring between November and January, implies diminished political influence and could lead to more stagnant or slower moving legislature. However, it could also be used to pass controversial legislature or handle more urgent issues like budget approvals. In this time, we could see big changes to higher education legislature, including things like funding, financial aid, or even student loan forgiveness programs.

As several provisions from the Tax Cuts and Jobs Act (TCJA) are set to expire, big changes in tax policy could be coming, depending on Congress. Jackson broke down what we could expect depending on the makeup of the 119th Congress post-election:

• With a Democratic President and Republican house and Senate, it is likely the 2017 TCJA tax credits could be renewed, leading to those 2017 Tax Cuts being made permanent. This could mean lowering corporate and income taxes and raising tariffs on imported goods. With this, we can see lower corporate and income taxes, leading to more opportunities for growth and investment while also seeing some supply chain disruptions with those higher tariffs.
• With a Democratic president and house but a Republican Senate, continued TCJA cuts are expected for people earning under $400,000. We can also expect an increase in the income tax rate to about 39.6 percent. The US could participate in the global effort to enforce a minimum 15 percent corporate tax and see more opportunities for profit and investment. For American citizens, income taxes may be lower, but so will the GDP, leading to nearly 700,000 jobs being lost.

So, how does this affect higher education? Ashley said, “It raises concerns about the affordability of higher education. Economic hardship could lead more students to seek affordable options like community college. While four-year institutions might face declining enrollment on research and development, we have those economic challenges and reduced corporate investment that will likely decrease funding for university research… And then, depending on which party controls Congress, we could see significant changes in federal education policies.”

The Free Application for Federal Student Aid (FAFSA) has already begun award rollout for the 2025-26 academic year, and with the new rollouts schools are still adjusting for the 2025 winter term. Looking back on last year’s process, there has been an 8.9 percent change in the number of high school students completing the FAFSA, reaching 52 per 0.62 percent.

In addition to the big changes to the FAFSA rollout, the Department of Education has introduced new financial responsibility regulations that went into effect on July 1, 2024. With these new regulations, there are several new requirements that can impact compliance and strategies for higher education institutions. Institutions are expected to implement stricter financial responsibility criteria, adhere to enhanced certification for Title IV programming, undergo more rigorous scrutiny when it comes to how federal aid is managed, and are no longer allowed to withhold transcripts under certain circumstances as a means of debt collection.

The Department of Education is not the only agency with changes. The Department of Labor and the IRS both have new processes that will affect higher ed institutions.

The IRS is resuming their work on the 1098T changes which affect student tax credits and how tuition expenses are reported. As for the Department of Labor, new regulations regarding salary and overtime requirements have been finalized. The salary threshold for employees that are exempt from overtime under the Fair Labor Standards Act has significantly increased from $43,888 this past July to $58,656 expected to start January 1, 2025, with automatic updates every three years. While these changes could have significant implications for how institutions manage their staffing compensation, institutions will need to adjust in order to remain compliant.

There are a lot of changes on the horizon, and every institution needs to be informed and prepared to tackle them. “As we navigate this evolving policy landscape, it is critical that we all stay engaged and proactive in addressing these challenges,” Jackson said.

Need more information about current and future legislation? Check out the full Updates from the Hill webinar here.