President Biden's budget proposal for fiscal year 2025 tackles major higher education policy issues. It includes budgetary allocations directly aimed at supporting students in reaching their higher education goals, alleviating some of the financial barrier obstacles, and removing costly fees for students who borrow federal student loans. Although ambitious given the current political climate, the overall proposal aims to reduce the federal deficit, but is expected to face significant opposition. Approval of certain parts of the proposal could profoundly impact students.
Biden’s FY 2025 Budget
Biden's budget proposal covers a wide range of areas, including changes to taxes, healthcare, climate, and affordable housing to name a few. That's the interesting thing about the fiscal budget, it can affect several aspects of everyday life. The President's budget proposal sets the tone of a hopeful agenda, but the budget is not final and these ideas and programs may or may not be provided for. Only time will tell.
Free Community College
The idea of free community college has long been associated with the Biden administration. The First Lady, Dr. Jill Biden, is a long-time community college professor of English. While servicing as Second Lady, she was the Honorary Chair of the College Promise Advisory Board. She has been dedicated to the mission, “every student deserves the opportunity to go to community college and build a great career.”
The 2025 budget proposal aims to expand free community college through a Federal-State partnership. This opportunity if approved, would be offered to first-time students and workers looking to reskill.
Subsidized Tuition for Two-Years for Certain Schools
Financial challenges are a common worry when thinking about college after high school. In addition to the possibility of free community college, Biden's plan also covers two years of subsidized tuition for students from families earning less than $125,000 who attend a four-year historically Black college and university (HBCU), tribally controlled college and university (TCCU), or a minority-serving institution (MSI).
Pell Grant Expansion
The budget plans to increase the maximum Pell Grant award to $8,145 for the 2025-2026 award year. This would be a start on the path to work towards doubling the maximum Pell Grant award by 2029. This would be through a process of annually increasing the mandatory add-on. The Pell Grant supports low-income students with exceptional financial need, typically the students facing financial barriers to achieving higher education.
Supporting College Access and Completion
While various aspects of the budget proposal have direct effects on college students and tuition, there are initiatives that can tackle nationwide issues college students might encounter. The 'whole student' approach extends beyond tuition payments. College students, regardless of age, may face challenges that go beyond the classroom. Expenses like childcare, medical bills including prescriptions, and housing are all potential hurdles students, and their families may confront. If approved, these measures may make college a reality for student parents who struggle finding financial balance with their drive to successfully earn for their families.
Eliminating Federal Student Loan Fees
One downside of federal student loans is the costly loan fees. These fees eat into the aid meant for students, adding to the loan balance and accumulating interest. Unlike private student loans, federal Direct PLUS Loans carry origination fees of four percent or more, making private loans more competitive.
Another issue targeted in the budget proposal is to eliminate the “hidden” account maintenance fees paid to guaranty agencies.
Reducing the Costs of College Fund
This budget creates a mandatory $12 billion “Costs of College Fund” which would be invested into three areas to lower college costs for students. The first initiative area would be a competitive award for public institutions who can successfully deliver affordable quality education. These institutions would either use the competitive award to help more students, or to share their best practices to help other institutions. The second would fund $7 billion to States toward Classroom to Career. Classroom to Career would allow States to provide access to at least twelve transferrable career-connected dual enrollment credits to students while in high school. By earning transferrable credits in high school, students can reduce their college program costs. The third initiative would fund would be used to support evidence-based strategies that result in increased graduation rates, reduce cost burdens for students, and lower costs per graduate.
Increase Funding to the Office of Federal Student Aid
The Office of Federal Student Aid (FSA) operates the federal student aid programs. A major component of FSA is working with and managing the federal student loan servicers. The funding of $2.7 billion is earmarked for supporting the 46 million students and student loan borrowers. These funds would be used to help support all the federal student aid programs, including the new student loan servicing system and continued improvements of the Free Application for Federal Student Aid (FAFSA®).
Prospects, Challenges, and the Road Ahead
While President Biden's budget proposal focuses on college affordability, the budget is up for debate. It’s important to understand the impacts to higher education and college affordability, the budget also includes controversial policy. One area that divides the two political parties: taxing high earners. It’s also important to remember, while the budget proposal identifies the wishes of the Biden administration, the budget needs congressional approval.
The Biden administration is already facing challenges in the higher education space. With the rejection of Biden’s mass student loan forgiveness program in the Supreme Court, each time a new initiative is put forward, it is immediately criticized by his opposition, and sometimes the initiative is legally challenged.
The political climate in this country is especially challenging in an election year. It will be interesting to see which initiatives in the proposed budget get funded, and which initiatives remain ideas.