President’s 2025 budget proposal calls for free community college, Pell Grant increases

Last week, the Biden Administration released its Fiscal Year 2025 budget proposal, which calls for free community college; additional funding for Pell Grants; and greater investment in Minority-Serving Institutions (MSIs), Historically Black Colleges and Universities (HBCUs), Tribally Controlled Colleges and Universities (TCCUs), and Hispanic-Serving Institutions (HSIs), Higher Ed Dive reports. The budget is not likely to pass in the divided Congress but reflects the administration’s higher education priorities.

“This is a really astute understanding of where the best gains can be made in the higher education space,” Jon Fansmith, senior vice president for government relations and national engagement at the American Council on Education, tells Higher Ed Dive. “It may not necessarily be new, or may be variations on previous proposals, but it’s the right place to keep putting emphasis.”

More aid for HBCUs, free community college

The proposal requests $82.4 billion in discretionary funding for the U.S. Department of Education, including $2.7 billion for the Education Department’s Office of Federal Student Aid, a $625 million increase compared to Fiscal Year 2023. The rollout of the new Free Application for Federal Student Aid (FAFSA) and the end of the federal student loan repayment pause has strained the Office of Federal Student Aid’s resources, Higher Ed Dive says. The additional funds will boost the office’s capacity and support Career and Technical Education state grants and other career and college pathways.

The budget plan proposes a federal-state partnership to establish two years of free community college for first-time college students and workers wanting to reskill, and two tuition-free years for students from families making under $125,000 and those who attend four-year HBCUs, TCCUs, HSIs, or MSIs.

Under the proposal, HBCUs, TCCUs, MSIs, and under-resourced institutions, such as community colleges, would receive a $93 million increase in funding to boost their institutional capacity. Four-year HBCUs, TCCUs, and MSIs would also receive $100 million for research and development infrastructure. In 2023, the U.S. Secretaries of Education and Agriculture called on 16 governors to address the more than $12 billion gap in funding between their states’ land-grant HBCUs and non-HBCU land-grant institutions. Only two states, Delaware and Ohio, have equitably funded their land-grant HBCUs. 

Related: Report urges Congress to address persistent underfunding of Black land-grant universities >

The plan allocates $1.4 billion for science, technology, engineering, and math (STEM) education and workforce development programs at the National Science Foundation that emphasize diversity, equity, inclusion, and accessibility, and funds programs that help increase participation of students from historically underrepresented groups in science and engineering fields, including women, girls, and people of color.

Boosting college affordability

The budget proposal would increase the maximum Pell Grant from $7,395 to $8,145 for students enrolled in nonprofit colleges and to $7,495 for students at for-profit institutions. For-profit colleges are exempt from the maximum increase because they are least likely to produce good student outcomes, the administration says. The budget also includes a plan to double the Pell Grant maximum award by 2029.

The budget would invest $12 billion in a Reducing the Costs of College Fund to finance strategies to lower college costs and ensure students have more affordable access to postsecondary degrees and to dual enrollment opportunities. The fund would create a competitive award for institutions that offer affordable, quality education to incentivize excellence and affordability in higher education. The proposal also would eliminate origination fees for federal student loans under the Higher Education Act. According to the White House, parents who take out loans for their child’s college education would save $2,800, and teachers and nurses with federal student loans would save an average of $1,000, Higher Ed Dive reports. 

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