President Donald Trump on Friday night signed a year-long continuing resolution (CR) for fiscal year (FY) 2025, ensuring funding for federal agencies through September 30.
The bill made it through the Senate with several key Democratic votes. The debate has riven the Democratic party; those who supported the measure, notably Minority Leader Charles Schumer (D-New York), stated that voting for a bill they very much disliked was preferable to a government shutdown, for which they would be blamed politically, and that a shutdown would have potentially given the Trump administration broad latitude to further intervene in agency policies and operations.
The legislation has critical implications for community colleges and their students and, as expected, does not reflect some of the key funding priorities of the American Association of Community Colleges (AACC). The bill’s overall approach is to maintain FY24 (last year’s) funding through FY25. However, the CR’s structure provides an unusual degree of discretion to the executive branch to set individual program spending levels because it lacks a detailed accompanying table on individual programs as well as the traditional “explanatory statement,” Congress’s usual practice to ensure that its intent is reflected in implementation. (These reports generally accompany all conference legislation, not just appropriations bills.)
Without these materials for stakeholders to rely upon, there will be some uncertainty about funding levels for the fiscal year until the agencies themselves announce specific funding amounts for individual programs. There simply is no way of telling what the Trump administration will do, but as the fiscal year will be half over in less than two weeks, hopefully, these decisions will be made in short order.
No congressionally directed spending
Additionally, all the congressionally directed spending projects, including those in the U.S. Education Department, were stripped from the funding bill. This was an ongoing concern for community college leaders as the possibility of a CR grew, and regretfully that fear has materialized. There have been no definitive signs from congressional appropriators about whether these “earmarks” will be allowed next year, but at this time that seems unlikely.
The FY26 funding cycle is already behind schedule but will start soon. Trump’s budget priorities are expected to be released shortly, and after that, hearings and the usual process (however loosely defined) will ensue.
Budget reconciliation: our interests and activity
With the FY25 appropriations process concluded, congressional attention will turn back to the budget reconciliation process, which allows Senate Republicans to move legislation by a simple majority vote. This process will give Republicans the opportunity to pass sweeping partisan legislation, if they can stay united.
However, House and Senate Republican caucuses are currently divided on whether there will be one reconciliation bill – the House position – or two, as supported by the Senate. Discussions on this approach, which have enormous implications for Trump’s ambitious legislative agenda, are expected to begin in earnest by the end of this month. Stated timelines become exercises in wish-fulfillment, but there are hopes of getting the bill done this summer.
As reported, community colleges have a tremendous amount at stake in reconciliation. Until congressional committees receive instructions about how much money they must save — and the House and Senate education committees will likely have to generate large savings from programs under their jurisdiction — the reach of the proposals is uncertain.
AACC continues to focus on four primary issues within the reconciliation rubric:
- Enact the Workforce Pell Grant. It is possible that this eligibility expansion long-sought by community colleges could be included in reconciliation. The overriding goal of reconciliation is to save money, not spend additional funds, even small amounts as in the case of Workforce Pell, so this opportunity will require dedicated advocacy from community colleges and other supporters.
- Shore up Pell Grant program funding. As reported, the Pell Grant program faces a massive shortfall, and it is a concern across Capitol Hill. Again, while this year’s reconciliation focus is overwhelmingly on limiting spending, there are hopes that the process can be used to help shore up Pell.
- Oppose risk-sharing. AACC has long opposed risk-sharing, the basic concept of which is to charge institutions based on student loan defaults or other repayment metrics. In the reconciliation process, the House is likely to pursue some variant of the risk-sharing scheme advanced in last Congress’ College Cost Reduction Act (CCRA), while the Senate’s position is currently less defined. AACC’s position has remained consistent: community colleges oppose requiring institutions to pay money to the federal government because of the loan repayments of their former students. In reconciliation, other “accountability” measures that might fall under the general category of risk-sharing may be advanced, including “gainful employment for all programs.”
- Support tax-free Pell Grant legislation. AACC continues to work to end the taxation of the portion of the Pell grants that are used for living expenses and other non-tuition items, and to help the lowest-income students qualify for the $2,500 American Opportunity Tax Credit (AOTC). Current policy is profoundly biased against community college students, because of the low tuition they pay.
AACC’s lobbying on these issues has focused on Republican offices with members on the committees that oversee these programs as they are the players who will shape this legislation. For more details on AACC’s positions on these issues and the particular members who are in key decision-making roles at this time, please visit our website.
AACC will keep its members informed on this key legislation.
