Flag in front of the US Capitol

On Jan. 20, 2021, the United States of America ushered its 46th president, Joseph “Joe” R. Biden, Jr., into office. Additionally, the mid-January runoff Senate elections in Georgia resulted in the victories of Democrats Jon Ossoff and Raphael Warnock. With these victories, the 50/50 split of the Senate yields to a decisive tiebreaker vote of Vice President Kamala Harris—meaning both the House of Representatives and Senate are now presumably in Democrats’ control.

With these factors, the route to effectively introducing and passing future legislation high on the Biden agenda has been eased. It’s less likely that executive orders or regulatory and enforcement authorities will be needed to enact new laws and relief. We’ve explored what that means for the future of higher education.

Addressing the Effects of COVID-19

While the Trump administration’s agenda focused on reversing much of the legislation enacted by the Obama administration, the Biden camp will look to restore Obama-era policies he helped build as vice president. However, these restorations will also include measures to ease the effect the COVID-19 pandemic that has raged since March 2020—including bringing immediate and swift aid to struggling businesses, educational institutions and workforces.

Biden has also vowed to immediately revisit the second stimulus bill signed into law by former President Donald Trump on Dec. 27, 2020. This bill provided $600/person ($1200/couple) in relief and, through H.R. 133, extends the funding to operate the Federal Government through September 2021. Biden wants to extend and increase the relief funding amounts to $2000/person ($4000/couple) as soon as possible.

Swift Changes

In higher education, Biden’s attention will be turned to a few key areas:

  • The extension of the payment pause and interest waiver for federal student aid that was enacted by the Trump Administration
  • Affordability and repayment of loans
  • Relief for undocumented students through expected changes to Deferred Action for Childhood Arrivals (DACA). Biden’s stance on immigration through his pledge to reinstate DACA could lead to replenished international student enrollment, which has seen declines in recent years.

Another expected change from the Biden camp is to augment the Trump Administration policy on Title IX of the Education Amendments of 1972. Women’s rights advocates have warned this policy would discourage victims of sexual assault and harassment on campuses from coming forward.

Education Availability and Affordability

The Higher Education Act of 1965, which governs federal student aid programs, was last reauthorized in 2008. While it expired in 2013, it was last extended through 2014 to give Congress time to prepare changes for its next reauthorization.

However, no new legislation has been proposed for its extension during that time. This has caused red flags and bipartisan splits for support as each side has proposed changes in the Free Applications for Federal Student Aid (FAFSA) system. Both parties have also championed reform including improved loan counseling, transparency on education cost and financial aid available, higher loan values made available based on need, and simplification to the repayment system.

The Higher Education Act provided an additional $22.7 billion in pandemic relief to colleges and universities. Funding has been allocated in a format similar to the disbursement model used in the CARES Act of March 2020 (read here for a complete breakdown).

Student Loan Forgiveness

Multiple avenues and proposals for student loan forgiveness have been outlined by the Biden Administration as immediate action items:

  • Forgiveness of tuition-related undergraduate federal student loan debt for borrowers who attended public colleges, Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCU), Hispanic-serving institutions (HSI) and minority-serving institutions (MSI), as well as for borrowers who earn less than $125,000 a year.
  • Forgiveness of up to $10,000 in federal student loans per borrower.
  • The restoration of bankruptcy discharge rights for student loans.
  • Simplification of Public Service Loan Forgiveness (PSLF).

With this, Biden has pledged to double the maximum amount for Pell Grants, which help pay student living expenses. He has also promised to significantly increase research spending, a move welcomed by the president of the American Association of Universities.

Also included was a reduction of the size of the FAFSA from 108 questions to 36, aiming to reduce the barrier to entry for many students who do not complete the burdensome form each year, and an expansion of Pell Grant eligibility for incarcerated persons.

Future changes to income-driven repayment could be implemented during the Biden administration through regulatory changes, as witness in the previous enacted PAYE and REPAYE plans.

HBCU Investments

In addition to significant impacts on student enrollment through financial aid, Biden has indicated an intent to increase research spending, including a focus on improved research at HBCUs. As president-elect, he pledged more than $70 billion to these and other minority-serving institutions. This includes $20 billion to update and enhance research facilities and $10 billion to create centers of excellence.

Collegiate Athletics – Name, Image and Likeness

Other topics such as name, image, and likeness (NIL) legislation and reform are now in the halls of Congress as individual states are passing laws of enforcement and opportunity. To date, six states have signed laws governing NIL:

  • California (SB 206): Legislation goes into effect Jan. 1, 2023
  • Colorado (SB 20-123): Legislation goes into effect Jan. 1, 2023
  • Florida (SB 646): Legislation goes into effect July 1, 2021
  • Michigan (HB 5217, 5218): Legislation goes into effect Dec. 31, 2022
  • Nebraska (LB 962): Legislation goes into effect July 1, 2023
  • New Jersey (NJ S971): Effective the fifth academic year following enactment

Of the remaining 44 states, 33 have had bills introduced into the legislative process. The rest have not shown action to provide their own governing or opinion accordingly.

The National Association of Intercollegiate Athletics (NAIA) took the lead on NIL legislation on Oct. 6, 2020, passing national legislation with overwhelming support from its membership. NAIA leaders recognized that “doing what was right for our student-athletes outweighed any potential issues and taking no action now would likely force some NAIA schools to choose between compliance with state laws and NAIA rules.”

The National College Athletic Association (NCAA) is continuing discussions for enacting legislation for its Division I, II, and III levels. Most recently, it tabled a planned vote on NIL during its annual convention amid ongoing Supreme Court cases and changes within Senate membership. The Department of Justice weighed in on the NCAA’s most recent move as assistant attorney general Makan Delrahim was concerned the NCAA’s approach to NIL “may raise concerns under antitrust laws.”

Members of Congress have proposed multiple federal bills to address NIL supported by both sides of the aisle. With a shift in the majority, this could further emphasize more dramatic reform for college athletes. Democratic Senators Cory Brooker, Richard Blumenthal and others have led the charge in driving significant change for NCAA athlete compensation, including group licensing, and healthcare protections in their proposed legislation. This proposal is more aggressive than similar bills introduced by their GOP counterparts.

LEAD1 CEO Tom McMillen indicated there will be a “much bigger push for a comprehensive bill, probably far beyond NIL…I think you’re going to have to see more things done on medical and healthcare and so forth… Some compromise will have to come out of here.”

These anticipated changes under the Biden administration will have dramatic effects on the landscape of higher education. Increased financial aid and student loan forgiveness will bring increases in enrollment. Increased enrollment along with increases in research creates opportunities for growth within the higher education industry in the years to come. And while NIL is a hot topic, Congress and the President will have bigger priorities to address. As a result, we don’t anticipate any significant changes to the collegiate athletics landscape in the near future.

James Moore’s higher education and collegiate athletics CPAs will keep providing updates and clarification as the political landscape evolves. We are tracking the developments affecting your industry and are available to discuss how these changes could impact your institution.

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