Dive Brief:

• U.S. Education Secretary Miguel Cardona defended the White House’s fiscal 2024 budget proposal, which includes $90 billion in discretionary spending for his agency, before a Senate subcommittee Thursday.
• Cardona reiterated the timeline to the Senate Subcommittee on Labor, Health and Human Services, Education, and Related Agencies for when the Education Department intends to restart student loan payments. The federal government has yet to lift the pause it implemented during the early months of the coronavirus pandemic.
• Senators also wanted to know how the Education Department intends to invest in career and technical ed, and how the agency could adapt its financial aid, like federal Pell Grants, to allow more students to enroll in such programs.

Dive Insight:

In March, President Joe Biden issued his spending plan, which conservatives immediately declared dead on arrival. While the budget proposal has no chance of passing Congress as drafted, it signals the administration’s education priorities. 

That includes sending $2.7 billion to the Office of Federal Student Aid, $620 million more than in fiscal 2023. The proposed FSA funding is key as the Biden administration attempts to rework the beleaguered student loan system, putting in new regulations that would shape it and restart monthly loan payments. 

Pundits have grown concerned that a dearth of FSA funding could complicate this effort.

Sen. Shelley Moore Capito, a West Virginia Republican and ranking member on the subcommittee, told Cardona during Thursday’s hearing that the administration's communication should be clearer around the repayment freeze and its end date.

She called on the secretary to be “more specific” about the transition. Her comments came amid news reports that loan servicers are struggling financially, including one, Nelnet, which has laid off hundreds of employees. 

At least one loan company is suing the Biden administration over the ongoing repayment moratorium. And the Mackinac Center for Public Policy, a right-wing think tank, sued over the pause Thursday, urging a federal court to overturn it. 

Cardona said that the Education Department is readying to restart payments. This is planned to occur either at the end of June or once the U.S. Supreme Court rules on Biden’s plan to forgive mass amounts of student debt, whichever comes first. 

The secretary assured Capito and other lawmakers that the agency is confident the Supreme Court will rule in its favor, but it is prepared to reinstate monthly payments regardless.

Cardona also spoke about his support for broadening Pell Grants to allow them to apply to short-term programs. This concept has gained bipartisan support, despite concerns about the money going to short programs with potentially poor outcomes.

“We need to be more malleable,” Cardona said.

Biden’s budget proposal would also bolster federal Pell Grants, a form of financial aid for low- and moderate-income students, raising the 2024-2025 maximum award to $8,215. 

And it pitches tuition-free community college. 

Biden is seeking a federal-state partnership that would support free college. It would start with about a $500 million investment for a discretionary grant program, which would provide two years of community college at no cost to students enrolled in programs that lead to a four-year degree or “good-paying job.”