How Biden’s $1.8T American Families Plan could help higher ed

From free community college tuition to expansion of the Pell Grants, an inside look at the sweeping proposal designed to boost student retention and completion.

The Biden Administration officially rolled out its $1.8 trillion American Families Plan on Wednesday, unveiling “transformational” initiatives designed to help both higher education institutions and students.

The plan calls for more than $80 billion to go toward expansion of Pell Grants, $62 billion toward retention and completion efforts for low-income and underserved students, deep investments in HBCUs and minority-serving institutions and two years of free community college for all.

The White House said its goal is to “expand access to affordable postsecondary education, laying the groundwork for innovation and inclusive economic growth for all Americans.” President Joe Biden and Vice President Kamala Harris have vowed to make postsecondary education a reality for millions by also boosting expenditures in child care, K-12 education and teachers.

“President Biden is championing an investment that acknowledges postsecondary education is a critical component of our economic recovery and competitiveness,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “We welcome the proposed down payment on doubling the Pell Grant. This movement is long overdue. We’ll be putting all of our effort into working with the administration and Congress to iron out details and make these proposed new investments a reality.”

Getting to the finish line with this proposal – and ensuring both sides of the political aisle are on board with its many details – will be a challenge for the president and his team. Its $2 trillion infrastructure plan released last month is still being discussed, and the two combined plans show the significant costs and scope involved in making widespread changes necessary to boost education and technology in America.

The details behind the plan

In an effort to “reinvest in the future of the economy and American workers” Biden has outlined a multipronged strategy for higher education.

To help improve outcomes for low-income families, he is asking that billions be targeted to boost Pell Grants for individual students who qualify, an increase that would push the maximum amount by an additional $1,400. The President noted that Pell Grants have failed to keep pace with rising costs, and those grants typically help serve “students of color.”

He is also asking that more than $60 billion go to improve the persistence and completion efforts of low-income students. As 40% of students fail to finish their postsecondary educations in six years, he suggested increased support such as mental health services, emergency basic needs grants and other wraparound initiatives, including childcare, can help improve those statistics. He also would like to see further expansion of hiring and retention of diverse faculty by institutions. Colleges that can show they have proven and evidence-backed programs in place, especially community colleges that serve high populations of underrepresented groups, will be eligible for grants.

The goal is to get students graduated, giving them a far better chance in a rapidly advancing society.

“For much of the 20th century, graduating from high school was a gateway to a stable job and a living wage,” the White House said in its plan. “But over the last 40 years, we have seen the most growth in jobs requiring higher levels of job preparation, including education and training. Today, 70% of jobs are held by people with more than a high school degree. American workers need and deserve additional support to build their skills, increase their earnings, remain competitive, and share in the benefits of the new economy.”

John Podesta, founder of the Center for American Progress, agreed.

“The AFP would put Americans on a path to prosperity by investing in the education and training that workers need to fill the jobs of the 21st century without going into debt,” he said in a statement. “As of last year, roughly 2 in 3 jobs in America require training beyond high school, which is why the AFP would build on the work of red and blue states alike to make community college tuition-free nationwide. The plan would also make it easier for students to remain in and finish their degrees by increasing the Pell Grant by $1,400 and covering the cost of tuition for two years at the nation’s HBCUs, MSIs, and tribal colleges.”

Two of the other huge strategies being proposed by Biden essentially would pay for students to get two years of education for free. He has targeted $109 billion be used to get all Americans, including DREAMers (or undocumented immigrants), no-cost community college. This would include adult learners looking for new skills. The offers could be used for as long as four years to give working individuals flexible opportunities to finish their academic work. The White House estimates the program could impact as many as 5.5 million students.

The other is a $39 billion effort to “subsidize tuition and expand programs in high-demand fields at Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities and Minority-Serving Institutions.” It essentially would grant students from families earning less than $125,000 free tuition to those institutions. In addition to the $45 billion the President asked in his Jobs Plan to help these colleges gain a stronger foothold in higher education, he also wants to see $5 billion more in aid used to help beef up their “academic, administrative, and fiscal capabilities.”

So, how will all of it be funded?

Biden said he plans to increase taxes on wealthy Americans, or those who rise above the $400,000 income threshold. By doing that, he says the American Families Plan not only will be “fully paid for over 15 years, but will reduce deficits over the long term.”

Among the other initiatives within the American Families Plan are $200 billion toward free universal pre-school for all 3- and 4-year-olds and another $9 billion toward professional development and diversification of teachers.

Notably absent from the proposal was any language regarding the nationwide $1.5 trillion student loan debt held by borrowers. Several senators have pitched that  large portions be waived or forgiven. The Biden Administration entertained potentially eliminating $10,000 in debt for each student borrower in the run-up to the election.

Chris Burt
Chris Burt
Chris is a reporter and associate editor for University Business and District Administration magazines, covering the entirety of higher education and K-12 schools. Prior to coming to LRP, Chris had a distinguished career as a multifaceted editor, designer and reporter for some of the top newspapers and media outlets in the country, including the Palm Beach Post, Sun-Sentinel, Albany Times-Union and The Boston Globe. He is a graduate of Northeastern University.

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