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As Democrats in the House were preparing to pass a $3 trillion coronavirus relief bill on Friday that had already been rejected by the Republican Senate, news from Michigan illustrated the stakes for higher education in whether Congress will be able to reach an agreement on sending aid to states.
A state senate revenue forecast said Michigan, bludgeoned by the coronavirus epidemic, will have to cut $2.6 billion from its current budget, which runs through September, The Detroit News reported. It will also have $3.3 billion less to spend in next year’s budget.
Daniel Hurley, CEO of the Michigan Association of State Universities, told Inside Higher Ed in an interview that he’s concerned colleges will have their funding slashed in a state that already ranks 44th nationally in per-capita higher education funding.
News of the coming state cuts to colleges, Hurley said, “is simultaneously unsurprising, yet surreal because of its magnitude.” Michigan became the latest state to announce it will have to make major budget cuts as it feels the effects of shuttered businesses, rising unemployment and additional health-care costs during the pandemic.
“I think all eyes are on Congress,” Hurley said, to rescue the states.
The $3 trillion HEROES Act, seen mainly as a statement of Democrats’ desires in future negotiations with the Republican Senate over another coronavirus relief package, passed the House in a party-line vote Friday.
What happens next is unclear, but no action is expected until at least June, after Congress returns from its Memorial Day recess.
Senate Republican leaders already have said the measure is "dead on arrival." Republican Senate Majority Leader Mitch McConnell has said he wants to assess with the Trump administration what impact the $3 trillion approved in previous packages has had before considering more aid, and a higher education lobbyist said Republicans don’t appear to be working actively on crafting their own proposal.
The HEROES Act, which includes a wide range of aid, including another round of up to $1,200 in payments to Americans, had been supported by higher education groups like the American Council on Education. It included the $500 billion in aid the nation’s governors have sought to soften cuts they will have to make in state budgets, including reductions in funding for colleges and universities.
In addition, the proposal set aside $27 billion in additional funding going to states for higher education. Colleges and universities would receive another $10.5 billion, including $1.7 billion for historically black colleges and universities and minority-serving institutions.
“This bill contains significant new funding for higher education institutions that will help alleviate the crippling financial impact posed by the coronavirus,” the American Council on Education, which lobbies for colleges and universities, said Thursday night. “Such support will not only assist institutions in surviving the current crisis, but will stabilize thousands of communities whose economies are anchored by colleges and universities.”
Groups pushing for canceling student debt, however, were disappointed when Democrats, citing the cost, scaled back its original proposal to write off $10,000 from every student borrower’s debt. The bill now only reduces the debt of economically distressed borrowers, defined as those who were in default, forbearance or deferral, were delinquent, or who would qualify for a $0 payment in an income-driven repayment plan as of March 12.
Kyle Southern, higher education policy and advocacy director for the Young Invincibles, a millennial advocacy group, said before the House passed the package that he heard the change was made out of concern over the cost. “Retreating here -- on one of the most critical issues, before the bill is even on the House floor -- shows a low priority for so many people whose student loan debts will weigh on them for a long time forward,” said Southern. “It's disappointing that they're already ceding this opportunity to support those borrowers, who should be the main people building an economic recovery.”
