Sec. 20021. Grants for Tuition-Free Community College
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Title VII of the Higher Education Act of 1965 ( 20 U.S.C. 1133 et seq. ) is amended by adding at the end the following: Beginning with award year 2023–2024, from amounts appropriated to carry out this subpart for any fiscal year, the Secretary shall award grants to States and eligible Tribal Colleges and Universities to pay the Federal share of expenditures needed to carry out the activities and services described in section 789 . The Secretary shall award grant funds under subsection
(a)for an award year not less than 30 days before the first day of the award year. Subject to paragraph
(2), the amount of the Federal share of a grant under this subpart shall be based on a formula that provides, for each eligible student enrolled in a community college operated or controlled by the State or in an eligible Tribal College or University, a per-student amount (based on full-time equivalent enrollment) that is equal to the applicable percent described in subparagraph
(B), or the percent described in paragraph
(2)with respect to an eligible Tribal College or University, of— for the 2023–2024 award year, the median resident community college tuition and fees per student in all States, not weighted for enrollment, for the most recent award year for which data are available; and for each subsequent award year, the amount determined under this paragraph for the preceding award year, increased by the lesser of— a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary) since the date of such determination; or 3 percent. The applicable percent for a State receiving a grant under this subpart shall be— for the 2023–2024 award year, 100 percent; for the 2024–2025 award year, 95 percent; for the 2025–2026 award year, 90 percent; for the 2026–2027 award year, 85 percent; and for the 2027–2028 award year, 80 percent. The amount of the Federal share for an eligible Tribal College or University receiving a grant under this subpart shall be the greater of— 100 percent of the per-student amount determined in accordance with clause
(i)or
(ii)of paragraph (1)(A) , as applicable, with respect to eligible students enrolled in such eligible Tribal College or University (based on full-time equivalent enrollment); or the amount that is 100 percent of the total amount needed to set tuition and fees to $0 for all eligible students enrolled in such eligible Tribal College or University for the 2021–2022 award year, increased by the percentage increase in the Consumer Price Index (as determined by the Secretary) between July 1, 2021, and the applicable award year, and adjusted to reflect the enrollment in such eligible Tribal College or University for such applicable award year. The State share of a grant under this subpart for each award year shall be the amount needed to pay the applicable percent described in subparagraph
(B)of the median resident community college tuition and fees in all States, not weighted for enrollment, per student (based on full-time equivalent enrollment) determined in accordance with subsection (a)(1)(A)(i) for all eligible students enrolled in a community college operated or controlled by the State for such award year. The applicable percent shall be— for the 2023–2024 award year, 0 percent; for the 2024–2025 award year, 5 percent; for the 2025–2026 award year, 10 percent; for the 2026–2027 award year, 15 percent; and for the 2027–2028 award year, 20 percent. The State shall provide the State share even if the State is able to set tuition and fees charged to eligible students attending community colleges operated or controlled by the State to $0 as required by section 788(a) without such State share. Except with respect to funding described in paragraph (2)(A) , no funds that count toward the maintenance of effort requirement under section 788(c) may also count toward the State share under this subsection. If the Secretary determines that requiring an outlying area or territory to provide a State share in accordance with this subsection would represent a substantial hardship for the outlying area or territory, the Secretary may reduce or waive the State share for such area or territory. If the Secretary so reduces or waives the amount of the State share of an outlying area or territory, the Secretary shall increase the applicable percent used to calculate the Federal share for such area or territory, in proportion to the reduction in the applicable percent used to calculate such State share. For the purposes of this subparagraph, the term outlying area or territory means the Commonwealth of Puerto Rico, the District of Columbia, Guam, American Samoa, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, and the Freely Associated States. In the case of a State that demonstrates to the satisfaction of the Secretary that community colleges operated or controlled by such State will not experience a net reduction in total per-student revenue (including revenue derived from tuition and fees) as compared to the preceding fiscal year in such State, a State may include, as part of the State share— any financial aid that is provided from State funds to an eligible student and that— is not awarded predominantly on the basis of merit, including programs awarded on the basis of predicted or actual academic performance or assessments; and may be used by such student to pay any component of cost of attendance, as defined under section 472; and any funds provided to community colleges by local governments in such State for the purpose of carrying out this subpart. The inclusion of funds described in paragraph
(2)as part of a State’s share shall modify the maintenance of effort requirements under section 788(c) in accordance with the provisions of— section 791(10)(B)(iii) , with respect to funds included under paragraph (2)(A) ; and section 791(10)(A)(ii) , with respect to funds included under paragraph (2)(B) . A State shall not include in-kind contributions for purposes of the State share described in paragraph
(1). For purposes of subsections
(a)and (b), the Secretary shall, in consultation with the State or eligible Tribal College or University concerned, determine the estimated number of eligible students enrolled in the community colleges operated or controlled by such State or in such eligible Tribal College or University for the applicable award year. For each year for which a State or eligible Tribal College or University receives a grant under this subpart, the Secretary shall, once final enrollment data for such year are available— in consultation with the State or eligible Tribal College or University concerned, determine the actual number of eligible students enrolled in the community colleges operated or controlled by such State or in such eligible Tribal College or University for the year covered by the grant; and adjust the Federal share of the grant amount received by the State or eligible Tribal College or University and the State share under subsection
(b)to reflect the actual number of eligible students, which may include applying the relevant adjustment to such Federal share or the State share, or both, in the subsequent award year. For purposes of this subpart, the term community college operated or controlled by a State shall include a community college operated or controlled by a local government within such State. The Secretary may not apply any requirements applicable only to States under this subpart to an eligible Tribal College or University, including the requirements under subsection
(b), section 788(b) and (c), and section 790 . In order to receive a grant under this subpart, a State or eligible Tribal College or University shall submit an application to the Secretary that includes— an estimate of the number of eligible students enrolled in the community colleges operated or controlled by the State or in the eligible Tribal College or University and the cost of waiving tuition and fees for all eligible students for each award year covered by the grant; in the case of a State, a list of each of the community colleges operated or controlled by the State; an assurance that each community college operated or controlled by the State, or the eligible Tribal College or University, as applicable, will set community college tuition and fees for eligible students to $0 as required by section 788(a) ; a description of how the State or eligible Tribal College or University will ensure that programs leading to a recognized postsecondary credential meet the quality criteria established by the State under section 122(b)(1) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3152(b)(1) ) or other quality criteria determined appropriate by the State or eligible Tribal College or University; an assurance that each community college operated or controlled by the State or the eligible Tribal College or University, as applicable, has entered into a program participation agreement under section 487; an assurance that the State or eligible Tribal College or University will assist eligible students in obtaining information about and accessing means-tested Federal benefit programs and similar State, tribal, and local benefit programs that can provide financial assistance for any component of the student’s cost of attendance, as defined under section 472, other than tuition and fees; an assurance that, for each year of the grant, the State or eligible Tribal College or University will notify each eligible student of the student’s remaining eligibility for assistance under this subpart; if the application is submitted by a State— an assurance that the State will meet the requirements of section 788(b)(1) relating to the alignment of secondary and postsecondary education; and an assurance that the State will meet the requirements of section 788(b)(2) relating to the improvement of transfer pathways between institutions of higher education; and an assurance that the State or eligible Tribal College or University will clearly communicate to prospective students, including students with prior college experience who have not completed a postsecondary degree or credential, their families, and the general public— plans to implement the program funded under this subpart; and how eligible students can attend a community college operated or controlled by the State or an eligible Tribal College or University without paying tuition and fees. As a condition of receiving a grant under this subpart in each award year, a State or eligible Tribal College or University shall— ensure that the total amount of tuition and fees charged to an eligible student attending a community college operated or controlled by the State or the eligible Tribal College or University, as applicable, is $0; not apply financial assistance for which an eligible student qualifies to tuition or fees; and not use any funds provided under this subpart for administrative purposes relating to such grant. In addition to the requirements under subsection
(a), as a condition of receiving a grant under this subpart a State shall meet the following requirements: The State shall— submit and implement a plan to align the requirements for receiving a regular high school diploma from public schools in the State with the requirements for entering credit-bearing coursework at community colleges in such State; and not later than 3 years after the date on which the State first receives a grant under this subpart, certify to the Secretary that such alignment has been achieved. The State shall— submit a plan, developed in collaboration with faculty from institutions of higher education in the State, to improve transfer pathways among institutions of higher education in the State, including by— ensuring that associate degrees awarded by community colleges in the State are fully transferable to, and credited as, the first 2 years of related baccalaureate programs at public institutions of higher education in such State; increasing the transferability of individual courses within the certificate or associate programs offered by community colleges in the State to related baccalaureate programs offered by institutions of higher education in such State to maximize the transferability of credits for students who transfer before completing an associate degree; expanding the use of reverse transfer policies that allow institutions to— implement the process of retroactively granting a certificate or associate degree to students who had not completed the requirements for such certificate or degree before they transferred; and allow academic credits for coursework completed at a 4-year institution to be applied to a previously-attended community college for the purpose of obtaining an associate degree or a certificate; and ensuring that students attending community colleges in the State have access to comprehensive counseling and supports to facilitate the process of transferring to a 4-year institution of higher education; and not later than 3 years after the date on which the State first receives a grant under this subpart, certify to the Secretary that the State is carrying out the plan submitted in accordance with subparagraph
(A)and is meeting the requirements of clauses
(i)through
(iv)of such subparagraph. A State receiving a grant under this subpart shall be entitled to receive its full allotment of funds under this subpart for a fiscal year only if, for each year of the grant, the State provides— State fiscal support for higher education per full-time equivalent student at a level equal to or exceeding the average amount of State fiscal support for higher education per full-time equivalent student provided for the 3 consecutive preceding fiscal years; financial support for operating expenses (excluding capital expenses and research and development costs) for public 4-year institutions of higher education at a level equal to or exceeding the average amount provided for the 3 consecutive preceding State fiscal years; and financial support for need-based financial aid at a level equal to or exceeding the average amount provided for the 3 consecutive preceding State fiscal years. A State or eligible Tribal College or University that receives a grant under this subpart may not impose additional eligibility requirements on eligible students other than the requirements under this subpart. No individual shall be determined to be ineligible to receive benefits provided under this subpart (including tuition and fees set to $0 and other aid provided under this subpart) on the basis of citizenship, alienage, or immigration status. Except as provided in subsection
(b)— a State shall use a grant under this subpart only to provide funds to each community college operated or controlled by the State to enable each such community college to set community college tuition and fees for eligible students to $0 as required under section 788(a) ; and an eligible Tribal College or University shall use a grant under this subpart only to set community college tuition and fees for eligible students to $0 as required under section 788(a) . If a State or an eligible Tribal College or University demonstrates to the Secretary that the State or eligible Tribal College or University has grant funds remaining after meeting the demand for activities described in subsection
(a), the State or eligible Tribal College or University shall use the remaining funds to carry out 1 or more of the following: Providing need-based financial aid to students that may be used by such students to pay any component of cost of attendance, as defined under section 472. Reducing unmet need at public 4-year institutions of higher education. Improving student outcomes by implementing evidence-based institutional reforms or practices, including reforms or practices that are described in section 795D(b)(1) or that meet an evidence tier defined in section 795E(2). Expanding access to dual or concurrent enrollment programs or early college high school programs. Except as provided in section 786(b)(2)(A) , funds made available under this subpart shall be used to supplement, and not supplant, other Federal, State, tribal, and local funds that would otherwise be expended to carry out activities described in this section. Except as provided in paragraph
(2), a State or an eligible Tribal College or University receiving a grant under this subpart for an award year may continue to receive funding under this subpart for subsequent award years conditioned on the availability of budget authority and on meeting the requirements of the grant, as determined by the Secretary. The Secretary shall discontinue or reduce funding of the Federal share of a grant under this subpart if the State or an eligible Tribal College or University has violated the terms of the grant. Nothing in this subpart shall be construed to impact the availability of funds from, or uses of funds provided by, the Bureau of Indian Education for Tribal Colleges and Universities. A State that meets the qualifying spending requirement may request a waiver of the requirements under section 788(c) . Upon request by such a State, the Secretary shall waive the requirements of section 788(c) for the State as follows: With respect to each State eligible for relief under tier I, such requirements shall be waived for the fiscal year succeeding the fiscal year for which the determination of the State’s eligibility for such relief is made. With respect to each State eligible for relief under tier II, III, IV, or V, such requirements shall be waived, in accordance with subsection
(d), for— the fiscal year for which the determination of the State’s eligibility for such relief is made; the fiscal year succeeding the fiscal year described in subparagraph
(A); or both such fiscal years. A State that meets the qualifying spending requirement and is eligible for relief under tier II, III, IV, or V may request relief with respect to the requirements of section 786(b)(1)(B) . Upon request by such a State, the Secretary shall provide relief from the requirements of section 786(b)(1)(B) , for the applicable award year or years, for the State as follows: With respect to a State that is eligible for relief under tier II, the Secretary shall— apply section 786(a)(1)(B)(v) by substituting 85 percent for 80 percent ; and apply section 786(b)(1)(B)(v) by substituting 15 percent for 20 percent . With respect to a State that is eligible for relief under tier III, the Secretary shall— apply section 786(a)(1)(B)(iv) by substituting 90 percent for 85 percent ; apply section 786(a)(1)(B)(v) by substituting 90 percent for 80 percent ; apply section 786(b)(1)(B)(iv) by substituting 10 percent for 15 percent ; and apply section 786(b)(1)(B)(v) by substituting 10 percent for 20 percent . With respect to a State that is eligible for relief under tier IV, the Secretary shall— apply section 786(a)(1)(B)(iii) by substituting 95 percent for 90 percent ; apply section 786(a)(1)(B)(iv) by substituting 95 percent for 85 percent ; apply section 786(a)(1)(B)(v) by substituting 95 percent for 80 percent ; apply section 786(b)(1)(B)(iii) by substituting 5 percent for 10 percent ; apply section 786(b)(1)(B)(iv) by substituting 5 percent for ’15 percent’; and apply section 786(b)(1)(B)(v) by substituting 5 percent for 20 percent . With respect to a State that is eligible for relief under tier V, the Secretary shall— apply section 786(a)(1)(B)(ii) by substituting 100 percent for 95 percent ; apply section 786(a)(1)(B)(iii) by substituting 100 percent for 90 percent ; apply section 786(a)(1)(B)(iv) by substituting 100 percent for 85 percent ; apply section 786(a)(1)(B)(v) by substituting 100 percent for 80 percent ; apply section 786(b)(1)(B)(ii) by substituting 0 percent for 5 percent ; apply section 786(b)(1)(B)(iii) by substituting 0 percent for 10 percent ; apply section 786(b)(1)(B)(iv) by substituting 0 percent for ’15 percent’; and apply section 786(b)(1)(B)(v) by substituting 0 percent for 20 percent . With respect to each State eligible for relief under tier II, III, IV, or V, the Secretary shall provide the relief under paragraph
(1), in accordance with subsection
(d), for— the award year for which the determination of the State’s eligibility for such relief is made; the award year succeeding the award year described in subparagraph
(A); or both such award years. A State’s eligibility for relief under this section shall be determined as follows: A State shall be eligible for relief under tier I for a fiscal year for which— the State is in an elevated unemployment period at any point in the fiscal year; and the State is not eligible for relief under any other tier. A State shall be eligible for relief under tier II for a fiscal or award year, as applicable, for which— the State average unemployment rate is equal to or greater than 6.5 percent but less than 7.5 percent at any point in the fiscal or award year; or the national average unemployment rate is equal to or greater than 6.5 percent but less than 7.5 percent at any point in the fiscal or award year; and the State is not eligible for relief under tier III, IV, or V. A State shall be eligible for relief under tier III for a fiscal or award year, as applicable, for which— the State average unemployment rate is equal to or greater than 7.5 percent but less than 8.5 percent at any point in the fiscal or award year; or the national average unemployment rate is equal to or greater than 7.5 percent but less than 8.5 percent at any point in the fiscal or award year; and the State is not eligible for relief under tier IV or V. A State shall be eligible for relief under tier IV for a fiscal or award year, as applicable, for which— the State average unemployment rate is equal to or greater than 8.5 percent but less than 9.5 percent at any point in the fiscal or award year; or the national average unemployment rate is equal to or greater than 8.5 percent but less than 9.5 percent at any point in the fiscal or award year; and the State is not eligible for relief under tier V. A State shall be eligible for relief under tier V for a fiscal or award year, as applicable, for which— the State average unemployment rate is equal to or greater than 9.5 percent at any point in the fiscal or award year; or the national average unemployment rate is equal to or greater than 9.5 percent at any point in the fiscal or award year. In determining the fiscal years for which to provide relief in accordance with subsection (a)(2) , or the award years for which to provide relief in accordance with subsection
(b), to a State that is eligible under tier II, III, IV, or V, the Secretary shall take into account the following: In the case of a State that requests relief under subsection (a)(2) , the fiscal years for which the State requests such relief, including— if the State requests such relief for the fiscal year for which the determination of the State’s eligibility for such relief is made, the amount by which the State is unable to meet the requirements of section 788(c) for such fiscal year; and if the State requests such relief for the fiscal year succeeding the year described in subparagraph
(A), the amount by which the State anticipates being unable to meet such requirements for such succeeding fiscal year. In the case of a State that requests relief under subsection
(b), the award years for which the State requests such relief, including— if the State requests such relief for the award year for which the determination of the State’s eligibility for such relief is made, the extent to which the State is unable to meet the requirements of section 786(b)(1)(B) for such award year; and if the State requests such relief for the award year succeeding the year described in subparagraph
(A), the extent to which the State anticipates being unable to meet such requirements for such succeeding award year. The actual or anticipated timing, severity, and duration of the unemployment rate increase during— the fiscal or award year, as applicable, for which the determination of the State’s eligibility for such relief is made; the fiscal or award year, as applicable, succeeding the fiscal or award year described in subparagraph
(A); and the fiscal or award year, as applicable, preceding the fiscal or award year described in subparagraph
(A). Other factors determined to be relevant by the Secretary. A State that receives relief under subsection
(a)or
(b)shall, to the greatest extent practicable, continue to pay its employees of, and contractors with, public institutions of higher education in the State during the period in which the State is receiving such relief. In this section: The term elevated unemployment period — when used with respect to the Nation as a whole, means a consecutive, 3-month period in a fiscal year for which the national average unemployment rate is not less than 0.5 percentage points above the lowest national average unemployment rate for the 12-month period preceding such 3-month period; and when used with respect to a State, means a consecutive, 3-month period in a fiscal year in which the State average unemployment rate is not less than 0.5 percentage points above the lowest State average unemployment rate for such State for the 12-month period preceding such 3-month period. The term qualifying spending requirement , when used with respect to determining whether a State has met such requirement, means the State has not disproportionately decreased spending for any of the categories described in paragraphs
(1)through
(3)of section 788(c) relative to such State’s overall decrease in spending averaged over the 3 consecutive preceding fiscal years. The term national average unemployment rate means the average (seasonally adjusted) rate of total unemployment in all States for a consecutive, 3-month period in a fiscal year, based on data from the Bureau of Labor Statistics of the Department of Labor. The term State average unemployment rate means the average (seasonally adjusted) rate of total unemployment in a State for a consecutive, 3-month period in a fiscal year, based on data from the Bureau of Labor Statistics of the Department of Labor. In this subpart: The term career pathway has the meaning given the term in section 3 of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3102 ). The term community college means— a degree-granting public institution of higher education at which— the highest degree awarded is an associate degree; or an associate degree is the predominant degree awarded; an eligible Tribal College or University; a degree-granting branch campus of a 4-year public institution of higher education, if, at such branch campus— the highest degree awarded is an associate degree; or an associate degree is the predominant degree awarded; or at the designation of the Secretary, in the case of a State that does not operate or control any institution that meets a definition under subparagraph
(A)or (C), a college or similarly defined and structured academic entity— that was in existence on July 1, 2021; within a 4-year public institution of higher education; and at which— the highest degree awarded is an associate degree; or an associate degree is the predominant degree awarded. The term dual or concurrent enrollment program has the meaning given the term in section 8101 of the Elementary and Secondary Education Act of 1965. The term early college high school has the meaning given the term in section 8101 of the Elementary and Secondary Education Act of 1965. The term eligible student means a student who— is enrolled as an undergraduate student in an eligible program (as defined in section 481(b)) at a community college on not less than a half-time basis; in the case of a student who is enrolled in a community college that charges different tuition rates on the basis of in-State or in-district residency, either— qualifies for in-State or in-district resident tuition at such community college; or would qualify for such in-State or in-district resident tuition at such community college, but for the immigration status of such student; has not been enrolled (whether full-time or less than full-time) for more than 6 semesters (or the equivalent) for which the community college tuition and fees of the student were set to $0 pursuant to section 788(a) ; is not enrolled in a dual or concurrent enrollment program or early college high school; and in the case of a student who is a United States citizen, has filed a Free Application for Federal Student Aid described in section 483 for the applicable award year for which the student is enrolled. The term eligible Tribal College or University means— a 2-year Tribal College or University; or a degree-granting Tribal College or University— at which the highest degree awarded is an associate degree; or an associate degree is the predominant degree awarded. The term institution of higher education has the meaning given the term in section 101. The term means-tested Federal benefit program has the meaning given the term in section 479. The term recognized postsecondary credential has the meaning given the term in section 3 of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3102 ). Except as provided in subparagraph
(B), the term State fiscal support for higher education , used with respect to a State for a fiscal year, means an amount that is equal to— the gross amount of applicable State funds appropriated or dedicated, and expended by the State, including funds from lottery receipts, in the fiscal year, that are used to support institutions of higher education and student financial aid for higher education in the State; and any funds described in clause
(ii), if applicable. In the case of a State that includes, as part of the State share under section 786(b)(2)(B) for an award year, funds provided to community colleges by local governments in such State for the purpose of carrying out this subpart, local funds provided to community colleges operated or controlled by such State for operating expenses (excluding capital expenses and research and development costs) shall be included in the calculation of the State fiscal support for higher education for such award year under clause
(i). State fiscal support for higher education for a State for a fiscal year shall not include— funds described in subparagraph
(A)that are returned to the State; State-appropriated funds derived from Federal sources, including funds provided under section 786(a) and section 795A(a)(2); funds that are included in the State share under section 786(b) , including funds included in the State share in accordance with paragraph (2)(A) of such section; amounts that are portions of multiyear appropriations to be distributed over multiple years that are not to be spent for the year for which the calculation under this paragraph is being made, subject to subparagraph
(C); tuition, fees, or other educational charges paid directly by a student to a public institution of higher education or to the State; funds for— financial aid to students attending, or operating expenses of— out-of-State institutions of higher education; proprietary institutions of higher education (as defined in section 102(b)); institutions of higher education not accredited by an agency or association recognized by the Secretary pursuant to section 496; financial aid to students awarded predominantly on the basis of merit, including programs awarded on the basis of predicted or actual academic performance or assessments; research and development; or hospitals, athletics, or other auxiliary enterprises; corporate or other private donations directed to one or more institutions of higher education permitted to be expended by the State; or any other funds that the Secretary determines shall not be included in the calculation of State fiscal support for higher education for such State. The Secretary shall take into consideration any adjustments to the calculations under this paragraph that may be required to accurately reflect State fiscal support for higher education in States with biennial appropriation cycles. The term State fiscal support for higher education per full-time equivalent student , when used with respect to a State for a fiscal year, means the amount that is equal to— the State fiscal support for higher education for the previous fiscal year; divided by the number of full-time equivalent students enrolled in public institutions of higher education in such State for such previous fiscal year. The term Tribal College or University has the meaning given such term in section 316(b)(3). The authority to make grants under this subpart shall expire at the end of award year 2027–2028. Section 422 of the General Education Provisions Act ( 20 U.S.C. 1226a ) shall not apply to this subpart. In addition to amounts otherwise available, there is appropriated for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary, to remain available until September 30, 2030, for carrying out this subpart. .
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Sec. 20021
Grants for Tuition-Free Community College
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