Washington Update: Details of the Appropriations and Tax Extenders Bills Signed Into Law Last Month

On December 18, 2015, President Obama signed a Fiscal Year 2016 omnibus appropriations bill into law that increases investments in research and student aid, a tax extenders measure that makes permanent certain tax benefits for students and universities and the extension of the Perkins Loan program. Below you will find a brief summary of both measures with links for additional information.

FY2016 Omnibus Appropriations Bill

For education/student aid programs, the measure:

• Ensures the maximum Pell grant award will increase by $140 to $5,915 in the 2016-2017 school year while not dipping into the Pell surplus.
• Increases TRIO by $60 million to $900 million (a 7.1% increase over FY15)
• Increases GEARUP by $21 million to $323 million (7%)

For research, the measure:

• Increases funding for NIH by $2 billion to $32.1 billion (a 6.5% increase over FY15) — the largest single increase for the agency in over a decade.
• Increases funding for the Agriculture and Food Research Initiative by $25 million to $350 million (7.7%)
• Increases funding for the Department of Energy Office of Science by $279 million to $5.35 billion (5.5%)
• Increases funding for NSF by $119 million to $7.46 billion (1.6%)

Important programs that were cut in either or both the House and Senate bills earlier this year, such as the Graduate Assistance in Areas of National Need, the Supplemental Educational Opportunity Grant, the Institute of Education Sciences, Title VI International Education, and Health Resources Services Administration Health Professions are fully restored to Fiscal Year 2015 levels. The First in the World Program ultimately did not receive any funding.

The bill also significantly increases the opportunities for U.S. universities to partner and help develop institutions of higher education in developing countries and supports the global food security research at U.S. universities through the Feed the Future Innovation Labs. APLU’s International Advocacy Coordinating Committee actively worked to build critical support on Capitol Hill for these programs.

A more complete summary of the FY2016 omnibus appropriations bill can be found here.

Tax Extenders Bill

The tax extenders bill addresses several provisions that were set to expire in 2017. The measure costs more than $650 billion over the next ten years. Among the highlights included in the measure:

• Makes permanent the American Opportunity Tax Credit that provides low and middle-income families with an annual tax credit of up to $2,500 per student for college expenses.
• Makes permanent the IRA charitable rollover tax deduction that will facilitate greater philanthropic contributions to universities.
• Makes permanent the R&D tax credit, which benefits U.S. industries seeking to conduct applied research and development activities, often building upon the scientific knowledge gained through the basic research performed at our institutions.
• Extends the tuition and expenses deduction through 2016.
• Reforms 1098-T reporting requirements so institutions report only qualified tuition and related expenses paid by students rather than choosing either amounts paid or amounts billed. Some institutions have concerns that this is a very difficult administrative burden.

The full tax extenders measure can be read here.

Perkins Loan Extension

One more pertinent action Congress took last month was to pass legislation under unanimous consent, which extends the Perkins Loan program for two years. Authorization for this campus-based aid program expired at the end of September. The details of the extension bill are not ideal, as it limits graduate student participation and mandates that new Perkins recipients exhaust unsubsidized Stafford loans before taking Perkins. However, enactment keeps the program alive and will allow Congress to more thoroughly consider the Perkins Loan program in the context of the Higher Education Act, which is the appropriate vehicle. APLU will advocate for restoring graduate student eligibility and fixing other problems in the reauthorization of the Higher Education Act.