President Biden Announces $6 trillion FY 2022 Budget Request

On May 28, 2021, President Biden released his $6 trillion budget request for fiscal year 2022 that details various proposals to advance his administration’s agenda. The budget request includes the American Jobs Plan and the American Families Plan announced earlier this year along with investments in education, research, and health. On education, the budget provides $102.8 billion for the U.S. Department of Education––a 41% increase in the Department’s current spending. Other key proposals affecting education in the President’s budget include:

• Two years of free community college
• Investments to make college more affordable for low-and middle-income students, including students at Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), and minority-serving institutions (MSIs)
• Discretionary funding to increase the maximum Pell Grant by $400 on top of the $1,475 Pell Grant increase proposed in the American Families Plan
• $36.5 billion in funding in Title I grants for under-resourced and high-poverty schools

In addition, the budget outlines revenue raising proposals and changes to the tax code. Fortunately, a proposal to cap the value of the itemized charitable deduction at 28% was not included in the plan. CASE worked closely with the Charitable Giving Coalition leading up to the budget’s release to express concerns around any proposal that would limit the value of the charitable deduction.

As Congress consider the various pieces of the President’s budget, visit the White House FY 2022 budget fact sheet and U.S. Department of the Treasury’s Green Book for more information.

U.S. Innovation and Competition Act Advances in the Senate

On June 8, 2021, Senate lawmakers advanced the U.S. Innovation and Competition Act (S. 1260), formerly titled the Endless Frontier Act, which would allocate more than $250 billion in new funding for research grants while making key changes to Section 117 foreign gift reporting requirements for U.S. colleges and universities.

Section 117 of the Higher Education Act requires U.S. colleges and universities that receive charitable gifts from a foreign source, the value of which is $250,000 or more within a calendar year, to file a disclosure report with the U.S. Department of Education (Department) twice a year. If enacted, S. 1260 would lower the foreign gift reporting threshold to $50,000.

As the legislation is considered in the House chamber, CASE is working to gather data to demonstrate how lowering the reporting threshold would require a significant number of additional U.S. colleges and universities to file reports and significantly increase the administrative burden at institutions currently reporting foreign gifts. Please complete this brief survey to share roughly how many gifts you reported in 2020 with the $250,000 threshold versus what the number would have been with a $50,000 threshold.

For more background on Section 117, the foreign gift disclosure requirement, and other resources, visit CASE’s foreign gift reporting webpage.

CASE Joins Efforts Urging Consideration of Higher Education Tax Priorities

CASE joined the American Council of Education (ACE) and association partners in a letter urging the U.S. House Ways and Means and Senate Finance committees to include various higher education tax priorities, including enhanced charitable giving incentives, in legislation that incorporates the American Jobs Plan and American Families Plan. To help address the unmet needs of students and institutions recovering from the pandemic, the higher education community requested the following tax proposals:  

• Repeal the taxability of scholarship and grant aid, including for Pell Grants
• Enhance tax-exempt financing and expand the Section 179D energy efficient construction tax deduction
• Enhance higher education tax credits
• Enhance charitable giving by expanding and extending the universal charitable deduction
• Repeal the private nonprofit institutional investment income excise tax known as the “endowment tax”
• Expand and modernize employer provided education assistance under Section 127
• Enact Lifelong Learning and Training Accounts (LLTA)
• Repeal the Unrelated Business Income Tax (UBIT) “basketing” provision

In conjunction with the letter, CASE also joined ACE in a meeting with key staff of the Senate Finance and House Ways and Means Committees to discuss the higher education community’s tax priorities.

As Congress considers legislation around the American Jobs and American Families plans, subscribe to the CASE Advocacy Network for the latest news and developments affecting educational advancement.