POLITICO Pro reporters on Thursday held the latest in a series of conference calls for subscribers to discuss the fast-developing coronavirus situation.
Pro Health Care’s Adriel Bettelheim and Rachel Roubein discussed how hospitals and other providers fared in the Senate-passed $2 trillion stimulus package, H.R. 748 (116), and how front-line health care workers are coping with a surge of virus cases in an overwhelmed health system. Pro Education’s Jane Norman, Michael Stratford and Nicole Gaudiano led off to discuss the pandemic’s implications for K-12 and higher education and what the stimulus package does to boost shuttered schools, colleges and universities.
Colleges and universities were among the first major institutions to close their doors and curtail their physical operations amid the coronavirus outbreak. Hundreds if not thousands of colleges and universities have shuttered their campuses and moved to online learning as the pandemic spreads across the country. The credit rating agency Moody’s Investors Service downgraded its outlook for the higher education sector from “stable” to “negative” last week — a sign that major financial trouble may be brewing for U.S. colleges and universities.
One big question for public colleges and universities is how state appropriators will respond, Michael notes. Higher education budgets are often among the first line items to be slashed by state lawmakers in tough economic times — as we saw in the last economic recession. If states have the type of drastic drops in tax revenue that economists are expecting, that could have significant consequences for state education funding going forward. New York Gov. Andrew Cuomo, whose state has become the new epicenter of the pandemic in the U.S., has already predicted education cuts in the upcoming state budget.
Higher education would receive $14 billion in the Senate-passed stimulus package — well short of the $50 billion colleges and universities had asked for to help defray expenses such as lost revenue and technology costs related to the transition to distance learning. There’s already talk of additional funding being part of an inevitable “phase four” stimulus package, though the appetite for doling out additional relief funds to higher education remains to be seen.
The stimulus bill would also require the Education Department to postpone all payments on federally held student loans for the next six months. There was a lot of debate over this issue, which had emerged as a sticking point between Republicans and Democrats, who were pushing for up to $10,000 of student loan debt relief per borrower. The bill also includes a new tax break for student loan borrowers whose employers help them pay down their debt, an idea that had been percolating around the Hill for the last couple years.
Elementary and high schools throughout the country have closed their doors to prevent Covid-19 spread, raising the challenge of providing continuity of education for millions of students unable to be physically present in school buildings, Nicole notes.
The stimulus package would send $13.5 billion in formula grants to states to help K-12 schools respond to the virus. Most of the funding would be distributed to local education agencies for expenses related to coordinating long-term school closures and purchasing education technology for online learning and other activities. The bill also provides flexibility for the Education Department to waive standardized testing requirements for the current school year, codifying a move the Trump administration first announced last week.
The stimulus bill does relatively little to address the so-called homework gap — the term used to illustrate the difference between students with access to high-speed internet connections and home computers and those without. Democrats had wanted at least $2 billion to go directly to an FCC subsidy program that helps schools and libraries connect to the internet, while FCC Chairman Ajit Pai requested $50 million for a pilot program geared specifically toward helping schools.
One sticky issue for K-12 is how to adopt distance learning initiatives that are in compliance with the Individuals with Disabilities Education Act, Nicole points out. Some school districts were hesitant to launch distance learning initiatives out of concern they would run afoul of the education law, and there’s been confusion on the guidance coming from the federal government. Secretary Betsy DeVos last weekend provided additional guidance, and the stimulus bill includes a provision that would mandate the secretary within 30 days of passage propose waivers to IDEA that she thinks are needed during the coronavirus emergency. The waivers would be would be designed to provide some limited flexibility for states and local governments to provide distance learning for those with disabilities during the emergency. Look for DeVos to address concerns about distance learning later in the day when she joins the White House coronavirus daily briefing.
Hospitals got a big boost in the Senate-passed economic relief measure, to the tune of the $100 billion the American Hospital Association, American Medical Association and American Nurses Association requested. That was far less than the $225 billion for-profit hospitals said they needed. One area to watch is how the administration will distribute that money, says Rachel, and particularly what portion of it goes to rural hospitals, many of which already were operating on razor-thin margins before the pandemic struck.
The stimulus bill would also provide funding through Nov. 30 for community health centers, which was set to expire in mid-May. That’s on top of $100 million in previously approved funding the Health Resources and Services Administration is directing to the nation’s nearly 1,400 community health centers to help them respond to the pandemic.
Meanwhile, many front-line health workers are worried that hospitals could become disease-spreading vectors given shortages in personal protective gear such as face masks and gowns, as Rachel and Susannah Luthi reported earlier this week. President Donald Trump has invoked the Defense Production Act but has yet to use the law to galvanize private-sector production of medical equipment. The administration earlier this week walked back an announcement that it would formally implement the measure to stock up on vital medical supplies, saying private companies had stepped up.
And what about social distancing? Trump on Thursday teased a plan to reopen parts of the country shuttered by the coronavirus pandemic on a county-by-county basis after earlier in the week drawing skepticism when he said he’d like to “have it open by Easter.” Any efforts by the White House to relax the guidance for social distancing may be undercut by red-state governors, some of whom, like Ohio’s Mike DeWine, have been among the most aggressive with mitigation efforts. Keep an eye out for potential friction between Republican governors and the president.