Federal Relations

February 11, 2020

The Details Are Not Pretty (Part I)

The details of the President’s FY2021 budget requests for various agencies of interest to UW are not pretty.  Let’s start with some of the details related student aid and higher education programs at the Education Department.

Programs Slated for Elimination

  • Federal Supplemental Education Opportunity Grants (FSEOG)– Currently funded at $865 million
  • GEAR UP– Currently funded at $365 million
  • Title VI/ International Education Programs– Currently funded at $76 million
  • Graduate Assistance in Areas of National Need (GAANN)– Currently funded at $23 million.

Other Education Department Proposals

  • The Pell Grant maximum would remain at $6,345.  The proposal seeks to fold the Iraq and Afghanistan Service Grant program into the Pell program.
  • In addition to eliminating the SEOG program, the budget proposals also seeks to cut the Federal Work-Study program from $1.18 billion to $500 million while also changing the allocation formula.
  • The president’s budget calls for turning the various TRIO programs into a single block grant program that would be administered by states.  The proposal calls for the total funds for this new block grant to be cut from $1.09 billion to $950 million.

Student Loans

  • On the loans front, all subsidized loans would be eliminated, meaning all federal student loans would become unsubsidized loans, including undergraduate loans.  The Public Service Loan Forgiveness program would be eliminated as well.
  • The department proposes to consolidate five income-driven repayment (IDR) into a single IDR program, with the repayment rate set at 12.5 percent of discretionary income.  The standard repayment cap would be repealed.  For those borrowers with only undergraduate loan debt, the remaining balance would be forgiven after 180 months of repayment, while those with graduate debt would have their balances forgiven after 30 years of repayment.
  • Loan limits would change under the budget proposal as well.  It calls for Parent PLUS loan limits for undergraduate students to be set at $26,500.  Graduate students would see their annual loan limits capped at $50,000 and the aggregate limits capped at $100,000 under this proposal.
  • In addition, the Administration wants to study the idea of turning the Office of Federal Student Aid into a separate, non-governmental entity.
  • The Administration also wants to explore the concept of requiring “postsecondary institutions that accept taxpayer funds to share in the financial responsibility associated with student loans.”

Institution of Education Sciences

The Administration proposes to cut IES by $58 million below the FY2020 level to $565 million for FY2021.  Within its budget, it is calling for the elimination of both the Regional Education Laboratories and the Statewide Longitudinal Data Systems.