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Category: Student Aid

The Details Are Not Pretty (Part I)

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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  The standard repayment cap would be repealed.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.

 

Education Dept. Considering Financial Aid Changes

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At a conference in Reno, NV the Department of Education revealed that they are considering some significant changes to student financial aid. The first is that they would give colleges the authority to limit how much debt a student takes on. This would be done at “experimental” college sites. They claim this would shift some of the burden from the federal government onto colleges. Additionally, they are proposing changes which would allow debt to be converted into an income-share agreement or other private, third-party mechanism. A student could potentially end up owing a percentage of future earnings to a third-party, rather than directly to the Department of Education. They also want to introduce “incentives” for students who progress quickly through their program. While the specifics are still murky, we will continue to monitor the situation.

With 11 Days To Go…

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Remember the two-year spending agreement that was reached earlier this summer that increased the budget caps for both FY2020 and FY2021? Well, that seems like a distant memory at this point.  When the agreement was reached, there were hopes that the FY2020 appropriations process would turn into a relatively smooth one.  Fast forward to today and we are now 11 days away from the start of FY2020 and none of the 12 spending bills have been signed into law.

To try to prevent another shutdown like the one that marked the beginning of FY2019, the House took up and passed yesterday a continuing resolution (CR) that would keep the government funded through November 21.  The Senate is expected to take it up next week.  There was even uncertainty about the fate of the CR, with the biggest holdup being House Democratic appropriations leadership’s misgivings about adding funds for subsidies to farmers impacted by the tariff fight with China.  Ultimately, enough of the concerns were addressed for floor action and passage.

In the Senate, with the hopes of a quick appropriations process dashed, appropriators are making progress where they can.  The full Appropriations Committee cleared three bills yesterday in a bipartisan manner:  Agriculture, Transportation-Housing, and Financial Services- General Government.  However, significant hurdles remain.  There still are differences between the two sides about the Administration’s attempts to move funds from other bills to build a wall on the Southern border.  Related to the wall push is the Democrats’ unhappiness about the “302(b)” allocations to the subcommittees, especially to the Labor-HHS subcommittee for its bill.  While the Labor-HHS-Education bill and the accompanying report have finally been released, the legislation has not yet moved due to Democratic objections on funding and Republican protests related to abortion policy.

The current version of the Senate Labor-HHS-Education bill would increase funding for NIH by $3 billion.  In addition, while the legislation would increase the Pell Grant maximum to $6,330, it would level fund the majority of the other student financial aid and higher education programs of most interest, including:

  • SEOG:  $840 million
  • Federal Work Study:  $1.1 billion
  • TRIO:  $1.06 billion
  • GEAR-UP:  $360 million
  • GAANN:  $23 million
  • Institute for Education Sciences (IES):  $615 million
  • Title VI International Education programs:  $72 million

The bill would also provide $100 million to federal student loan borrowers who would otherwise be eligible for the Public Service Loan Forgiveness program except for the fact that they unknowingly made payments to ineligible repayment plans.  This amount would be combined with unobligated balances for similar efforts from prior years.

Stay tuned for further updates.

But Will He Sign It?

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Following the Senate’s lead from last week, the House cleared yesterday the massive spending package that combines the annual Labor-HHS-Education and Defense spending bills by a vote of 361-61.  The Senate approved it by a vote of 93 to 7.  The bill also includes a continuing resolution (CR) that would fund through December 7 the other agencies and programs whose funding bills are not signed into law by next Monday.

Earlier this week, there had been some uncertainty about whether the president would actually sign the package because it did not contain the funding his wants for a border wall along the Southern border.  It now appears that he will indeed sign it.

The CR could now apply to a larger number of bills– seven– than originally hoped for.  House and Senate negotiators have spent the last several weeks trying to reach a compromise on a combined package of four more appropriations measures and it remains uncertain at this point whether an agreement can be reached and signed into law before the House recesses on Friday.  Among the bills under discussion are those that would fund the departments of Interior and Agriculture.

More Action Expected on Appropriations

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More action on the FY2019 appropriations front is expected today, with the Senate bringing up for the consideration the second “minibus” of spending bills, which contains the Labor-HHS-Education and Defense measures.  The chamber could pass it by the end of the day today.

In addition, the staff for the House and Senate Appropriations Committees are scheduled to meet today to see if the remaining hurdles in the third minibus can be cleared.  This package contains the Interior, Agriculture, Transportation-Housing, and Financial Services bills.