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President’s Budget Proposes Deep Cuts To Education

Jun 06th, 2017

The Higher Education Act Reauthorization is still on hold while Congress deals with issues like health care and confirmation hearings for members of administrative agencies. While health care may be under discussion in the Senate after passing the House, little progress has been made to staff the Department of Education. In fact, to date, the Administration has not made a single request for a Senate appointment at the Department of Education other than Secretary DeVos. All other positions that are Senate confirmable have either remained vacant or are operating with an “acting” administrator.

However, there has been a lot of discussion in recent weeks about the higher education impact of President Trump’s prosed FY2018 budget that was introduced in mid-May. The Budget, touted by the Administration as the “Taxpayer First” budget, is a good indication of where the President’s priorities fall. In the words of the Administration, “President Trump’s first proposed budget shows respect for the people who pay the bills.” Overall, the budget calls for large cuts to safety net programs and domestic spending, which includes a 13.5% cut (over $9.2 billion) to Department of Education programs, and a large increase in defense spending.

Secretary of Education Betsy DeVos testified before the House Appropriations Labor and Health and Human Services subcommittee that cuts to higher education were intended to “reduce the complexity of funding for college while prioritizing efforts to help make a college education affordable for low-income students.” And remain “consistent with the Department’s commitment to improve the efficiency of the federal government by eliminating or phasing out 22 programs that are duplicative, ineffective, or are better supported through state, local, or private efforts.”

The most significant of these changes to the higher education community include:

  1. Cuts to TRIO college access programs, including the complete elimination of Education Opportunity Centers and the McNair Program, and a 33% cut to the GEAR UP program. These programs aim to create opportunities for thousands of low-income students to access higher education and succeed in college once enrolled. Cuts to these programs would mean far fewer students receiving support services. Secretary DeVos believes that some of these services are duplicative or are no longer meeting their intended goals.
  2. Eliminates the Federal Supplemental Educational Opportunity Grant (SEOG) program. This grant goes to low-income students and, according to New America Foundation analysis, of the current recipients of SEOG “71 percent of dependent undergraduate recipients [are] from families making less than $30,000 per year and 76 percent of independent recipients earning less than $20,000.” Elimination of this grant would create significant funding gaps for low-income students trying to access or complete higher education. Secretary DeVos believes these funds are “poorly targeted.”
  3. Allows the Perkins Loan Program to expire. This program allows colleges to make loans with federal dollars to certain students. It is set to expire if Congress does not act on an extension, and the budget allocates no money for its continuation. Many members of Congress have long advocated for the elimination of this loan program as a means of “streamlining” all federal loans into one program.
  4. Cuts Career and Technical Education block grant funding by 15%. These grants go to technical high schools and community colleges to provide vital career training. A cut in funding would mean fewer opportunities to train students in areas in need of workforce training. Secretary DeVos also believes these funds are “poorly targeted.”
  5. Eliminates the federal subsidies on undergraduate Stafford loans. Currently, students who qualify based on financial need are entitled to take out federal Stafford loans that do not accrue interest while they are enrolled. The budget would eliminate this subsidy, starting the clock on interest accrual at the time the loan is taken out and making it more expensive for student to borrow. This is a cost-cutting measure that would save the federal government $40 billion over a decade.
  6. Cuts Federal Work-Study funding by nearly 50%. Work-study funding has been seen as an important tool to allow many students to fund their education for decades. While the funding disproportionally goes to private non-profit colleges, studies show work-study recipients are much more likely to graduate and be employed after graduation. The budget would make fewer of these work-study opportunities available by cutting federal funding in half. The Department currently believes this is a “poorly targeted allocation of funds.”
  7. Eliminates the Public Service Loan Forgiveness Program. Despite the fact that the Public Service Loan Forgiveness program has not yet begun to forgive loans and there is no data on its effectiveness, this program, which allows those in qualified fields to have the balance of federal loans forgiven after 120 payments, has been targeted for elimination.
  8. Streamlines income-based repayment options by creating one new program. The new program would forgive federal loans after 15 years, rather than 20 years, for undergraduate students but would increase the amount that must be paid from 10% to 12.5% of discretionary income.
  9. Maintains level funding for Pell Grants, but pulls nearly $3.9 billion out of the Pell trust fund, and does not allow the Pell grant to be indexed for inflation.
  10. Maintains level funding for Historically Black Colleges and Minority Serving Institutions. While the budget does not cut funding to HBCUs, these institutions were hoping for a funding increase which was not included in the budget proposal.

Despite the stark cuts to some programs, it is important to remember that this is merely a proposal. A presidential budget is a general wish list the administration puts forward of priorities for the administrative agencies in the coming year. This document has no legal weight until it is approved by Congress. The president’s full budget recommendations will go to both the Budget and the Appropriations Committees and ultimately the full Congress. As is often said with presidential budgets, just as quickly as the president proposes a budget, the Congress disposes of that budget. Congress has the power of the purse, and ultimately, the Budget and Appropriations Committees will draft their own budget and it will look drastically different from the president’s proposal. The Appropriations Committee will begin work in earnest in the next few months to put a budget together that is palatable to a majority of members of Congress, with the goal of having it passed by the end of September. If they fail to meet that timeline, a Continuing Resolution will have to be passed to keep the federal government running for the start of the next federal fiscal year on October 1.

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