President Obama's FY2017 Budget Proposal

February 9, 2016

Carrie Warick, Director of Partnerships and Policy

Today, President Obama released his Fiscal Year 2017 budget proposal, which includes the details for $1.1 trillion in discretionary spending agreed upon in last year’s budget agreement. For higher education, his budget includes several beneficial additions to the Pell Grant program, the elimination of unnecessary questions on the FAFSA form, improvements to the campus-based aid allocation (includes Work Study), the InformED initiative to make ED data available, the America’s College Promise, streamlining income driven repayment plans, restored funding for First in the World, the College Opportunity and Bonus program for colleges, and language around the Satisfactory Academic Progress. On the whole, this budget proposal is a tremendous win for low-income students.

Pell Grant Program

For the Pell Grant, there are several positive proposals for low-income students. The budget would increase the maximum Pell Grant to $5935 and tie the Pell Grant program to inflation using mandatory funding beyond 2017. The new programs, Pell for Accelerated Completion and On-Track Pell Bonus, both encourage students to persist on the path to completing their degrees without harming any students using the current Pell Grant. 

The Pell for Accelerated Completion proposal would allow students who take a full time course load (12 credits or more) for two semesters to gain access to additional financial aid dollars to continue their studies for a third semester in the same academic year. For full-time students who only take 12 credits each semester to provide more time to work or care for their families, the ability to use the Pell Grant for additional credits, typically in the summer, will allow these students to stay on track and graduate in four years.

Additionally, the On-Track Pell Bonus, providing $300 to students who take 15 credits a semester, sends the message to students following the traditional academic calendar that 15 credits will keep them on target to graduate on time. While $300 will not be enough to offset the need to work while in school, it sends a positive message about focusing on time to degree and completion. The funds would be awarded at $150 a semester as up front funding (Amy McIntosh, Acting Secretary for Policy, Planning, and Evaluation during Dept of Ed Budget Briefing).

FAFSA Simplification

The language on the FAFSA is as follows: “[T]he Budget proposes eliminating questions related to assets, non-IRS untaxed income, non-IRS income exclusions, and other income adjustments, which have been shown to confuse students.” NCAN supports this further simplification which will build upon the Obama Administration’s legacy of easing access to federal student aid. Reducing the number of questions, particularly those that are complicated and only impact the outcomes for a small percentage of students, would be a welcome addition to the Early FAFSA coming this fall. These eliminations should not be the end of FAFSA simplification, but are another step forward. 

Campus-Based Aid

The budget proposal says it will remove the programs to "ensure funds are allocated to schools that provide a quality education at a reasonable price, particularly to their low-income students." NCAN's policy platform includes changing the campus-based aid formula (Work Study and SEOG) as it currently rewards high-cost institutions who have participated in the programs from the beginning. These are not the institutions where NCAN member students are more likely to attend. Rewarding these funds based on education quality, rather than cost or history, will better serve low income students. 

InformED Initiative

"The budget also includes support for InformED, an initiative launched in 2016, that builds on the success of the new College Scorecard by making the Department’s data and research across the education spectrum more available—and actionable—for internal users and the public. The 2017 budget includes $15 million to support InformED to build new infrastructure to manage the collection, quality, release, and analysis of data in innovative and effective ways." Homeroom Blog NCAN looks forward to continued enhancements to the College Scorecard that allow our members to access data for their tools and advising.

Satisfactory Academic Progress

The language describing the changes to Satisfactory Academic Progress is vague, stating that the budget “will strengthen academic progress requirements in the Pell Grant program in order to encourage students to complete their studies on time, (Appendix p374).” According to Administration officials, the requirements would actually apply to ALL Title IV aid programs, which include SEOG, Federal Work Study, and all student loan programs. The requirement would be that students must complete, either pass or fail, a minimum portion of their credits attempted. The proposal does not include a full time enrollment requirement or a GPA threshold. While NCAN would prefer not to see any changes to SAP, the Administration does not appear to be proposing some of the more worrisome SAP "strengthening" ideas.

Additional Programs

To read more about the America’s College Promise, streamlining income driven repayment plans, new funding for First in the World, and the College Opportunity and Bonus program for colleges, please visit the Department of Education Homeroom blog.


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