Every Postsecondary Student Aid Dollar Counts: Reject the President's Cuts

March 16, 2017

By Carrie Warick, Director of Policy and Advocacy

President Donald Trump’s first federal budget proposal requests $59 billion in discretionary funding for the U.S. Department of Education (ED), a cut of $9 billion or 13 percent. It calls for refocusing ED’s mission on K-12 schools and “streamlining and simplifying funding for college, while continuing to help make college education more affordable.” NCAN strongly supports streamlining and simplification, but the president proposes to achieve simplification by eliminating vital programs that serve low-income students, not by reorganizing dollars to better fit their needs. 

This budget proposal includes several elements that will harm low-income students directly through less funding or indirectly by limiting funding to the services complementary to need-based financial aid. The proposal:

  • Moves $3.9 billion – almost 10 percent of funding – out of the Pell Grant program (without specifying whether it will retain the maximum Pell Grant amount at $5,920 for academic year 2018-19).
  • Eliminates the Supplemental Educational Opportunity Grant (SEOG) program without moving those dollars to another type of financial aid.
  • “Reduces Federal Work-Study significantly,” without specifying an amount. 
  • Cuts federal TRIO programs by about 10 percent and GEAR UP programs by nearly one-third, allowing GEAR UP to fund continuation grants only until the completion of a rigorous evaluation.
  • Eliminates the AmeriCorps program, which dozens of NCAN members use to support their students.

The president will release a more detailed budget proposal in May, when we should learn whether he is calling for maintaining the maximum Pell Grant at $5,920 and freezing it at that amount in subsequent years. 

The president’s budget request is just that: a request. It is not binding. It is up to Congress to pass appropriations bills into law, and Congress must reject these cuts in order to maintain the promise of need-based federal student aid for current and future students. Without continued support, postsecondary enrollment and completion rates for U.S. students will stagnate or even decline at a time when the United States has already fallen to 11th in the world in postsecondary attainment for adults ages 25-34, threatening our economic growth. Federal student aid, including the work-study program and SEOG, is not a burden in need of reduction, but a smart investment in the U.S. economy.

One-third of today’s undergraduate students — at both four-year and two-year institutions — come from low-income families poor enough to receive a federal Pell Grant. These 8 million students are already far less likely to enroll in and complete postsecondary education. Eighty-three percent of Pell Grant students come from families earning under $40,000 annually — those among the approximately 40 percent of lowest-U.S. earners. In fact, nearly all of the 2 million students served annually by NCAN members are eligible to receive Pell Grants as a vital part of their higher education funding. At a time when the purchasing power of the Pell Grant is at its lowest point in the program’s history, Congress should not divert billions of dollars from the program as the president proposes. In fact, Congress should invest that $3.9 billion by reinstating the bipartisan-supported year-round Pell program and extending the annual increases to the maximum Pell Grant award, with no reductions in student eligibility. 

Additionally, no dollar of need-based financial aid should be considered small enough to eliminate. When deciding whether to enroll — or remain enrolled — every single dollar counts for low-income students. As recent studies have shown, as little as $300 can keep a student from dropping out. The College Board's 2016 Trends in Student Aid reports that the SEOG program provides an average of $450 to 1.6 million students and that 632,000 students earn an average of $1,550 through federal work-study. Many rely on these dollars for basic needs like food and shelter. By cutting these grants, Congress will ensure that millions of students drop out or skip postsecondary education entirely. It’s true that both programs could be amended to better target the very poorest students, but neither program should be cut. And the federal work-study program, in particular, should be expanded because it is proven to increase degree completion and employment after graduation. 

Just as they rely on financial aid, low-income students often won’t enroll in or complete higher education without the help of college access and success programs — many of which rely on AmeriCorps volunteers to provide services — as well as GEAR UP and TRIO programs. NCAN’s annual Benchmarking Project shows that students served by college access and success programs can and do achieve better postsecondary outcomes than average low-income students. Without these crucial support programs, more students will fail to enroll in and complete postsecondary education.

Overall U.S. postsecondary completion rates are creeping forward slowly, but too slowly to fill labor market needs and stay competitive internationally, and significant completion gaps remain for low-income students and students of color. Cutting any amount of need-based financial aid will put us even further behind and contribute to future economic stagnation, not growth. Congress already gives more in tax deductions, primarily to higher-income families, than it spends on the need-based Pell Grant program. We cannot cut federal need-based aid without doing serious damage to this nation’s long-term prosperity.

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