Early Thursday morning the Trump administration released its fiscal year (FY) 2018 budget request, which included significant cuts to certain federal student aid programs, and decreased the Pell Grant Program surplus.
The administration’s first budget request is light on details and known as a “skinny budget,” providing a high-level fiscal blueprint for the administration’s priorities. Overall, President Donald Trump proposed a 13 percent decrease to education spending. The budget also proposed eliminating the Supplemental Educational Opportunity Grant (SEOG) program, removing $4 billion from the Pell Grant surplus – which would not immediately result in a Pell Grant decrease – and significantly decreasing funding for the Federal Work-Study (FWS) program. The proposal also suggested reforming the FWS program to redirect funds to “undergraduate students who would benefit most,” which could imply the elimination of graduate student eligibility for work-study.
All of these reductions would be done in an effort to “focus on streamlining and simplifying funding for college,” according to the budget document. This budget proposal would affect student aid funding for the 2018-19 year.
"Today's budget proposal does not reflect the best approach to solving the nation's fiscal challenges. In fact, this proposal would close the door for countless students around the country who rely on federal student aid programs to pay for college," said NASFAA President Justin Draeger. “NASFAA remains committed to fighting for valuable financial aid dollars that help students who might not otherwise have the opportunity to get to and through college. We call on the Trump administration and Congress to help craft a budget that includes adequate levels of financial support for the nation’s college students, especially those from the lowest income brackets.”
Education Secretary Betsy DeVos said in a statement that the budget plan “keeps with President Trump’s promise to focus the U.S. Department of Education on its mission to serve students.”
“It continues support for the nation’s most vulnerable populations, such as students with disabilities, while streamlining and simplifying funding for college and continuing to help make college education more affordable,” DeVos said. “Taxpayers deserve to know their dollars are being spent efficiently and effectively. This budget is the first step in investing in education programs that work, and maintaining our Department’s focus on supporting states and school districts in providing an equal opportunity for a quality education to all students.”
This budget blueprint only outlines budget priorities for discretionary funding programs, which include SEOG, FWS, and most of Pell Grant funding. Any modifications to student loan programs and the mandatory component of Pell Grant funding will come in a full budget proposal later, perhaps in May or June.
Aside from federal student aid programs, the budget proposal also called for cuts to the federal TRIO programs (10 percent cut) and GEAR UP (32 percent cut), which help low-income and disadvantaged students get to and through college.
For FWS, the budget calls for reducing the program “significantly” and reforming the “poorly-targeted allocation.” The proposal did not provide any details regarding what reducing the program “significantly” would mean. Because of the current “base guarantee” component of the campus-based aid allocation formula, which guarantees funds to institutions at the level of their award year 1999-2000 allocation, a large cut to FWS could have dramatically different implications for different institutions. Based on a NASFAA analysis, FWS funding at a level less than approximately $660 million (a 33 percent cut) would mean institutions would receive—at most—their base guarantee as their total allocation in award year 2018-19, with no funding for the fair share portion. In FY 2016, FWS was funded at $989.7 million.
Democrats were quick to condemn the budget proposal, calling it ill-conceived and irresponsible.
Rep. John Yarmuth (D-KY), ranking member of the House Budget Committee, said in a statement that the impact the budget would have on American families “is abundantly clear.”
“This budget will leave us without the economic and educational investments needed to help families succeed, the resources to protect public health and our environment, and the diplomatic support to keep our country safe,” he said.
Sen. Michael Bennet (D-CO), who sits on the Senate Health, Education, Labor, and Pensions (HELP) Committee, in a statement said the budget “is not a serious proposal to help our country compete in the 21st century economy.”
“Even members of the President's own party have called this dead on arrival,” Bennet said. “The President should abandon this plan and start working with Congress on responsible solutions to reduce our deficit while maintaining important investments in our country.”
But Rep. Virginia Foxx (R-NC), chairwoman of the House Committee on Education and the Workforce, said the budget proposal shows that Trump “intends to keep his promise” to get “our nation’s fiscal house in order.”
“No one will agree with every proposal outlined in this budget, and it is up to Congress to carefully review the details. That is precisely what we will do in the coming weeks,” Foxx said. “We look forward to working with the president to implement fiscally responsible policies that promote economic prosperity, keep workers safe, and help ensure all Americans have access to an excellent education.”
Likewise, Sen. Mike Enzi (R-WY), chairman of the Senate Budget Committee, said the country’s budget and spending challenges require “the attention of this new Administration.”
“I look forward to working with [OMB] Director Mulvaney and the President during the budget process to help Washington become more accountable to hardworking Americans,” he said in a statement. “It is crucial to allocate taxpayer resources efficiently in order to improve and eliminate government programs that are duplicative or not delivering results. This will allow policy makers to support important priorities, while also helping to address the nation's mammoth national debt.”
While the president’s budget is an important marker in the budget process, Congress ultimately controls funding levels through the appropriations process. Before getting to FY 2018, however, Congress must first resolve FY 2017, which affects award year 17-18. A continuing resolution passed in December, which maintains funding at FY 2016 levels, funds the government through April 28 at which point Congress will decide whether to extend the continuing resolution through the end of the fiscal year or decide to put together a new “omnibus” spending package to finish out the year.
For more information on the federal budget and appropriations process, check out NASFAA's Federal Budget and Appropriations page, which features a flowchart that explains the process and also includes recent news.
Publication Date: 3/17/2017