Federal Budget and Appropriations Positions

NASFAA supports funding for all student aid programs, including Pell Grants, Federal Supplemental Educational Grants (FSEOG), Federal Work Study (FWS), TRIO programs, and GEAR UP to authorized levels. Additional funding-oriented recommendations can be found below.

Federal Pell Grant Program

  • Double the maximum Pell Grant.
    The time has come for Congress to make a substantial investment in the program by doubling the maximum Pell Grant, a proposal that is enthusiastically supported by many in the higher education community. The current maximum is increasingly insufficient to move the needle on college access, leaving low-income students to borrow high amounts or, worse yet, not attend postsecondary education at all. Doubling the maximum Pell Grant will provide myriad benefits not only to our nation’s lowest-income students, but also to the federal government and broader society.
  • Make Pell a true entitlement and reinstate the Pell Grant’s automatic inflation adjustment.
    The Federal Pell Grant should be a true entitlement with 100% mandatory funding. To deliver the  sustained and certain annual increases needed to ensure the grant maintains its purchasing power, Congress should also reinstate an automatic inflation adjustment to the maximum award.
  • The Pell surplus should only be used to fund the Pell Grant.
    Continue certainty in the Federal Pell Grant Program's financial health by avoiding drawing down dollars from the current Pell Grant surplus to fund other federal programs.

Campus-Based Aid Programs

  • Bolster investment in the campus-based aid programs.
    In a period of financial austerity, the Federal Supplemental Educational Opportunity Grant (FSEOG) and Federal Work-Study (FWS) programs stretch the federal dollar further in support of the neediest students. Congress should ensure the programs receive the consistent annual funding increases needed to expand their impact to our nation’s lowest-income students.
  • Revise the campus-based aid allocation formula.
    Due to the antiquated design of the funding formula, today’s allocation of campus-based aid largely reflects a 40-year-old distribution of funds, in which institutions receive a “base guarantee” of funding. Growing schools that are serving needier student populations cannot increase their funding because other institutions’ funding levels are largely protected, regardless of institutional need. NASFAA recommends phasing out the base guarantee portion of the allocation formula over 10 years; thus, allocations would be based only on a “fair share” formula.

William D. Ford Federal Direct Loan Program

  • Eliminate student loan origination fees.
    Origination fees withhold a portion of a student’s proceeds while still requiring repayment with accrued interest of the full loan amount before the deduction of fees. Congress should eliminate loan origination fees altogether to make more transparent borrowers’ true loan costs and eliminate unnecessary confusion.
  • Restore graduate and professional student eligibility for subsidized loans.
    Congress should continue to fund in-school interest subsidies for undergraduate students and restore subsidized loan eligibility for graduate students.

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