House FY 2027 Budget Proposal Would Cut Campus-Based Aid, Increase Max Pell, and Eliminate Subsidized Loan Funding
By Maria Carrasco, NASFAA Staff Reporter
The House Appropriations Committee on Thursday released its budget proposal for fiscal year (FY) 2027, which would cut funding for the Federal Work-Study (FWS) and Federal Supplemental Educational Opportunity Grant (FSEOG) programs, increase the maximum Pell Grant award by $50, and eliminate funding for subsidized federal student loans, which are only available for undergraduate students.
Specifically, the committee proposed $70.7 billion for the Department of Education (ED), an $8 billion, or 10%, decrease from the FY 2026 enacted level. Additionally, the Pell Grant program would receive $22.7 billion in funding, a $250 million increase from FY 2026. Under this proposed budget, the maximum Pell Grant award would be $7,445, a $50 increase from the FY 2026 maximum award.
Notably, the Trump administration did not call for an increase to the maximum Pell Grant award in its FY 2027 budget request, but did increase funding for the program to address the projected program shortfall. The Congressional Budget Office (CBO) estimates that the Pell Grant program will face a shortfall of nearly $5.5 billion by the end of FY 2026 and an additional $11.5 billion by the end of FY 2027, a total funding gap of nearly $17 billion over both fiscal years. The House Appropriations Committee budget proposal would also address the Pell Grant shortfall, adding about $15 billion in mandatory funding for the program in FY 2027. This additional funding would fill the majority of the funding gap estimated by CBO.
While NASFAA is pleased to see a proposed increase for the maximum Pell Grant award and an influx in funding for the program, investments have not kept up with the rising costs of living, nor has it accounted for the expansion of student eligibility made through the bipartisan FAFSA Simplification Act.
“While this influx of funding is a significant first step toward stabilizing the Pell Grant program, Congress must work to strengthen this investment to preserve student eligibility, maintain award levels, and ensure the program's financial stability — without reducing funding for other vital need-based aid programs,” said Karen McCarthy, NASFAA’s vice president of public policy & federal relations. “NASFAA urges lawmakers to build on this proposal and fully fund the Pell Grant program so students and families can continue to rely on this vital source of financial assistance for years to come.”
Still, other critical student aid programs would face steep cuts under this proposal.
The FSEOG program, for example, would be cut to $546 million, a $364 million decrease from FY 2026, while FWS would be funded at $908 million, a $322 million decrease from FY 2026. Those cuts don’t go quite as far as the Trump administration’s proposed elimination of the FSEOG program and a sharp cut in funding for the FWS program to $123 million, where employers would be required to pay 90% of a student’s hourly wage, significantly up from the traditional 25% share.
The House GOP proposal also includes a provision to eliminate funding for new Direct Subsidized Loans for undergraduate students beginning July 1, 2027, but includes a grandfathering provision that allows certain continuing students to remain eligible. To qualify, a student must be enrolled in a program of study and must have received a Direct Loan for that program prior to July 1, 2027. Eligible students could continue receiving subsidized loans during their expected time to credential.
“These proposed cuts could be devastating for students with the greatest financial need, who may already face fewer financial aid options after changes from the One Big Beautiful Bill Act take effect this summer,” McCarthy said. “Eliminating funding for Direct Subsidized Loans and slashing funding for Federal Work-Study and the Federal Supplemental Educational Opportunity Grant programs would strip away critical support that has a proven track record of helping low-income students access and complete higher education.”
Additionally, the committee proposed increased funding for the federal TRIO programs by $6 million, totaling $1.2 billion, and for the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) by $6 million, totaling $394 million. Notably, the Trump administration proposed to eliminate funding for both programs in its FY 27 budget request.
“At a time when college affordability remains a significant challenge for millions of families, Congress should be investing in proven need-based aid programs, not dismantling them,” McCarthy said. “These proposals would make it harder for many students to earn a degree, increase reliance on more costly borrowing options, and limit educational opportunity.”
House Republicans applauded the proposed budget, including Rep. Robert Aderholt (R-Ala.), chair of the Labor, Health and Human Services, Education, and Related Agencies (Labor-H) Appropriations Subcommittee.
“From groundbreaking medical research and restored focus on core public health to workforce training and educational opportunity, it invests in the people and institutions that strengthen our nation,” Aderholt said in a statement. “At the same time, it eliminates duplicative programs, restores accountability, and ensures taxpayer dollars are directed toward priorities that deliver measurable results.”
However, Rep. Rosa DeLauro (D-Conn.), ranking member of the Labor-H Appropriations Subcommittee, criticized the proposed budget, saying the bill would gut programs that families depend on to make ends meet.
“With every page you turn in this legislation, you find another way Republicans are pushing a decent-wage job, a quality education, or an affordable health insurance plan further out of reach,” DeLauro said in a statement.
The Labor-H Appropriations Subcommittee is set to mark up the legislation on Friday, and the full House Appropriations Committee is scheduled to consider the budget proposal on Tuesday, June 9, during which members are expected to offer several amendments.
The Senate Appropriations Committee has yet to release its FY 2027 budget proposal.
Publication Date: 6/5/2026
Melissa C | 6/5/2026 2:54:00 PM
Wow, fifty whole dollars! What a boon to our neediest students /s
Anthony M | 6/5/2026 12:12:43 PM
Oh, let's not be so cynical, Aesha. They don't hate poor people, they just don't want them to be educated, have health care, or otherwise succeed in life. /s
Aesha E | 6/5/2026 12:0:09 PM
Once again proving how much they hate poor people.
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