Congress Establishes FY16 Road Map

By NASFAA Policy & Federal Relations Staff 

On Friday the Senate capped a marathon session of amendment votes by voting 52-46 to pass a budget resolution that proposes to cut $124 billion from student aid programs over the next 10 years. This followed action taken earlier in the week by the House to pass their own budget resolution that likewise took aim at spending on student aid, trimming it by $150 billion over the same 10-year period. In both instances the bulk of these cuts are achieved through the elimination of mandatory spending on Pell Grants (approximately $90 billion) and the elimination of the in-school interest subsidy on student loans (approximately $34 billion). 

NASFAA previously covered the both the House budget resolution and Senate budget resolution when each were first introduced. As a reminder, the passage of the budget resolutions is but an early stage in securing funding for fiscal year 2016. It is now up to the Appropriations Committees in each chamber to write spending bills following the guidelines proposed in these resolutions. For additional details about how this process will continue to unfold, please refer to NASFAA’s interactive Federal Budget Process Tool.

From a policy standpoint, the Senate budget resolution passed with amendments related to a pair of issues that NASFAA has previously advocated for. Both Sen. Susan Collins (R-ME) and Sen. Mazie Hirono (D-HI) introduced and secured the passage of amendments that establish a deficit-neutral reserve fund related to year-round Pell Grants, while Sen. Richard Burr (R-NC) successfully added a measure that would establish a deficit-neutral reserve fund for the purpose of simplifying and streamlining student loan repayment plans. “Deficit-neutral reserve fund” is a term of art that means lawmakers support a policy proposal but don’t currently have a clear path to funding and implementing it; the reserve fund more or less serves as a placeholder.

An additional amendment, while not directly related to the student aid programs, could prove critical to their long-term outlook. By a vote of 50-48 the Senate approved an amendment offered by Sen. Tim Kaine (D-VA) that would lift the sequestration cap in FY16 and FY17 by equal amounts for defense and non-defense discretionary spending (the type of spending that includes education programs). The Senate being on record for not favoring one type of spending over the other will likely be an important bulwark against additional cuts to our programs (most of which are are considered non-defense discretionary) by lawmakers seeking to bring financial relief to programs that rely on defense spending. Joining Democrats in voting to pass this measure were six Republican lawmakers: Sen. Lamar Alexander (R-TN), Sen. Kelly Ayotte (R-NH), Collins, Sen. Bob Corker (R-TN), Sen. Lindsey Graham (R-SC), and Sen. John McCain (R-AZ).

While the suggested cuts to the student aid programs are alarming, it’s important to remember that budget resolutions are policy frameworks designed to provide a roadmap for future appropriations discussions. In other words, their contents do not become the law of the land but instead serve primarily as a marker for each chamber’s fiscal priorities. There are still quite a few steps before they would become official. That being said, these resolutions outline a vision of fiscal austerity that will prove damaging to the student aid programs, and the students and families that rely on them. NASFAA will continue to engage with lawmakers and other stakeholders to impress upon them the importance of shielding these critical programs related to student access and success from the cuts outlined in these budget resolutions.


Publication Date: 3/30/2015

David S | 3/30/2015 11:23:18 AM

I believe that this is in part motivated by the very flawed opinion among many lawmakers that if they reduce federal aid spending, the price of college tuition will come down. It will not happen. No school is going to say "well, with frozen Pell Grants that only 15% of our students receive anyway, and without interest subsidies for undergrad loans, we can't charge this much!"

It will instead result in an increase in private loan borrowing, which is in almost every way bad news for students...but, hmm, maybe good news for private lenders who can get generous with campaign contributions.

Only thing here that doesn't have me reaching for my blood pressure meds is that maybe the sequestration caps could go away. Other than that, this is horrible news and I fear shows where one party fully intends to take things.

Theodore M | 3/30/2015 9:23:55 AM

If, to quote Everett Dirksen, "A billion here, a billion there, pretty soon it adds up to real money." This is very real money.

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