Statement on House Fiscal Year 2027 Budget Proposal
FOR IMMEDIATE RELEASE
Contact: Allie Arcese
Sr. Director, Strategic Communications
[email protected]
WASHINGTON, D.C., JUNE 4, 2026 — 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, FSEOG 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. The 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.
The budget proposal also aims to address the projected Pell Grant shortfall, adding about $15 billion in mandatory funding for the program in FY 2027, which would fill the majority of the funding gap estimated by the Congressional Budget Office.
In response to this news, Karen McCarthy, NASFAA Vice President of Public Policy and Federal Relations, released the following statement:
“We are pleased to see a proposed increase for the maximum Pell Grant award and an influx of funding for the program, especially as Congress has expanded eligibility for low-income students through the bipartisan FAFSA Simplification Act. However, investment in the Pell Grant program has not kept pace with the rising cost of living, nor has it accounted for the expansion of student eligibility, resulting in a decline in the grant’s purchasing power and a massive projected shortfall in the coming years, respectively.
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. 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.
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.
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.
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. These proposals would make it harder for many students to earn a degree, increase reliance on more costly borrowing options, and limit educational opportunity.”
NASFAA policy experts are available to speak to members of the media about the House of Representatives’ fiscal year 2027 budget proposal. To set up an interview, please email [email protected].
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About NASFAA
The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents more than 29,000 financial aid professionals at approximately 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every 10 undergraduates in the U.S. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators.
Publication Date: 6/4/2026