NAICU Washington Update

Student Aid Funding Bills Advance on Capitol Hill

June 29, 2018

Both the House of Representatives and Senate have been active in recent weeks on moving legislation that would significantly impact student aid funding.  This includes action in both chambers on appropriations, and House activity on the FY 2019 budget.

Student Aid Appropriations
Following the two-year bipartisan budget deal enacted in February, House and Senate Appropriations Committees are on track to write all 12 spending bills before the August recess, with the hopes of final passage before the beginning of the fiscal year on October 1. Many things could happen to derail the trajectory, but the Senate took an important first step to keep things on track by adhering to a gentleman’s agreement to keep partisan riders off the bills and only work on spending issues.

In the Senate, the Labor-HHS-Education bill provides a $100 increase, to $6,195, for the Pell Grant maximum.  Additionally, the bill maintains the FY 2018 increases from the FY 2018 omnibus bill for Supplemental Educational Opportunity Grants (SEOG), Federal Work Study (FWS), TRIO, and GEAR UP.  The Senate bill also includes a provision allowing borrowers to change their repayment plan to benefit from Public Service Loan Forgiveness (PSLF). The bipartisan, cooperative tenor of the committee meetings kept the debate focused on funding.  Chairman Richard Shelby (R-AL) would like to combine the Labor-HHS-Education bill with the Defense spending bill to incentivize continued bipartisan support.

The House subcommittee bill maintains the Pell Grant maximum at $6,090, and level funding for SEOG, FWS and Graduate Assistance in Areas of National Need (GAANN).  TRIO received an increase of $50 million, for a program funding level of $1.06 billion.  The House provided an additional $10 million for GEAR UP, bringing that program’s funding level to $360 million.  Full Committee markup has been delayed until after the July 4th recess. However, the House bills carry the partisan policy riders the Senate has avoided.  

Budget Resolution
Meanwhile, the House Budget Committee endorsed a FY 2019 budget resolution that closely reflects the president’s budget request, but is not expected to go any further in the legislative process.  The budget resolution, which is usually the first step of the process before appropriations bills are written, proposes to substantially lower non-defense discretionary spending starting in FY 2020.  This move could result in dramatic future cuts to student aid programs. 

The resolution also calls for reconciliation instructions to find $230 billion in savings over 10 years from the education committee, which likely translates into cuts to the student loan programs.  The illustrative examples to find savings include the elimination of subsidized loans, public service loan forgiveness, and all mandatory Pell Grant funding.  Many of those proposals closely align with the House Education Committee’s proposals for the reauthorization of the Higher Education Act.  House leadership is not expected to bring the resolution to the floor for a vote and the Senate is not expected to address a budget resolution this year.

The Senate let the clock run out on the package of rescissions submitted by the Trump Administration in May.  Conservatives, unhappy with the bipartisan budget deal that increased spending caps, encouraged the Administration to ask for targeted cuts after the president said he would never sign another spending bill of that size.  While the original proposal would have cut up to $65 billion in just-enacted FY 2018 program funding, the legislative proposal ultimately submitted was for a $15 billion cut from unobligated funds from previous fiscal years. Congressional inaction on the proposal after 45 days killed the request to cut funding.

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