About

The federal student aid programs have enjoyed bipartisan support for decades. Currently, the federal government provides $140 billion in student loans, grants, and work study each year to help more than 13 million students pay for college.

NAICU has supported federal funding for student aid since its inception in 1976; and the Student Aid Alliance has been successful in turning massive proposed cuts to student aid into program increases since 1994.   

 

Status of FY 2019 Student Aid Funding

 

• President Trump submitted his FY 2019 budget request to Congress on February 12, 2018, before Congress had comleted work on the FY 2018 funding bills.  Much like last year, this budget request proposes deep cuts to student aid funding. The budget proposes to cut $203 billion from the student loan programs over ten years.  For FY 2019, it also proposes to cut $1.6 billion from annual appropriations.  Specifically, the budget proposes the following:
  • Maintaining the $5,920 maximum Pell Grant award, but expanding eligibility to include short-term programs without additional funding.
  • Eliminating Supplemental Educational Opportunity Grants (SEOG).
  • Cutting Federal Work Study funding in half, and restructuring the program to focus on job training rather than financial aid.
  • Keeping TRIO funding, but eliminating GEAR UP and combining its activities into TRIO, which would be distributed by a new state formula grant.
  • Eliminating Graduate Assistance in Areas of National Need (GAANN).  
  • Eliminating subsidized loans (in-school interest subsidy for student loans to low-income students).
  • Eliminating Public Service Loan Forgiveness.
  • Replacing the current repayment programs with one income-driven repayment program.

 

• Congress rejected President Trump's FY 2019 budget request, writing education spending bills that increase student aid funding in June. The Senate bill provides $6,195 for the Pell Grant maximum and maintains funding for the other programs.  The Senate passed the education bill, along with the Defense spending bill, in August hoping to enact all funding bills before the beginning of the fiscal year on October 1. The House bill provides $6,095 for the Pell Grant maximum, increases TRIO and GEAR UP, and maintains funding for SEOG and work study.  The House will need to act on the bill in September to avoid a pre-election government shutdown. 

Status of FY 2018 Appropriations

 

• After five continuing resolutions, and six months into the fiscal year, a final omnibus spending package was enacted March 23, with significant funding increases for the student aid programs, except GAANN.  A generous increase in the Pell Grant maximum, and historic increases in campus-based aid after a prolonged budget battle, is a great victory for low-income students. This funding is available to students starting July 1, 2018:
  • Pell Grant maximum increased $175, to $6,095
  • SEOG increased $107 million, to $840 million
  • FWS increased $140 million to $1.13 billion
  • TRIO increased $60 million to $1.01 billion
  • GEAR UP increased $10 million to $350 million
  • GAANN was cut $5 million for a total of $23 million in funding.

 

• The February 9 two-year budget deal that set the stage for the final spending package also included increased statutory spending caps for defense and nondefense spending, and extended the debt ceiling suspension until March 2019.