News: Federal Policy & Advocacy

Trump FY20 Budget Proposal Calls for Flat Max Pell Award, Slashes Work-Study

Monday, March 11, 2019  
Posted by: Jack Porter, Advocacy Associate
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Today, U.S. Department of Education (ED) officials unveiled the Trump administration’s fiscal year 2020 budget, which – for the third year in a row – calls for spending cuts that would directly affect students served by NCAN members. The proposal would not increase the maximum Pell Grant award and includes a very steep spending reduction for Federal Work-Study (FWS). Moreover, some key financial aid programs would be eliminated if the FY20 request was implemented as written.

Overall, the request would reduce ED’s budget by $8.5 billion, or 12 percent.

The president’s FY20 budget request is merely an outline of the administration’s spending priorities; Congress ultimately has control over the appropriations process. In fact, Congress largely ignored the administration’s FY18 and FY19 budget proposals and increased funding for multiple student aid programs.

The administration’s stance on spending for the Pell Grant and Federal Work-Study stands in stark contrast with the vision outlined in NCAN’s federal policy priorities.

Pell Grant

The Trump budget would maintain the current maximum award of $6,195, while expanding Pell eligibility to short-term programs. Conversely, NCAN’s Pell Grant proposal calls for a 9 percent annual increase to the maximum award over the next decade to restore Pell’s purchasing power back to 50 percent of the average cost of attendance at a four-year public university. Year-round Pell would be sustained under the FY20 proposal, and $1.4 billion would be stripped from the program’s surplus.

Federal Work-Study

The Trump budget would slash Federal Work-Study spending by more than half, from $1.13 billion in FY19 down to $500 million. NCAN has called for increased appropriations for FWS and a funding formula that serves more low-income students.

Other Notable Items for NCAN Members

Several student aid programs would be eliminated under the FY20 proposal. These include:

  • Federal Supplemental Education Opportunity Grant
  • Subsidized Stafford Loans
  • Public Service Loan Forgiveness

The president’s request also calls for GEAR UP to be consolidated under the umbrella of TRIO programs. Furthermore, TRIO’s budget would be cut by 10.3 percent.

The president’s proposal again requests a single Income-Driven Repayment option, under which borrowers would pay 12.5 percent of their income per month. Loan forgiveness would be awarded to undergraduate borrowers after 180 payments and to graduate-level borrowers after 360 payments.

An increase of $133 million for the modernization of services provided to aid recipients – including the Next Generation Financial Services Environment, or “Next Gen” – is also included in the FY20 request. Among other things, this would bolster ED’s efforts to improve the myStudentAid mobile app. NCAN applauds this proposed investment.

For the second year in a row, the administration’s budget rollout also includes an appeal to Congress for increased accountability for colleges and universities. The budget proposal does not include details as to how this would be executed, but the administration indicated it would like institutions to “share a portion of the financial responsibility” with regard to student loan outcomes.

The Departments of Defense and Homeland Security are outliers in a budget that proposes spending cuts virtually across the board, as the Trump administration is seeking to reduce federal spending by $2.7 trillion over the next decade. During the last two budget cycles, disagreements between the White House and the Republican-controlled Congress have led to multiple government shutdowns. Now that Democrats are in the majority in the House of Representatives, it is likely that a long-term budget deal will be even harder to reach.