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  • December9th

    Next Steps from the Student Aid Alliance

    Posted in: Legislation & Analysis

    Thanks to all of our supporters for telling the Super Committee that Washington should not balance the budget on the backs of students. All told, more than 100,000 people signed the statement of support we delivered to the committee in November.  But even though the Super Committee threw in the towel, as advocates for student aid we still have work to do.

    Right now, Congress is considering cuts to these crucial programs, including Pell Grants, in next year’s budget. There is still time to convince them otherwise, and there are a number of ways you can make that message heard.

    Spread the word, share the statement of support with your friends, co-workers, peers, and ask them to sign the statement. There’s strength in numbers, so let others know through email, Facebook and Twitter that the student aid programs need your help.

    You can send an email right now to your senators and representative telling them why student aid is important to you. Elected officials listen to their constituents, so let them know where you stand. Use the Toolkit to help plan press events and public activities to draw attention to the importance of student aid to people on your campus or in your community.

    You can share your story online through the Student Aid Alliance webpage. The more personal stories they hear, the better our chance of Saving Student Aid.

    We appreciate your ongoing support—your simple actions will resonate on Capitol Hill and will ultimately allow millions of students to have access to higher education.

  • October21st

    House Releases Student Aid Spending Plan

    Posted in: Legislation & Analysis

    Preliminary proposals for next year’s student aid funding levels have emerged from both the House and Senate, while the “Super Committee” will be looking at both the Pell Grant and student loan programs.

    House Appropriators Set Marker

    In an unexpected move on September 30, the House Appropriations Committee released a draft of its FY 2012 Labor-HHS-Education spending bill. Its release was a surprise because, after twice cancelling scheduled meetings, the subcommittee still hasn’t held a mark-up.

    The House bill differs from the Senate approach. It preserves the interest-free grace period for low-income students’ loans, and instead reducing eligibility for the Pell Grant program by modifying various eligibility criteria. The draft bill eliminates funding for Javits graduate education, but does maintain the $5,550 maximum Pell grant, along with level funding for SEOG, Federal Work Study, TRIO, GEAR UP, and GAANN. Substantial cuts are proposed for many other education programs, including support for minority-serving institutions and international education. The House draft also bans any funds from being used to implement the gainful employment, state authorization, and definition of credit hour regulations.

    In choosing to trim Pell rather than loans, the House Appropriations Committee makes clear its concern about the recent increased cost and expansion in the Pell Grant program. Specifically, the draft would:

    • Eliminate less-than-half-time students.
    • Immediately lower the lifetime limit from 18 to 12 semesters (pro-rated for part-time students).
    • Reduce the income protection allowance for all categories except parents of dependents, making them more equitable.
    • Lower the income amount for automatic-zero-EFC to $15,000.
    • Eliminate approximately half of the students who currently receive the minimum Pell Grant.
    • Add sources of untaxed income to those that determine EFC: child tax credit, welfare benefits, EITC, foreign income excluded from federal tax, untaxed social security benefits and special fuels tax credit.
    • Eliminate ability-to-benefit students, but not home-schooled or GED students.
    • Allow the Secretary of Education to ratably reduce the Pell Grant maximum should funding from Congress be insufficient to cover the grants.

    According to the Department of Education, these proposed changes would cut $4.3 billion from the Pell Grant program by removing 554,320 students from the program, and lowering the average grant by $240.

    Senate Funding

    While Super Committee speculation makes the headlines, the funding committees in Congress are moving ahead with proposals for FY 2012 spending levels. First out of the box was the Senate Appropriations Subcommittee, which approved its bill on September 21. The good news is that the subcommittee kept the Pell Grant maximum at $5,550 for the 2012-13 academic year without cutting any students out of the program, and level funded all student aid programs. The Senate bill also level funds strengthening institutions and international education programs.

    The bad news is that the Pell funding was built on eliminating the six-month interest-free grace period following graduation for low-income student borrowers. This continues a disturbing trend set by the decision in July to eliminate the in-school interest-free policy for low-income graduate students.

    In the report language, the committee explains its decision process: “The Committee makes this change reluctantly, but believes it is preferable to reducing the maximum Pell Grant award. In addition, interest subsidies are poorly targeted because they are based on a student’s family’s income upon entering school and not on the student’s ability to repay loans after leaving school . . . The subsidies also do not necessarily go to the neediest students. In 2008, 40 percent of subsidized loan recipients were dependent students from families with annual incomes above $60,000, and 31 percent of subsidized loan recipients were independent students with annual incomes over $30,000.”

    Also in the report language is a request that the Department of Education “report on the impact that the elimination of the LEAP program has had on the total amount of need-based grant aid available to low- and moderate-income students in the 2011-12 academic year. The report should be submitted to the Committee by August 1, 2012.” Funding for the LEAP program was eliminated in the FY 2011 bill.

    Super Committee

    The Joint Select Committee on Deficit Reduction (aka “Super Committee”) has everyone in Washington wondering whether the bipartisan group of twelve lawmakers will be able to develop a big plan to reduce the deficit by November 23. A leaked document from the committee has confirmed assumptions that the committee would review all programs with automatic funding, including both student loans and Pell Grants. “Review” does not necessarily mean cuts, but student aid advocates are particularly concerned about preserving both the in-school interest subsidy for low-income students in the loan program and the mandatory Pell Grant increase from the Student Aid Fiscal Responsibility Act, as well as maintaining eligibility for current recipients. How the House and Senate reconcile their differences on the future of the Pell Grant program, how the Department’s updated Pell estimates influence the debate, and how the Super Committee treats higher education will play out over the next three months.

  • September26th

    Senate Appropriators Cut In-School Interest to Keep $5,550 Pell

    Posted in: Legislation & Analysis

    The Senate Appropriations Committee approved its FY 2012 Labor-HHS-Education
    spending bill on Sept. 21, maintaining the SEOG and Federal Work-Study student
    aid programs at last year’s levels. The committee also funded a maximum Pell
    Grant of $5,500.

    The Pell Grant program needed an additional $1.3 billion (on top of the $23 billion
    baseline and the $9 billion from the Budget Control Act this summer) to
    maintain the $5,550 maximum grant this year. To pay for that increase, the
    committee decided to start charging low-income undergraduate students interest
    on their subsidized student loans as soon as they leave school, for the first
    time since the student loan program was enacted in 1965. The change is
    effective July 1, 2012.

    Currently, low-income students are given a six-month interest-free grace period after they
    graduate. The committee’s cut comes less than two months after the in-school
    interest subsidy for graduate student borrowers was eliminated in the Budget
    Control Act.

    With a subcommittee allocation of $157 billion ($308 million below last year), the
    committee faced difficult decisions to maintain as much education, health, and
    research funding as possible. Subcommittee Chairman Tom Harkin (D-Iowa) likened
    the process to “cutting beyond the fat and muscle to the bone
    marrow,” and noted that they had to eliminate 15 programs, which was
    “painful and unpopular.” Ranking Member Richard Shelby (R-Ala.)
    opposed the bill because of the spending for the Affordable Health Care Act,
    and for continuing Pell Grant funding on an unsustainable path.

    The committee considered tightening eligibility rules for Pell Grants instead, but
    did not want to kick any students out of the program.

    While it is a relief that Pell is maintained at $5,550, and that SEOG, Federal
    Work-Study, TRIO, and GEAR UP are protected and level-funded, it is of great
    concern that important federal loan benefits for low-income students are being
    eliminated.

    Next Steps

    The House Appropriations Committee has twice cancelled mark-ups because
    subcommittee members have not agreed on the draft bill. As the Student Aid
    Alliance understands it, the dispute is related to the increased spending for
    the bill provided in this summer’s Budget Control Act. The Alliance is not
    aware of student aid provisions in the House bill, but knows committee members
    face the same difficult choices as Senate appropriators. It is expected the
    education bill will not see further action until the House and Senate
    leadership begin working on an omnibus bill.

  • August1st

    Statement by the Student Aid Alliance on Debt Ceiling Deal

    Posted in: Legislation & Analysis, News Releases

    As students and educators, our members understand the necessity of raising the debt ceiling in order to pay the bills the nation has incurred and preserve our standing as a leader among nations of the world. We commend the president and both political parties for reaching an agreement that provides $17 billion in funding to maintain the critical Pell Grant Program. Such support is vital to ensuring that talented and deserving students will have the means to earn their degrees.

    However, this deal comes at real cost to other students. The elimination of the in-school interest exemption for graduate and professional students and on-time repayment incentives for student borrowers will result in college becoming more expensive for millions of students and their families.

    Moreover, in combination with other recent legislation, there is a clear pattern of an assault on the core student aid programs that looks to continue into next year. Already this year we have seen:

    • The elimination of year-round Pell Grants;

    • The elimination of the Leveraging Educational Assistance Partnership (LEAP) Program;

    • The elimination of the in-school interest exemption for graduate and professional students;

    • The elimination of on-time repayment incentives for student borrowers;

    • Funding cuts to the TRIO Programs, GEAR UP, Supplemental Educational Opportunity Grant (SEOG) Program and graduate education programs

    These cuts amount to more than $30 billion that has been taken out of the pockets of cash-strapped college students even before the FY 2012 appropriations process is finalized. Since the caps on discretionary spending for FY 2012 will be $7 billion lower than FY 2011 and the FY 2013 levels will be $3 billion lower than FY 2011, we know there will be more attempts to raid student aid programs going forward.

    With widespread recognition that our nation sorely needs to power up its economic engine, it is more important than ever to preserve and provide adequate funding for the array of federal student aid programs that offer today’s students an opportunity to acquire the knowledge and skills that the nation requires. Work force projections forecast that by 2018, there will be jobs for as many as 2.2 million new workers with college degrees, but on our current trajectory, there will be a shortage of 3 million workers who need an associate’s degree or higher. In addition, about 2.5 million new jobs will require an advanced degree.

    Congress and the administration should not attempt to balance the budget on the backs of students.

  • July26th

    House and Senate Budget Proposals Would Protect Pell Grants

    Posted in: Legislation & Analysis

    This morning House Speaker Boehner and Senate Majority Leader Reid released detailed budget plans that both protect and fund the Pell Grant program. Both bills are called the “Budget Control Act of 2011.”

    Both chambers expect to consider these bills on their floors before the end of the week.

    The proposals protect and fund the Pell program, without completely decimating appropriations available for the other student aid programs.

    The House plan provides an additional $17 billion in mandatory funding over the next two years, while the Senate provides $18 billion. Both reach these increases by eliminating the in-school interest on student loans for graduate and professional students.

    In addition:

    – Both plans cut discretionary spending by $1.2 trillion now, but it is unclear what the breakdown is between defense and non-defense caps.

    – On the debt ceiling, the House would raise it by $1 trillion now, getting the government through February of 2012, while the Senate bill raises it by $2.4 trillion, getting through all of 2012.

    – Both bills call for 10-year spending caps and a joint congressional committee to report out a deficit reduction plan by the end of the year. The House has stricter enforcement mechanisms than the Senate, and calls for both chambers to vote on a balanced budget constitutional amendment by October 1, 2011.

    We’ll keep you updated as things move this week!

     

     

     

  • July21st

    Senators Urge Obama to Protect Pell Grants in Deficit Reduction Deal

    Posted in: Legislation & Analysis

    In a letter to President Obama, senators called for Pell Grants to be protected in any deficit reduction deal. The letter urged the president to “reject any proposals that reduce the Pell Grant maximum or make harmful changes to Pell’s elibility requirements.”

    Furthermore,

    We recognize that hard choices need to be made to address the nation’s debt crisis. However, cuts to the Pell Grant program would undermine our efforts to address our debt in the long run by damaging our economy. We cannot win the future without investing in a strong Pell Grant program.

    The entire letter can be read here.

    If your members of Congress have recently expressed support for federal student aid, please take a moment to thank them!

     

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