• Legislation & Analysis
  • April2nd

    As many of you jump back into work and school in the wake of Spring Break, we want you to know that we’ve been monitoring the happenings in Washington that affect student aid.

    Just before Congress departed for a mid-session break, both the House and the Senate considered budget resolution bills for FY 2014. A budget resolution is not signed into law by the president—it provides a guideline for how Congress can best balance spending and taxes and sets the maximum spending level for the upcoming year.

    The House budget resolution plan brings the federal budget into balance in 10 years while providing $966 billion in total spending (and keeping the recent sequester cuts in place); just $56 billion would be available for education, training and social services. The Pell Grant Program requires $32 billion; this means all other programs that address student aid, K-12 education and other vital social services would have to compete for funding. The House plan also eliminates federal subsidized student loans.

    The Senate budget resolution plan calls for $4 trillion in deficit reduction over 10 years, but does not balance the budget. It assumes Congress can and will pass legislation to reverse the sequester cuts and provides the same amount in total spending as the House plan–$966 billion. Of that, $87 billion would be allocated for education, training and social services; subsidized student loans would also be saved, and interest rates would remain steady at 3.4 percent.

    Check out the letters we recently sent to Congress, urging them to support the Senate’s plan and oppose the House plan for FY 2014.

  • March7th

    If Congress doesn’t act to prevent a 6 percent cut to the student aid programs, more than 100,000 students could lose major portions of their financial aid, and millions more will see their aid reduced. Students have given again and again to help balance the budget. In fact in just the last few years, over $35 billion in student aid has been eliminated.

    Check out this detailed breakdown of the impact of the sequester on students.

     

  • January21st

    It has been a while since you heard about us and our petition to Save Student Aid. Last year, your signature, along with those of more than 140,000 people like you, made sure that Capitol Hill got the message that students need support, not more cuts.

    We are now facing a historic moment and it’s time to send Congress a new message. You’re probably already familiar with the so-called “fiscal cliff,” which lawmakers have partially avoided by making tax decisions. But in that same bill, Congress delayed decisions on spending cuts until March 1. If Congress goes forward with the mandated cuts, students who get federal aid could lose up to $876 a year. We call this situation the ‘student fiscal cliff.’

    Here’s a detailed breakdown of the impact of the sequester to students.

    If Congress doesn’t act to prevent a 6 percent cut to the student aid programs, more than 100,000 students could lose major portions of their financial aid, and millions more will see their aid reduced. Students have given again and again to help balance the budget. In fact in just the last few years, over $35 billion in student aid has been eliminated.

    They’ve already cut:

    ·The summer Pell Grant that helped low-income students study year-round and finish their degrees in a shorter time.

    ·The Leveraging Educational Assistance Partnerships grant program which paired federal dollars with state dollars to provide more aid to deserving students.

    ·The in-school interest exemption for graduate and professional students, making borrowing more expensive at a time when students can afford it least.

    ·The interest exemption during the ‘grace period’ that allowed people just out of school six months to get settled before accumulating interest on their loans.

    ·Eligibility in the Pell Grant Program for more than 100,000 students. They also limited the benefits available to others.

    Students and families have already given more than their fair share. We can’t afford go over the student fiscal cliff. Please, contact your members of Congress today.

  • December9th

    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

    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

    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.