Latest news with #PellGrants
Yahoo
a day ago
- Business
- Yahoo
FY26 budget plan would slash maximum Pell Grant by nearly a quarter
This story was originally published on Higher Ed Dive. To receive daily news and insights, subscribe to our free daily Higher Ed Dive newsletter. Maximum Pell Grants would be cut by nearly $1,700, or about 23%, under the U.S. Department of Education's fleshed-out fiscal 2026 budget request released on Friday. The new maximum award would be $5,710 for the 2026-27 award year. The number of Pell Grant awards would fall by 111,000 from fiscal 2025 levels and aid available to students would decrease by $9.3 billion, to $27.7 billion, according to the budget document. Additionally, the proposal would cut all $1.6 billion from a grant program for low-income students supplementing Pell. The department also outlined its intention to seek a reversal of who pays the lion's share of student wages under a drastically reduced Federal Work-Study program. As requested in President Donald Trump's "skinny budget" last month, the program would be cut by nearly $1 billion, leaving employers to pick up more of the tab. Early this year, warning signs about the financial stability of the Pell program began flashing. In January, the Congressional Budget Office issued a report projecting a $2.7 billion deficit for fiscal 2025 for the program that helps lower-income students attend college. At the time, the nonprofit advocacy group Institute for College Access & Success warned that the shortfall could mean cuts for fiscal 2026 on a scale not seen since the Great Recession. The Committee for a Responsible Federal Budget followed up with projections of persistent shortfalls in the program over the next decade and said Pell Grants would need increased appropriations, smaller awards, tighter eligibility or some combination of those to stabilize the program. A January report from the Urban Institute attributed the Pell shortfalls to a combination of formula changes expanding eligibility and increases in undergraduate student enrollment in recent years. In its budget document, the Education Department blamed the funding shortfalls on 'Congressional inaction' and 'increasing instances of fraud.' The fraud allegations were tied to an Education Department announcement last week that it had found almost $90 million in student aid payments to ineligible recipients, including more than $30 million to people listed as dead in a Social Security Administration index. The department, in its budget detail document, said the Pell Grants program is the 'foundation of low- and moderate- income students' financial aid package and helps ensure access to postsecondary education.' But some higher education groups worry the administration's budget plans would reduce access. 'The President's budget slashes student financial aid, effectively reducing college accessibility and affordability at a time when many families are already struggling with the daily cost of living,' Melanie Storey, president and CEO of National Association of Student Financial Aid Administrators, said in a statement Monday. House Republicans last month passed a budget reconciliation bill backed by President Donald Trump that — among many other provisions — would alter the Pell Grant eligibility formula and increase the course hours required for full-time student designation from 24 to 30 per academic year needed for maximum grant awards. The American Council on Education called the proposed Pell changes 'crippling' and warned that some 700,000 students could lose eligibility under the bill. The measure is now under consideration in the Senate. The administration's proposed cuts to Federal Work-Study would also radically alter that program by slashing most of its funding. The fiscal 2026 budget document calls for working with Congress on changing the program to serve 'the most low-income students' and incorporate an 'appropriate split between Federal and employer wage subsidy.' Specifically, the department aims to flip the ratio of contributions from the federal government and employers. Where now the government covers up to 75% of wages and employers put in 25%, the Education Department aims to have employers paying 75% in the future. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
a day ago
- Business
- CNBC
Trump's 'big, beautiful bill' could mean 4 major changes for student loan borrowers
In the coming weeks, the U.S. Senate is expected to consider, amend and eventually vote on President Donald Trump's budget agenda, called the "One Big Beautiful Bill Act." The House passed the bill on May 22 by a single vote. The massive bill includes a variety of provisions aiming to cut government spending and raise revenue to address the federal deficit. Major provisions include making Trump's 2017 tax policy permanent where it would otherwise expire at the end of the year and cutting Medicaid benefits. Efforts to reform the federal student loan program are also included within the bill's 1,000-plus pages. The section addressing the nation's student debt would create a new income-based repayment plan, change eligibility rules for Pell Grants, aim to hold schools accountable for students' debt loads and more. The bill has an uncertain future in the Senate, but as it stands, here are four of the impacts current and future federal student loan borrowers could see. Critics of the current federal student loan system often contend that borrowers have too many repayment options, which are both confusing and overwhelming. If enacted as currently written, future federal borrowers will have just two repayment plan options: an updated version of the standard repayment plan and a new income-based plan known as the Repayment Assistance Plan. Borrowers with loans disbursed before July 1, 2026 will have the option of keeping their current plan, with the exception of the income-contingent repayment plan. Currently, the standard repayment plan sets borrowers' monthly payment at a fixed number, paying off their loans in 10 years. The new standard plan would offer a fixed payment with loan terms spanning from 10 to 25 years, based on the amount borrowed, according to a House committee fact sheet. The Repayment Assistance Plan, or RAP, will replace the currently available income-driven plans except for the Income-Based Repayment plan. On RAP, borrowers' monthly bill would be between 1% and 10% of their income, depending on how much they earn. Borrowers would pay a minimum of $10 a month and any interest exceeding their minimum monthly payment would be waived. Monthly payments for each income bracket are set as 1% of adjusted gross income for borrowers earning between $10,000 and $20,000 a year, 2% of income for those earning between $20,000 and $30,000 a year and so forth. Borrowers earning $100,000 or more will pay a maximum of 10% of their income on RAP. The plan also offers a matching principal payment of up to $50, so borrowers whose monthly payment is less than that or only covers interest can still see their balance shrink. Borrowers can have any remaining debt forgiven after 30 years of on-time monthly payments. Payments on RAP will qualify toward Public Service Loan Forgiveness. Undergraduates will have a borrowing cap of $50,000 over the course of their studies beginning with loans disbursed on July 1, 2026, up from the current $31,000 aggregate limit. Annually, students will have a cap on federal loans equal to the national median cost for their program or similar fields of study, and schools will have the ability to set lower limits. Graduate borrowers will have a cap of $100,000 or $150,000 for professional programs, including medicine. Parents will also have a $50,000 total limit on federal loans. Parents and grad students currently have no borrowing limit. The proposal also eliminates subsidized loans, which currently allow borrowers to avoid accruing interest on their debt during certain periods, such as while they are in school. Under the proposal, borrowers will lose the ability to have their loan payments paused when they are facing economic hardship, including unemployment. For loans disbursed after July 1, 2026, the proposal eliminates the option current borrowers have to request an economic hardship deferment for up to three years. Additionally, the limit on discretionary forbearances would drop to nine months over a 24-month period, from the current 12-month limit and three-year cumulative maximum. The proposal limits future administrations' ability to alter repayment plans or enact related policies. The bill would, going forward, require the Secretary of Education to demonstrate that any new regulations or executive actions would not increase costs for the federal government and prevents the Secretary from enacting any policies that do not meet that requirement. Additionally, the bill would repeal regulations for schools like the gainful employment rule, which requires institutions to demonstrate their educational offerings are sufficient to help students land well-paying jobs. Schools that do not meet gainful employment expectations risk losing access to federal funding. The gainful employment rule is intended to help students avoid low-value programs that leave them with too much debt and minimal earning potential. ,
The Hill
3 days ago
- Business
- The Hill
Education advocates press Senate for changes to Trump's ‘big, beautiful bill'
House Republicans' 'big, beautiful bill' doubles down on President Trump's education agenda, including raising taxes on university endowments and overhauling the student loan program, even as colleges are already feeling a funding pinch and borrower defaults are on the rise. Advocates are hoping to seize on the opportunity to have the legislation reformed in the Senate, where GOP moderates and conservatives are calling for significant — and sometimes contradictory — changes. Education experts warn that in its current form the package, which also boosts student vouchers and gives a tax break to religious colleges, will financially cripple student loan borrowers and universities alike. 'The major takeaway is that this bill is going to make paying for college and paying off student loans more expensive and more risky for millions of students and working families with student debt,' said Aissa Canchola Bañez, policy director for Student Borrower Protection Center. Student loan borrowers have faced a whirlwind in policy shifts between former President Biden and President Trump, but the current budget reconciliation bill would be an earthquake to the 45 million Americans with student debt. It would reshape repayment options, only offering one income-driven repayment plan or a standard repayment plan; all other options would be terminated. Advocates fear significant increases in monthly payment as more generous repayment plans disappear at a time when default rates are already going up. 'It's very bad for borrowers. I don't want to sugar coat it, you know, it's not looking good,' said Natalia Abrams at the Student Debt Crisis Center. 'It will lengthen the time for undergrads from 20 years to 30 years' to receive debt forgiveness after consistent payments, she added. 'For grad students, from 25 to 30 years. It's really unfortunate that this bill passed, especially by one vote' in the House. The package also intends to end Parent PLUS loans, limit how much federal student loan debt an individual can take out and changes eligibility to Pell Grants. The maximum an undergraduate student could take out is $50,000, with parents able to match the amount. For Pell Grants, the number of credits needed to qualify will increase. Other changes include eliminating subsidized loans. 'One of our big worries is that there will be borrower confusion amidst this return to repayment and with servicers potentially needing to implement, if this reconciliation bill goes through, a new income driven repayment plan that departs significantly from any IDR plan that has come before. And so, I think that borrower confusion is a big problem for policymakers,' said Sameer Gadkaree, president and CEO of the Institute for College Access & Success. Republicans and conservatives have cheered the legislation as a way to simplify student loan repayments and ensure those who did not go to college do not pay off others' debt through their taxes. 'It's time we stopped asking taxpayers to foot the bill for our broken student loan system that has left borrowers in trillions of dollars of debt and has caused college costs to balloon,' said Rep. Tim Walberg (R-Mich.), chairman of the House Committee on Education and the Workforce. 'It's time we stopped asking a factory worker in Michigan or a rancher in Texas to subsidize the student debt of a lawyer in Manhattan. I urge my colleagues in the Senate to end the status quo and get this bill to the president's desk,' he added. Colleges, already beset by the Trump administration, face a financial hit too: tax increases on their endowments ranging from 1 percent to 21 percent, with major universities such as Harvard and Yale at the top end. Those are an addition to the taxes on endowments passed in 2017 during Trump's first administration back. Before then, endowments were never taxed. 'We know that almost 50 percent of endowment spending goes to financial aid. If you add financial aid and academic programs, that's two-thirds of endowment spending, and so, if you take money away from the school, from its endowment resources, it's going to undermine their ability to provide robust financial aid. That's why we call it a scholarship tax, because that's what it is,' said Steven Bloom, assistant vice president of government relations at the American Council on Education. Despite Trump calling for Republicans to unite around the bill, some in the Senate are demanding changes before they'll give it their support. 'I've told them if they'll take the debt ceiling off of it, I'll consider voting for it,' said Sen. Rand Paul (R-Ky.). The infighting has led to some optimism that there is still time to get some changes. 'It seems like folks in the Senate have a bit of heartburn about the level of cuts to the Pell program, and that there might be a discomfort in adopting what the House has put together on that front,' Canchola Bañez said. 'I would hope that senators would look at the ways in which the House proposal will make it significantly harder for folks to afford to repay their loans. And in a world where these policymakers want to ensure that student loan borrowers can repay their debts, we need to make sure that there are actual safeguards in place,' she added.
Yahoo
4 days ago
- Business
- Yahoo
GOP plan could raise credit requirements for Pell Grant recipients
WASHINGTON (NEXSTAR) — A Republican-backed proposal could bring major changes to the Pell Grant program, requiring many college students to take on heavier course loads to qualify for federal aid. Under the legislation, full-time students would need to enroll in at least 30 credit hours per year, up from the current 24, to remain eligible. Part-time students would see their requirement increase from 12 to at least 15 credit hours annually. 'It's a goal to get more students to go full time, graduate more quickly, and I think it will help some students get there,' said Robert Kelchen, an Education Professor at the University of Tennessee, Knoxville. But Kelchen also cautioned that many students might struggle to meet the new demands. 'About two-thirds of students work, and many of them are working close to full time,' he said. 'Some are balancing full-time school and full-time work. Others are taking one or two classes while working 40 hours a week and caring for their families.' Pell Grants were established by Congress in 1972 to help low-income students access higher education. Today, about 40% of U.S. college students receive the grant, which does not need to be repaid. The federal government spent approximately $31.47 billion on the program during the last academic year. Critics of the proposal, including the NAACP, warn it could disproportionately harm students of color and roll back recent gains in college access. 'What we're seeing is a really aggressive and swift attack,' said Wisdom Cole, the NAACP's National Director of Youth and College. 'About 75% of graduates from Historically Black Colleges and Universities (HBCUs) are Pell Grant recipients. Those are the students who will be hit the hardest.' Supporters argue the changes are necessary to ensure accountability. Madison Marino, a Higher Education Policy Expert at the conservative Heritage Foundation, cited data showing that only about 53% of Pell Grant recipients complete a degree — significantly lower than the 70% to 73% completion rate for their peers. 'I think it will make students re-evaluate what educational pathways are available to them,' Marino said. 'Does a traditional four-year college fit me?' The proposal, which also redirects more financial aid toward workforce training programs, passed the House last week and is now awaiting action in the Senate. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
24-05-2025
- Politics
- Yahoo
Worcester college students advocate to Congress to support higher education
Last month, Daniela McDaniel, a 19-year-old freshman from Worcester State University (WSU), traveled to Washington, D.C., to advocate for protecting higher education policies such as Pell Grants and the Federal Work-Study Program. McDaniel's mother is currently working three jobs and is doing her best to pay her daughter's out-of-state tuition. It was through federal student aid that she was able to go to WSU for their nursing program. When she heard Republicans were considering making changes to Pell Grants that would affect their accessibility, McDaniel was infuriated. 'Most of our education is paid because of financial aid, Pell Grants, all that stuff,' McDaniel said. 'I was freaking out. I had to sit back and be like, 'Okay well now what do I have to do?'' McDaniel, along with some of her WSU peers and students from six other Worcester colleges and universities, flew down to D.C. on April 30 on an organized trip to meet with the staff of Democrats and Republicans from several different states, including Texas, Alaska, New Jersey, Pennsylvania and Massachusetts. The other colleges that sent students included Clark University, College of the Holy Cross, Quinsigamond Community College (QCC), Worcester Polytechnic Institute (WPI), UMass Chan Medical School and Nichols College, according to a Clark University spokesperson. In their conversations with the staff members, the students urged them to keep higher education policies such as Pell Grants intact. Pell Grants are a form of federal financial aid that is given to undergraduate students with exceptional financial need who have not earned a bachelor's degree, according to the Federal Student Aid website. On Thursday, May 22, the House of Representatives passed a tax and immigration bill that includes a provision where students have to be enrolled in at least 30 credit hours per academic year to earn a Pell Grant — an increase from the current 24 credits. The bill also eliminates federal subsidized loans for undergraduates and Direct Plus loans for graduate students beginning on July 1, 2026, according to Higher Ed Dive. Isabella Corazzini of Quinsigamond Community College (QCC) is angry and worried about the passage of the bill. 'These are not just policy changes; they are betrayals. Let's be real: it's not our Massachusetts legislators holding us back. They've shown up, they've listened, and many have stood by students like us,' she told MassLive. 'The real obstacles are legislators from other states — those who shut down these bills in the dark of night, who avoid their offices and refuse to meet with the very people their decisions are hurting.' When the students spoke to the staff members, there was a sense of fear and worry that impacts to higher education could affect their experience in college. Summit Smoker, a freshman at Clark University, met with the staff of representatives from Pennsylvania, his home state. He also met with staff from Sen. Dave McCormick, R-Penn., and Sen. John Fetterman, D-Penn. The reception from each office was mixed, with staff from Rep. Lloyd Smucker's office being receptive to Smoker's concerns while Fetterman's staff was more 'wishy washy.' In his communications, Smoker tried to articulate his worries about what cuts to federal student aid could mean to his college education. 'I'm asking myself, will I be able to finishing my degree?' said Smoker. 'Will I have to drop out of college? I benefit from the Pell Grant. I benefit from federal subsidized loans and I am on work study as well.' Now, that fear has turned to anger towards the Trump administration and members of Congress. 'I feel the current administration is not invested in the future of this country or democracy,' Clark University Student William Stafford said. 'Education has taken me places I never knew possible, and without the multitude of aid I received from both my institution and the government, students such as myself wouldn't be able to take advantage of the opportunities we work so hard for.' With the House passing the bill with the changes to higher education, there needs to be greater advocacy, QCC Junior Alyssa Corazzini tells MassLive. The House bill now heads to the Senate, who will be voting on the proposal next. Corazzini told MassLive that she hopes the Senate will 'stand on the side of students and protects student aid.' 'Policymakers need to remember that working-class people require help to access higher education,' she said. 'These aren't just budget line items.' DHS denies claims of Worcester mother's mistreatment ICE agents injured Worcester mother during raid, won't give her meds, attorney says Shadow of ICE arrest hangs over Worcester 'State of the City' speech Read the original article on MassLive.
