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Murray and Ryan Budgets Offer Divergent Visions for Access to Postsecondary Education and Student Financial Aid

Mar 15, 2013

By Marcie Foster

This week, two FY14 budget proposals emerged from Congress that presented contrasting views of education and economic opportunity in the nation. Rep. Paul Ryan’s budget, once again titled Path to Prosperity, echoes similar themes from last year’s House budget, slashing critical higher education investments and cutting access to college for millions of low-income students. These and other draconian cuts are starkly different from Senator Murray’s proposed budget, Foundation for Growth, which improves college affordability and makes smart investments in postsecondary education to ensure that U.S. students and workers have the skills and education needed to support continued economic growth. The Ryan budget was passed by the House Budget Committee on a party line vote and is expected to be taken to the House floor for a vote next week. The Senate Budget Committee also passed its budget on a party line vote and the full Senate will consider the resolution next week.

Ryan’s budget proposes deep and alarming cuts to student financial aid, particularly for those most in need. The budget severely cuts the Pell Grant program, eliminating its mandatory funding portion, which would significantly drive up the discretionary costs and threaten adequate funding in the future to aid all needy students. Further, it eliminates eligibility for students who have to reduce their course load to less than half time (less than 6 credit hours) due to unavailability of courses, heavier or inflexible work schedules or family obligations.  This short-sighted cut risks losing these students altogether and reducing college persistence and success rates precisely when the nation needs to be increasing them. It also freezes the maximum grant amount to the current award level ($5,645) for the next ten years, preventing the program from keeping up with rising tuition costs and inflation. Even with current funding, Pell Grants are losing substantial purchasing power, disproportionately impacting college access for low-income and disadvantaged students. Keeping the Pell Grant at current levels for 10 years would considerably lower its purchasing power to cover only 17 percent of the cost of college by 2023—the lowest share since the start of the program. Ryan uses misguided evidence to support these cuts, claiming that Pell Grant spending is on an unsustainable path. In fact, Pell Grant costs have declined since 2010 and are projected to remain level over the next 10 years after adjusting for inflation. Furthermore, the program has suffered massive cuts from recent budget agreements which have already slashed Pell spending by $56 billion over the next ten years.

The Ryan budget also makes significant eligibility changes to the formula for calculating student financial aid; these changes reduce eligibility for all types of aid–including Pell Grants, student loans, and other aid–and would hit nontraditional, working, adult students especially hard. These students can least afford these cuts at a time when college costs have increased nearly four times faster than median family income over the last three decades. The budget also targets new funding made available through the Trade Adjustment Assistance Community College and Career Training Grant Program (TAACCCT) by moving it from mandatory to discretionary funding. Funds from this program are designed to assist community colleges deliver training for high-skilled occupations to workers through career pathways and other innovative strategies.

By contrast, Murray’s budget takes a balanced approach to deficit reduction and strengthens the nation’s commitment to postsecondary education for low-income students. Citing rising college costs and declining state support of public higher education, Murray prioritizes investments that aim to keep college affordable, particularly for low-income and underrepresented students. To strengthen Pell, the budget assumes that Congress will carry over the current FY13 surplus of $9.2 billion to FY14, resulting in a surplus for FY14 of nearly $4.5 billion. Murray’s budget also bolsters the discretionary portion of Pell for FY15 and future years. The proposal calls on Congress to take action to reduce college costs through the enactment of legislation, and supports this effort by providing a “deficit-neutral” reserve for this purpose. Murray also calls for $10 billion in training investments for adults and youth seeking to improve their skills and obtain jobs in sectors with immediate openings.

These two budgets paint distinctly divergent views of access to postsecondary education and student financial aid in the U.S. Ryan’s proposals are deep, damaging, and would undermine the nation’s growth by limiting student access to postsecondary education. By contrast, Murray’s budget continues investments in student financial aid and seeks to slow the growth of skyrocketing college costs.

Every cut to the Pell Grant program, which is already well-targeted to needy students, reduces students' access to credentials, which results in America's workforce falling behind our competitors and our economic engine slowing. Before proceeding with the House budget proposal, federal policymakers should first get their Pell Grant facts straight, and then carefully consider the long-term economic costs of reducing investments in the program and in our shared economic future.

For more information on the benefits of the Pell Grant program see the CBPP and TICAS factsheet Pell Grants Help Keep College Affordable for Millions of Americans.

See also previous CLASP posts on these issues:  College Costs Rising Four Times Faster than Income, Two and a Half Times Faster than Pelland Financial Pressures Drive Down College Completion

For a CLASP budget primer, see Confused by the Federal Budget? You’re Not Alone.


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