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Ryan Budget Offers Bleak Future for Aspiring Low-Income College Students

Apr 02, 2014

By Marcie Foster

This week the House Budget Committee, chaired by Rep. Paul Ryan (R-WI), released its vision for the FY15 federal budget.  For the fourth year in a row, the committee’s budget cuts off college access for millions of low-income students —undercutting the widely shared goal expressed in its title, Path to Prosperity. Moreover, it does so in a way that disproportionately impacts low-income, working adult students, many of whom are parents and must work while attending college.

While the budget summary notes that final decisions would be left to the committee, it outlines “illustrative policy options” that would:

  • Slash funding for the Pell Grant program, restricting access for low-income students in future years. The Ryan budget eliminates all funding for Pell from the “mandatory” portion of the budget, which would drive up the portion of the budget coming out of the capped discretionary fund and threaten aid availability to low-income students in the future. The Pell Grant program makes college a reality for nine million low- and moderate-income students and helps the U.S. build a more skilled and globally competitive workforce. Rep. Ryan’s proposal would undermine our nation’s skill-building efforts and economic growth at a time when projections estimate that, by 2020, nearly two-thirds of jobs will require at least some postsecondary education.
  • Threaten completion for low-income, working students by cutting off their financial aid if they attend less than half-time. The budget suggests eliminating aid eligibility for students who must reduce their course load to less than half-time (fewer than 6 credits) even when such a reduction is due to the unavailability of courses, changing work schedules, or family obligations. Less-than-half-time enrollment of low-income students is mostly temporary, and cutting off aid during semesters with lower course loads may make it impossible to enroll at all, threatening their ultimate completion. According to a Department of Education study, continuous enrollment significantly increases the probability that a student will complete a degree.
  • Restrict the purchasing power of the Pell Grant, putting college further out of reach for low-income students. Rep. Ryan proposes to freeze the maximum Pell Grant for the next 10 years, despite the fact that the purchasing power of Pell has eroded considerably over time. The award level that Rep. Ryan suggests ($5,730) is expected to cover less than one-third of the cost of college in 2014-2015—the lowest since the start of the program. By 2024, this same award level would only cover 20 percent of college costs.
  • Reduce aid eligibility of all types—including Pell Grants, student loans, and other aid—for some students by modifying the formula for calculating student aid. The budget suggests changing the aid eligibility formula in such a way that would restrict aid even further to low-income students, potentially increasing their unmet need (the difference between the costs of college and the amount of grant aid that the student receives). In 2012-2013, the average community college student already had more than $6,000 in annual unmet need. Policies that increase unmet need could result in students taking out additional loans to meet college costs or deciding to forgo college altogether.

Furthermore, Rep. Ryan claims that the Pell Grant program is on an “unsustainable” path. In fact, the program has seen a decline in costs since 2010, resulting in funding surpluses for the last several fiscal years. Program costs are expected to remain level over the next 10 years, after adjusting for inflation.

Due to the passage of the Bipartisan Budget Act in December 2013, which set spending levels for FY14 and FY15, the Ryan budget is unlikely to become law. However, it sets a dangerous and short-sighted example for future federal spending decisions.  We should be investing in America’s workforce not undercutting committed and hard-working students seeking greater opportunity through postsecondary education and economic success for themselves and their families.

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