President Trump unveiled his proposed 2018 fiscal budget last Tuesday, which included billions of dollars in cuts and restructuring to the American educational system, including a revamp of the student loan repayment system.
If passed, the budget would bring massive changes to federal student aid. In order to cut $1 billion next year, the government would stop subsidizing the interest on student loans.
The budget also necessitates the complete restructuring of student loan repayment, which has some degree of bipartisan support in Congress. Current options for loan repayment include standard repayment (a 10-year term), graduated, extended, pay-as-you-earn, income-based, income-contingent and public service loan forgiveness. Trump’s budget only allows one repayment plan that caps monthly payments at 12.5 percent of income. For undergraduates, the loan balance would be forgiven after 15 years. The largest controversy introduced by the new plan involves the large amount of people in the Public Service Loan Forgiveness (PSLF) program.
The PSLF program was introduced in 2007 by President George W. Bush as a means of easing student debt for those intending to work in the public sector. Anyone working for a nonprofit for the city, state, or federal government could negotiate their direct federal student loans to make them more affordable. Moreover, as long as the individual paid back their loans regularly while working in the public sector consistently, the loan would be forgiven after ten years. The first group of people to sign up for the program in 2007 would be eligible to have their loans forgiven this fall. More than half a million Americans have signed up for the program in total.
In an attempt to aid low-income college students, Trump’s budget plan would make Pell grants available year round, so that students could receive them during the summer as well as the academic year.
The budget plan also entails a 13.6 percent — or a $9.2 billion — budget cut to the Department of Education. This would require cutting $1.2 billion dollars from after-school programs for children and $2.1 billion from teacher training and class size reduction programs. At the same time, the budget also provides $167 million to help states expand charter schools and voucher programs, as well as an additional $250 million for an Education Innovation and Research Program to study and expand private school vouchers.
After President Trump released his budget, UC President Napolitano expressed criticism of the budget and urged Congress to work on a revised budget, citing the vast array of research and aid programs that are reliant upon federal funding for operation.
“As president of the nation’s largest public research university, I urge Congress to immediately begin work on a revised budget proposal that makes meaningful investments to help our students, protect our patients and keep America’s research enterprise preeminent,” Napolitano said in her statement.
Napolitano noted that the UC receives over $8 billion in federal funding, including $3 billion for research, $3.1 billion for patient care support and $1.6 billion for student financial aid.
“With the proposed budget’s drastic cuts to the National Institutes of Health, for example, UC researchers might never have accomplished such medical breakthroughs as the bioartificial kidney for the treatment of end-stage renal disease, or the drug XTANDI to treat prostate cancer. Likewise, proposed cuts to the National Science Foundation and energy science programs could slow vital UC research that mitigates the effects of climate change,” Napolitano said.
Secretary of Education Betsy Devos defended the budget on Wednesday in front of the House appropriations subcommittee. DeVos stated that the budget would give power to states. She believed parents should have more choices in regards to their children’s education.
Massachusetts Republican Katherine Clark asked Secretary DeVos if she would overrule the state government on the case of discrimination in schools.
“You are the backstop for students and their right to access quality education,” said Clark. “Would you, in this case, say we are going to overrule and you cannot discriminate, whether it be on sexual orientation, race, or special needs in our voucher programs?”
DeVos reiterated her belief that parents should have more choices.
“The bottom line is we believe that parents are the best equipped to make choices for their children’s schooling and education decisions,” said DeVos.
The Trump budget remains pending, as it requires congressional approval to pass and has found little support overall in either house. What support does exist is targeted at specific aspects of the plan rather than the entire budget wholesale.
Since the budget proposal, the Trump administration has not released anything new or responded to criticism that arose in the last few days.