Late last week, the United States Senate passed a resolution–an early but essential step in the process of budget reconciliation–that included $175 billion for border security and $150 billion for military spending. By unlocking the reconciliation process, the Republican majority can move their budget priorities through on a partisan basis, bypassing the usual 60-vote threshold to advance legislation in the Senate. The legislative path forward for reconciliation remains uncertain, as the House appears poised to move this week on its own, much larger-scale version. But the implications for college students and student loan borrowers are clear: The cuts needed to fund priorities in either bill cannot be reconciled with the needs of students and student loan borrowers.
Press accounts over recent weeks have told the developing story that many House Republicans are pushing for trillions of dollars in cuts to critical government programs to cover the cost over the coming years of maintaining the tax levels put in place by the Tax Cuts and Jobs Act of 2017. Rather than advance the president’s desired “one big, beautiful bill,” Senate Republicans envision a two-step process (both through reconciliation) that first addresses enhanced border security and immigration enforcement, leaving tax policy until a later date. Either approach, as indicated by bills proposed in the respective chambers, would demand significant cuts to programs that millions of students rely on as they navigate their educational journeys.
The House’s plan calls for $330 billion in education and workforce cuts and $230 billion in nutrition program spending reductions. Reaching these levels could put at risk:
- Income-driven repayment plans that provide a light at the end of the student debt tunnel; borrowers could see their payments increased by hundreds of dollars per month, and they could be forced into making payments for the rest of their lives.
- Pell Grant funding for low- and middle-income students, which would raise an even higher financial hurdle for students who rely on this targeted program to make college possible. Without a congressional fix, the Pell program already faces a projected shortfall of nearly $3 billion for next fiscal year, and a $10 billion shortfall in 2026-27.
- Baseline protections for students that guard against waste, fraud, and abuse of federal financial aid programs; rescinding these regulations would open the door to predatory actors in higher education who disproportionately target Black and Latino students, women, low-income communities, first-generation students, and student veterans.
- Tax benefits to pursuing higher education; a menu of options circulated by the House committee overseeing taxation includes provisions that would tax scholarships and end the American Opportunity Tax Credit and Lifetime Learning Credit, leading to higher tax burdens for students who rely on these credits to help finance their costs of attendance and living expenses.
- Public Service Loan Forgiveness, signed into law by President George W. Bush nearly two decades ago, which should enable teachers, nonprofit employees, and professionals in other public service fields to receive student debt relief after ten years in qualifying roles.
- Graduate student loans that support students pursuing education beyond a bachelor’s degree–despite estimates that by 2031, 42 percent of jobs will require at least a bachelor’s degree; more than 27 million jobs over this time will require a graduate degree. More students needing this support would be pushed into riskier and more expensive loans in the private market.
- Support for students’ basic needs, including the Supplemental Nutrition Assistance Program that more than 40 million Americans, including millions of college students, rely on to avoid living in hunger; child care supports through the Child Care Access Means Parents in Schools (CCAMPIS) program and the Child Care and Development Block Grant (CCDBG); and cash assistance and wraparound support services provided through the Temporary Assistance to Needy Families (TANF) Program, which would harm almost 4 million undergraduate students who are parents. Congressional Republicans have also proposed cuts to Medicaid and housing assistance, which would worsen health care access and housing affordability, respectively, for students with low incomes.
- Student support programs, including the Postsecondary Student Success Grant program and the Basic Needs for Postsecondary Students program, which are competitive grants to institutions to design and deliver services for students that reduce academic and non-academic barriers that can inhibit student success and completion.
Today’s college students face high levels of basic needs insecurity, which would worsen under proposed Congressional cuts to federal programs. According to data from the 2019-20 National Postsecondary Student Aid Study, over 4 million students had experienced food insecurity and more than 1.5 million students had experienced homelessness. Cutting vital programs will worsen hardship for millions of families and children, and imperil economic growth by channeling millions of people into low-wage, low-mobility jobs, despite increasing demand from employers for workers with more education.
These potential provisions are among the options now under consideration, all of which would take support away from students and student loan borrowers to help cover billions or even trillions of dollars in unrelated spending and increased deficits.
Rather than pursue these misguided policy directions, Representatives and Senators should find common ground to invest in programs that actually support people seeking education and training to participate fully in the civic life and economy of this country. That’s why last week TICAS joined a national coalition of other advocates, unions, and civil rights organizations in calling on Congress to consider alternative measures that focus on long-term solutions, including greater investment in higher education, expansion of financial aid, and stronger consumer protections for student borrowers.
Reconciliation opens the possibility of fast-tracking spending cuts and increases, but uncertainty persists about how the majorities in the House and Senate will resolve their differences and meet the requirement to both pass identical legislation. We urge advocates, students, borrowers, and colleges to join us in demanding that Congress invest in people and the future of our economy, rather than put educational opportunities farther out of reach.
