The government’s new six-month spending plan has good news for students. It’s expanding Pell Grants and allotting more money for Public Service Loan Forgiveness. However, Education Secretary Betsy DeVos’ priorities, including a push for more school choice programs, were largely rejected by Congress.
Congressional negotiators reached a tentative agreement Wednesday evening on a $1.3 trillion omnibus spending bill. The bill sets the terms for government spending through Sept. 30, 2018, the end of the fiscal year.
The spending deal was negotiated in accordance with February’s two-year budget compromise and affects virtually every federal department, including the Department of Education. It’s expected to pass into law ahead of the Friday night deadline that would’ve forced a government shutdown.
Congress rejects DeVos’ plans to reshape education policy
DeVos and the Trump administration had ambitious plans to reshape the Department of Education by slashing total funding, cutting existing programs, and increasing funding for school choice initiatives. However, for the second year in a row, the administration’s proposals were not incorporated into the final budget agreement.
While DeVos would’ve reportedly cut the Department of Education’s budget by 5%, or $3.6 billion, Congress instead increased funding by $3.9 billion.
Congress allocated funds to preserve or expand existing programs DeVos had proposed eliminating or cutting, including after-school programs for low-income children, mental health grants, federal work-study programs, and other measures aimed at increasing college affordability.
Congress also declined DeVos’ request for $1 billion in funding for programs promoting school choice. She sought to fund FOCUS grants for school districts that adopt open enrollment systems and grant programs aimed at encouraging states to expand charter offerings.
Amid fears DeVos would act without oversight to make major changes, Congress added language into the spending bill that would prohibit an unauthorized reorganization of the Department of Education.
The bill prohibits funding authorized by the spending package from being used “for any activity relating to implementing a reorganization that decentralizes, reduces the staffing level, or alters the responsibilities, structure, authority, or functionality of the Budget Service of the Department of Education.”
Here’s what the budget does for students and schools
The budget proposal provides important funding increases for programs that help make education affordable. Here are the highlights of how the budget bill might help students, based on press reports from Thursday.
- The budget increases the Pell Grant award by $175 per student, bringing maximum Pell Grants up to $6,095 from $5,920. DeVos had proposed locking current limits in place. Approximately 8 million lower-income undergraduate students are eligible for Pell Grants annually, but grant award amounts are not indexed to inflation. Further, their value did not increase between the 2016-2017 and 2017-2018 academic years. Approximately 27% of students receiving Pell Grants in the 2015-2016 school year received the maximum grant funding.
- The $732 million Federal Supplemental Education Opportunity Grant received an additional $107 million in funding. DeVos had proposed eliminating the grant, which provides up to $4,000 annually for students with extraordinary financial need. Approximately 1.6 million students receive these grants, and 71% of them come from families with household incomes under $30,000.
- The budget increased funding for federal work-study programs by $140 million, bringing total funding up to $1.1 billion. Federal work-study programs help make on- and off-campus jobs available to part-time and full-time undergraduate and graduate students. More than 300,000 students participate in federal work-study. DeVos had proposed cutting funding for these programs in half.
- The budget creates a $350 million fund to help support Public Service Loan Forgiveness (PSLF). The program allows eligible borrowers to earn loan forgiveness by working in public service and by making 120 qualifying payments. Budget provisions also provide relief for borrowers enrolled in ineligible repayment plans but who would otherwise have qualified for relief. The Trump administration had previously considered eliminating PSLF.
- The budget provides a $50 million increase for apprenticeship programs. It also raises funding for career and technical education programs by $75 million. Apprenticeship programs have been supported by the Trump administration.
- The budget provides $40 million for the D.C. Tuition Assistance Grant. This grant offers eligible Washington, D.C., students up to $10,000 per academic year to help reduce out-of-state tuition costs. DeVos sought to eliminate federal funding for this program.
- The budget provides a 14% increase in funding for historically black colleges and universities, bringing total spending up to nearly $280 million in the 2018 fiscal year.
- The budget increases Education and Innovation Research Grants by $20 million, bringing total funding up to $120 million. These grants encourage states and local communities to develop evidence-based projects for improving education. Congress rejected expanding funding to explore school choice initiatives. It provided $250 million less in funding these grants than requested by the Trump administration.
- The budget provides $700 million for mental health counselors in schools and $25 million for mental health services through a Department of Health and Human Services program. DeVos had proposed the elimination of grant programs for mental health in schools as part of broader efforts to limit federal involvement in public education.
In total, the budget provides $591 billion for nondefense spending and $700 billion for defense spending. It leaves out controversial policy riders related to the stabilization of the Affordable Care Act, border wall funding, and a resolution for undocumented young people covered by the Deferred Action for Childhood Arrivals program, which President Donald Trump suspended March 5, 2018.
Congress must pass the budget by Friday at midnight to avert a government shutdown. The bill has the support of Congressional leadership from both parties, as well as Trump. Most expect it to pass. The House of Representatives was reportedly slated to vote on the deal Thursday.
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|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 2/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.23% – 13.23%1||Undergraduate and Graduate|
|4.20% – 11.44%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 10.11%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|5.85% – 6.99%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|