As much as $14 billion could be cut from federal student
financial aid programs if certain proposed budget adjustments are
approved by the U.S. Congress.
The reductions are being discussed as a means to rein in the
federal budget deficit, but many student groups across the country
find the proposal alarming due to the potential effect on their
financial futures.
The size of the cut, which will be voted on in November, will
depend on which version of the proposal is finally approved. The
Senate seeks to cut $14 billion, while the House of Representatives
is proposing to cut $9 billion.
These cuts could result in the average student-borrower having
to pay up to $5,800 extra during loan repayment, according to a
press release from the United States Students Association, a group
that voices students’ concerns in Washington, D.C.
The adjustments are part of a legislative process known as
budget reconciliation, a procedure that enables Congress to
eliminate certain legislative obstacles that would otherwise arise
in making tax cuts and adjustments to entitlement programs such as
Social Security, pension plans and student loan programs in order
to reduce the federal budget deficit.
Budget reconciliation is ordinarily a one-time process, meaning
that changes made under budget reconciliation would only be enacted
once and then be revoked. But the proposed cuts are in the form of
amendments to the Higher Education Act, an act that is reviewed and
adjusted only once every five to seven years.
This is a much more significant change than many people realize,
said Jennifer Pae, vice president of the USSA.
The cuts come during a period of rapid increase in tuition fees
at most universities, especially public schools.
“In a time when (tuition) fees are increasing, students
need an increase in federal aid, not a decrease,” said
Jeannie Biniek, external vice president of UCLA’s
Undergraduate Students Association Council.
Biniek said that in 1975, grants made up 80 percent of all
federal student aid packages, with loans forming the other 20
percent. Since then, the trend has reversed. Today, grants make up
only 20 percent while loans constitute 80 percent of federal
student aid packages.
As a result of this reversal, combined with increases in tuition
and living costs, Pae said 39 percent of students today are
graduating with what the federal government calls
“unmanageable debt,” hindering their ability to settle
down and establish themselves after graduation.
“This is hurting their ability to contribute to
society,” she said.
Pae said she believes the cuts are a step in the wrong direction
for Congress, which is a view shared by USSA President Eddy
Morales.
“We cannot possibly watch as Congress takes a leap
backwards to close the door of higher education on students,”
Morales said in a statement.
USSA seeks to end the budget reconciliation process through
lobbying efforts on Capitol Hill.
“Budget reconciliation was enacted by a margin of only
three votes in the House ““ we believe we can defeat
it,” Pae said.
USSA has already begun its efforts with a national call-in day
on September 20, when over 1,600 people called their
representatives in Congress to encourage them to vote against the
reconciliation measures. USSA plans to hold another call-in day on
October 19.
Biniek said that the office of the USAC EVP has been meeting
with legislators since August to encourage those who are opposed to
the measures to build support in Washington.
“We are focusing on advocating our position to the people
who are making the decisions about funding at state and federal
level, to keep education at a higher priority,” Biniek
said.