Beware the Raid on Student Aid

College Affordability and Completion

April 26, 2017

By Michael Dannenberg

President Trump is proposing to empty over half of the Pell Grant program’s rainy day fund at a time when the economy is relatively stable. The money is not going to boost college grant aid for students already forced to borrow too much. Instead, like all of Trump’s proposed cuts to non-defense domestic spending, student aid funds essentially would be redirected to pay for Trump’s proposed military buildup. We should find out in a few days if Congressional Republicans will be complicit in shifting Pell Grant aid in support of the military buildup or other partisan priorities.

The raid on student aid is a bigger deal for domestic policy than just another politician dipping his hand into the cookie jar. It’s a bigger deal than being emblematic of the Trump Administration’s prioritization of weapons over people in its first budget. It’s a threat around which education advocates should mobilize, but likely won’t, because the interaction between the Pell Grant program and federal budget rules are obscure and the implications delayed in time. But the consequences of emptying the Pell Grant rainy day fund are very real for families.

A little over six years ago, the Pell Grant program didn’t have a rainy day fund and confronted a $5 billion deficit—12 percent of total program cost at the time. Because of a unique “balanced budget” rule particular to the Pell Grant program, Congress cut education spending outside of the traditional Pell Grant program to reconcile the numbers. We don’t have so-called summer Pell Grants for undergraduates anymore, because of past tiny or non-existent Pell Grant rainy day funds. We don’t subsidize education loans for graduate students during their repayment grace period any longer, because of non-existent rainy day funds.

The Trump Administration would have Congress set up a scenario where, once again, there’s a Pell Grant program funding crisis—this time manufactured—that leads to other domestic discretionary program cuts.  Click below for details on how.

The plan is reckless, spectacularly devious, or like much of the Trump-Congressional Republican agenda, both.