January 2018

U.S. Capitol Building

The landscape of federal support for college students would change dramatically under legislation moving through the House of Representatives. While some new efforts would emerge, several existing sources of aid would be eliminated, with low-income students facing the greatest risks.

The higher ed committee in the House passed a bill in December to reauthorize the Higher Education Act that is heading to the full House for approval in the coming weeks, said Sarah Flanagan, vice president for government relations and policy development at the National Association of Independent Colleges and Universities. Weighing in at more than 500 pages, the bill includes a host of provisions, each with fans and foes. But taking a step back to look at the bill’s overall impact, Flanagan is concerned. The bottom line, she said, is that the legislation would make college more expensive for more students.

A significant source of worry is the proposed elimination of one of the federal grant programs that targets the neediest students, the Supplemental Educational Opportunity Grants (SEOG) program. The Pell Grant program is the larger source of need-based aid that doesn’t have to be repaid. SEOG grants are a source of additional support for some Pell recipients who have the greatest financial need — with awards that average around $700, explained Megan Coval, vice president of policy and federal relations at the National Association of Student Financial Aid Administrators.

“A lot of program elimination is happening in this bill,” Coval said. “Some of it might be funneled into other programs, but other funds are going to broader national deficit reduction. That’s a concern for us, and other higher ed associations. If Congress wants to talk about streamlining and simplifying, that’s fair. But what we don’t want to do is cut and fail to redirect money into federal student aid programs in other ways.”

In Minnesota, 25,000 college students receive a total of $16.5 million in SEOG grants that would be eliminated under the House committee’s bill.

Another area where students would be hurt involves the subsidy that is now in place for borrowers that prevents them having interest payments while they’re in college. The bill would eliminate that subsidy, increasing costs for borrowers. Many low- and middle-income students would be unable to make those interest payments while in school, Flanagan said, so their total indebtedness would end up being higher. And Coval noted that the bill makes no corresponding increase in grant aid to lessen the impact of the change. Last academic year more than 140,000 students received these subsidized loans.

Other proposed changes include eliminating loan forgiveness for graduates pursuing public service fields, eliminating work study for graduate students, lowering borrowing limits for graduate students, lowering limits on Parent PLUS loans and raising the amount institutions are expected to contribute when they provide TRIO college access programs.

Some college leaders are already stating their concerns. Colette Geary, president of The College of St. Scholastica, shared her reservations with members of Congress in a recent letter. She noted that as written, the bill would “negatively impact the majority of our 4,325 enrolled students.” Along with concerns about the loss of SEOG grants and changes to loan programs, the college offers five TRIO programs that serve more than 900 low-income and first-generation youth, whether in high school or college. She wrote that the proposal for new cost sharing requirements for colleges offering TRIO programs “would severely limit the college’s ability to serve these deserving students.”

In such a massive bill, there are some elements that have been well received by higher education. The bill includes a proposed Pell Grant “bonus,” which students would receive if they enroll to take a course load of 15 credits or more per semester. The elimination of fees that students pay for securing federal loans is also widely supported.

Looking down the road, several hurdles would need to be cleared before any components of the House legislation becomes law, including the passage of legislation by the Senate’s higher ed committee (the members of which include Sen. Tina Smith, Minnesota’s new senator). While Flanagan noted that many components of what is in the House bill would likely be favored by Senate Republicans, she said that the input of Democrats in the Senate would be a factor as well, given that the chamber will require bipartisanship for a bill to move forward.

By John Manning