Trump’s Buget Outline Silent on Student Loans, Cuts College Grants and Work-Study

Michael Lux Blog, News, Student Loans 0 Comments

This morning President Trump unveiled his 2018 Budget Outline.  The full 62 page document is sparse on details.  Instead, it is intended to serve as an overview of spending objectives.  Most of the media attention has been focused on the cuts in spending across the board in order to fund a dramatic increase in spending at the Department of Defense.  Nearly every department is being cut in some fashion, and agencies like the Corporation for Public Broadcasting and the National Endowment for the Arts are to be eliminated.

Student Loans

Late in the campaign, then candidate Trump unveiled a new proposed federal student loan repayment plan.  The plan called for payments to be capped at 12.5% of discretionary income and for forgiveness to be offered after 15 years.  This plan could be a reasonable alternative for many federal borrowers.  Most estimates at the time had the plan coming in at a significant cost to the federal government, so we were hopeful we would see this plan in his budget outline.

Unfortunately, the budget is completely silent on the issue of student loans.

College Grants

The budget outline should definitely be a cause for concern for current college students.  The 732 million dollar Federal Supplemental Educational Opportunity Grant program is to be cut in its entirety.  The need-based grant program supplements Federal Pell Grants and provides students between $100 and $4,000 depending upon financial need.

On the subject of Pell Grants, Trump proposes level funding and a cancellation of $3.9 billion in unobligated carryover funds.  This means that the $3.9 billion was set aside for Pell Grants in prior budgets, went unused, and is currently set aside for use in future Pell Grants.  Trump wants to use this money elsewhere and keep future Pell spending at it current level.  While this is not technically a cut to Pell Grants, it is a huge blow.  The $3.9 billion could have helped a lot of students, and by keeping funding at it current levels, Pell Grant assistance will not keep pace with continuing tuition increases.


The budget outline doesn’t specify how much will be spent on Work-Study, but it does say that Work-Study spending will be reduced “significantly”.  This would be another huge blow to current low-income college students.

Reducing the Federal Work-Study program hurts in a few different ways.  First, Work-Study aid is a great way to help students reduce their student loan borrowing while in school.  Second, the program helps participants find work while they are in school as many jobs are set aside specifically for Work-Study participants.  Finally, the Work-Study program is an excellent tool in helping students learn to balance their educational goals with the need to work during school.

Bottom Line

The 2018 Budget Outline, in its current form, fails to deliver on an important student loan promise and slashes funding for critical student programs.  If these proposals are enacted, it would be a huge blow to low and middle-income families with students in college.  If these changes do not meet your approval, be sure to contact your elected representatives to let them know that the proposed changes are not acceptable.