Cuts And Reform Highlight Trump's FY2020 Proposed Budget
Posted by bemerbemer on March 26th, 2019
President Trump unveiled his proposed federal budget for the 2020 fiscal year and it includes a billion cut for the Department of Education. According to several higher education news sources, these cuts will have a profound impact on current and past students, student loan administration and the loan forgiveness program. While the proposal is unlikely to pass Congress, it does send a clear message regarding the White House’s education and budget priorities.
Another Streamlining Effort for Student Loans
Student loan debt is now in excess of trillion and is becoming more of a hot-button issue nationally. While the Administration has tried repeatedly to streamline the repayment system, there is little it can do without legislative help and authorization. Trump's goal is to hold all borrowers to the same set of standards, which would broaden loan forgiveness eligibility for all students and not just federal and nonprofit employees.
Under the President’s proposal, all undergraduate borrowers who owe student loans after 15 years and to graduate students after 30 years would qualify for an element of loan forgiveness. The proposal runs counter to some who want to eliminate student loan forgiveness programs altogether. Almost all parties admit the program needs some reform.
Institutional Risk Sharing
Trump’s proposed budget would also require colleges to assume some financial responsibility for defaults on student loans. This part of the proposal is still being debated within the Administration, according to Jim Blew, the Education Department’s Assistant Secretary for Planning, Evaluation and Policy Development. The argument behind the proposal is that institutions that have a financial stake in repayment will work with students to avoid default and it possibly could lead to tuition decreases, requiring less lending to attend college.
Cuts in Work Study Programs
One area that did not escape proposed cuts is the federal work-study program. Trump’s budget proposal calls for 0 million for the program, which is over 0 million less than the 2019 budget. The goal is to see work-study programs become more career-oriented as opposed to being more oriented towards student on-campus employment. Under the proposal, work-study funds would be distributed according to how many students they enroll in the federal Pell Grant program. It would be an update to the formula that is now used would provide a greater allotment of work-study funds for community colleges.
It should be noted again that this proposal is very unlikely to pass the Congress, given it is now a divided body. It is, however, a starting point for negotiations and undoubtedly will be a major source of discussion as part of higher education news.Also See: Work Study, Loan Forgiveness, Student Loans, Student Loan, Proposal, Student, BudgetTop Searches - Trending Searches - New Articles - Top Articles - Trending Articles - Featured Articles - Top Members
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