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FACT SHEET: Republican Budget Cuts Education

May 14, 2015

The Republican conference agreement on the fiscal year 2016 budget resolution makes many cuts in support for education.

Guts investments — The budget agreement maintains the post-sequester non-defense discretionary funding cap for 2016, slashing the 2016 funding level by $37.3 billion below the comparable President's request. But after 2016, the cuts get worse. Over ten years, the budget cuts non-defense funding by $496 billion below the cap levels, leading to a 21 percent loss of purchasing power by 2025. In addition to the cuts shown for education programs, the budget has another $575 billion of unallocated discretionary cuts that could fall on education programs or any other non-defense program.

Effect on pre-K, elementary, and secondary education in 2016 – House Republicans have not yet produced their 2016 education funding bill but they have cut its allocation by $3.7 billion below last year's enacted level, and by $14.6 billion (8.7 percent) below the President's request. If cuts are spread proportionately under that allocation, the Administration estimates that the Republican funding bill will cut 46,000 children from Head Start, cut $1.3 billion from Title I, and cut $450 million from special education relative to the President's request.

Increases student debt — Even though student loan debt already exceeds $1.3 trillion – more than the total of all credit card debt – the conference agreement on the budget guts current policy support for higher education by about $200 billion over ten years.

  • Student loans – In total, the conference agreement cuts mandatory spending in the education function by almost as much as the House-passed budget. Although the agreement does not specify which higher education cuts it intends, the House budget made the following cuts:

o Eliminated in-school subsidies for student loans for needy undergraduates. The Congressional Budget Office has estimated that this would add $3,800 to the debt of a student borrowing $23,000 in subsidized loans. Many students who get these subsidized loans also rely on Pell grants to pay for college. Eliminating subsidized loans cuts student support by $34 billion over ten years.

o Eliminated public service loan forgiveness which forgives borrowers' remaining balance owed on Direct Loans after working full time in public service and making 10 years of on-time payments. Eliminating the program will cut about $10 billion in student loan debt relief designed to help graduates afford to work in public service, including as teachers, law enforcement, or in military service or other government employment.

o Eliminated existing expansion of income-based repayment. This program generally caps the monthly repayment amount at 10 percent of the borrower's discretionary income for 20 years. Eliminating this program cuts about $16 billion from student debt relief efforts.

  • Pell grants – Section 6209 of the conference agreement makes it the policy of the House to freeze the maximum Pell grant for the next ten years, erasing the already-enacted inflationary increases that will raise the maximum grant by $225 by 2017. Congress already offset the cost of this increase and of maintaining it thereafter. The House budget made clear that it intended to eliminate all the mandatory funding Congress has already enacted for Pell grants, which eliminates nearly $85 billion in Pell grant aid over the next ten years.
  • College tax credits – The budget agreement lets the American Opportunity Tax Credit expire after next year, eliminating a $2,500 tax credit that helps more than 10 million low- and moderate-income students pay for college each year. Extending the tax credit costs $80 billion over ten years.

Federal student aid by state – The table on the next page shows the number of students who received Pell grants and subsidized student loans in each state in the 2013-14 school year [1]. All of these students could receive less federal support for their education under the policies behind the Republican budget, at a time when a college degree is increasingly necessary for a good-paying job, and when student debt continues to grow.

[1] The recipient totals are based on institutions, so students who received aid at more than one college or who received both Pell grants and subsidized loans could appear more than once in this tabulation.