WASHINGTON, D.C. — The House Appropriations Committee released a Labor-H funding bill on Thursday that would eliminate subsidized federal student loans. The legislation also proposes to increase the maximum annual Pell Grant award by $50 to $7,445.
The Congressional Budget Office projects the Pell Grant program will face a nearly $17 billion shortfall by September 2027 if annual appropriations remain flat at approximately $22.5 billion. The Labor-H funding bill would reduce the Federal Work-Study program budget by 26 percent to $900 million. Supplemental Educational Opportunity Grant funding would decrease by 40 percent to approximately $500 million under the legislation.
The bill would also reduce the Education Department's discretionary budget by $8 billion to approximately $71 billion. The Institute of Education Sciences would receive a funding reduction of nearly $500 million. At the end of December, almost three million borrowers were using subsidized loans, which do not accrue interest while students attend college at least half-time. Only undergraduate students qualify for these loans, and current subsidized loan borrowers would not be affected by their elimination. The National College Attainment Network estimates that ending subsidized loans would increase average student debt by $6,000.
Craig Lindwarm, senior vice president of governmental affairs for the Association of Public and Land-grant Universities, said, "We're enormously appreciative that the House Republican legislation would address that shortfall and protect the program for students that are most in need. Unfortunately, though, it does so in a way that takes from students in another manner." The network said, "Unfortunately, the bill pays for the Pell investment by eliminating subsidized student loans—a change that saves approximately $16 billion over the next ten years." It added, "This approach could forbode more extreme funding cuts in the future as Congress strives to find additional savings to cover the cost of the Pell shortfall."
The legislation includes a provision that would withhold funding from public colleges or universities if they deny religious student groups the same rights afforded to other student organizations based on religious beliefs, practices, speech, or conduct standards. Lindwarm said, "The First Amendment already provides robust protections for religious liberty at public institutions of higher education, and policymakers should proceed with extreme caution in overturning Supreme Court precedent via an appropriations policy rider." He added, "The provision's language would possibly come into conflict with the need to protect campus communities."
Conversely, the bill would increase National Institutes of Health funding to nearly $49 billion. Tom Cole, committee chair, said, "America's success has rested on a simple belief: that every citizen should have the opportunity to learn, work, innovate, and build a better future. This bill supports that promise. From groundbreaking medical research and restored focus on core public health to workforce training and educational opportunity, it invests in the people and institutions that strengthen our nation." Under the bill, the Agency for Healthcare Research and Quality would not receive funding. The federal budget for the next fiscal year begins on October 1.