The White House budget proposal expected next week includes major changes to federal financial aid programs, according to details reported Wednesday by The Washington Post.
The newspaper obtained documents it said were described as a “near-final” version of the forthcoming budget by a Department of Education employee. The Trump administration’s proposal calls for cutting $700 million in Perkins Loans and makes unspecified cuts to subsidized loans, possibly ending interest subsidies for new borrowers. It would also cut the Federal Work-Study program by $490 million — almost half — and eliminate the Public Service Loan Forgiveness Program entirely. One source with knowledge of the PSLF proposal said it would grandfather in current borrowers.
The budget proposal would also include a new income-driven repayment program as promised by the Trump presidential campaign, raising maximum payments to 12.5 percent of income over a shortened 15-year time period.
The White House budget would also preserve dedicated funding for historically black colleges and universities — a win for HBCUs in a document that calls for a 13.6 percent cut to the Department of Education.
As promised in the “skinny budget” released by the administration in March, the budget proposal would preserve current funding levels for the Pell Grant program. It also includes restoration of year-round Pell Grants (a policy included by congressional lawmakers in a recent 2017 funding deal), but doesn’t peg the value of the grant to inflation.