Since he started campaigning for a second term, President Donald Trump’s promises to slash government spending have targeted universities. With calls to overhaul the Department of Education — including staunch support from Linda McMahon, the department head nominee — Congress most recently proposed a $2.7 billion budget cut to federal need-based financial aid.
However, calls to redistribute Pell Grants and loans — the main forms of federal financial assistance — were discussed long before Trump’s return. The Republican-backed College Cost Reduction Act seeks to address the United States’ $1.7 trillion in student debt by giving larger grants to fewer students.
In an interview with WSN, George Spencer, assistant professor of education at NYU Steinhardt School of Culture, Education, and Human Development, said that while the CCRA — a bill introduced in the House of Representatives last January — would offer more support to some students, changes wouldn’t solve national student loan debt.
“[Republicans are] not proposing a wholesale increase of the Pell Grant to meet the rising cost of college,” Spencer said. “Instead, they’re suggesting that they would double the Pell Grant for specific populations of students — specifically juniors and seniors — and students who are in specific disciplines, like who are majoring in certain STEM fields, for example.”
The act was introduced by Republican Rep. Virginia Foxx of North Carolina, chairwoman of the House Committee on Education and the Workforce. It would cap off annual loans, limiting the total borrowing amount to the median cost of the student’s program. The aggregate limits are set to be $50,000 for undergraduates, $100,000 for graduates and $150,000 for students in professional programs. Graduate and Parent PLUS programs would also shut down.
CCRA reflects Republicans’ ongoing goal to address the country’s stagnant student loan debt. However, critics have stipulated that the issue simply mirrors a steadily rising cost of college.
“On one hand, they’re trying to not necessarily reduce cost, but they’re trying to reduce the amount of loans that students are taking out given the crisis around student loans,” Spencer said. “At the same time, it doesn’t really get at the root of the issues, which is affordability.”
During his time in office, former President Joe Biden cancelled $188.8 billion in student loan debt. The administration had focused on expanding existing student loan forgiveness programs to repeal more debt than any other U.S. president, an approach Trump has repeatedly criticized.
The bill would also instigate two repayment plans — a 10-year mortgage style, and an income-driven repayment system — however, current borrowers paying under a pre-existing fixed repayment plan would be able to continue paying under that plan.
In a letter addressed to the House of Representatives, the Association of American Universities — a nonprofit representing research universities, including NYU — said it was concerned the proposal wouldn’t sufficiently account for programs with higher quality programs, more expensive facilities or strenuous costs of living. It also said that many colleges would be strained with the responsibility of compensating for students who no longer receive federal financial aid under the new program.
“This is not something that will actually affect students in any capacity yet,” Spencer said. “But there is some momentum around potentially getting this passed and it’s something that is important to pay attention to.”
The bill is a combination of legislative proposals previously introduced by Republican members of Congress. This includes the Pell Plus Act introduced by Reps. David Joyce (R-OH) and Derek Kilmer (D-WA), the Federal Assistance to Initiate Repayment Act introduced by Rep. Burgess Owens (R-UT) and the Responsible Borrowing Act introduced by Rep. Glenn Grothman (R-WI).
Last month, the White House announced a federal aid freeze, which threatened to halt government-issued aid across U.S. institutions, including universities. While the freeze was canceled after two days, government agencies are still tasked with finding ways to slice federal aid.
“There is so much happening, it’s hard to keep track of everything and the implications of what the current administration is trying to do,” Spencer said. “In the Act, there are some things that I think have bipartisan support — improving data collection and trying to provide more transparency for students — but don’t really get to a lot of the heart of the problems.”
Amanda Chen contributed reporting.
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