Students and financial aid experts are concerned about the future of federal financial aid after President Donald Trump released a preliminary federal budget last month.
The initial budget includes cuts to the surplus in the Pell Grant program and the elimination of protections for students who default on student loans and campus-based grants, which fund federal work study. While a majority of students do not receive Pell Grant scholarships, University leaders are attempting to recruit more economically diverse freshman classes – meaning more students would need the grants to cover tuition.
Laurie Koehler, the vice provost for enrollment management and retention, said in an email that it is too early to tell which parts of Trump’s budget will be passed and whether or not student aid will be affected.
“We will continue to closely monitor the proposed changes, as will the professional organizations of which we are a member, including the National Association of Student Financial Aid Administrators,” she said.
Koehler said the University has not received questions about the budget from alumni about student loan repayment, potentially because GW’s 1.3 percent default rate is much lower than the national average of 11.3 percent.
Koehler said concerned students should reach out to University counselors if they have questions about student aid.
“We seek to actively assist students and their families in understanding the financial implications associated with securing a GW education,” she said. “We recommend that students and families who have questions and who have a relationship with a particular counselor contact that same counselor for any follow-ups or new questions.”
More than 60 percent of students at GW receive financial aid, including grants, loans, scholarships and federal work study. About 1,550 students received Pell grants in 2015, according to government data.
Officials have prioritized creating programs and partnerships for a more diverse student body in recent years, like adopting a test-optional admissions policy and partnering with nonprofit groups like the Posse Foundation to bring in more economically, racially and geographically diverse students. But the threat of losing federal funds, designed for low-income students, could endanger programs that rely on financial aid to meet student need.
Donald Heller, the provost and vice president of academic affairs at the University of San Francisco, said cuts could create financial disadvantages for low income students because they rely on federal funds and federally funded programs to pursue higher education.
“Most of the programs slated for reduction or closure disproportionately benefit students from poor and moderate-income families, as well as students of color,” Heller said. “So these students could see their access to and success in persisting through college hampered by this budget.”
GW enrolled the most diverse freshman class in University history this academic year. The number of freshmen who receive Pell grants also increased, with 15 percent of the class receiving the grant compared to the previous year’s 13.8 percent.
David Feldman, a professor of economics at the College of William and Mary, said the Trump administration’s plan to eliminate excess Pell grant money would not affect current Pell recipients, but that the cuts may make it less likely that the surplus of federal money would be spent on low-income students.
“People had ideas for how to use that surplus to raise Pell spending, and one of those ideas was to restore year-round support so students could use Pell money for summer school,” Feldman said. “Those ideas may be harder to realize if the current Pell surplus is reallocated elsewhere.”
Jennifer Delaney, an associate professor of education policy, organization and leadership at the University of Illinois at Urbana Champaign, said that if the federal funds are pulled, individual universities would have to rely on philanthropy and their own funds to fill in the gap.
“For institutions, this could mean that there would be a need to put up more institutional dollars to fit in the gaps left by Pell,” she said. “So anything that was lost by Pell or any other program would need to be filled in by institutional funds because – especially being at GW – there is no state program.”
She added that financial aid officers usually stack the different types of aid in a certain order depending on need and said that cuts would likely affect the neediest students most. Federal and state aid is given out first and then other options, like grants, scholarships and loans, are used to address remaining unmet needs, she said.
“Institutions would have a burden of doing increased discounting and finding other revenue streams or other scholarships that they can tap into or the students themselves have to pick out,” Delaney said.