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CHAIRMAN PRICE’S BUDGET HURTS STUDENTS AND EDUCATION
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It fails to raise the Fiscal Year (FY) 2016 sequester level cap for nondefense discretionary
spending. Since the FY 16 sequester cap is virtually the same as the FY 15 cap, that makes it
virtually impossible to provide additional needed investments in education from early learning
through higher education. The President’s budget proposed critical investments including a $1.5
billion increase for Head Start, tripling Preschool Development Grants to $750 million, a $1
billion increase for Title I funds for high-poverty schools, and a $175 million increase for IDEA
special education grants to states.
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Starting in FY 2017, it cuts the NDD cap below the sequester level cap each year, for a total cut
of $759 billion (-13.8%). By FY 2025, the NDD level would be 19.1 percent below the projected
sequester cap. Slashing the cap will almost certainly result in cuts to Title I, IDEA, Pell grants,
Head Start, TRIO, Campus-based aid, Impact Aid, after school and other critical education
programs.

It freezes the maximum Pell grant at its FY 15 level for the next ten years, further eroding its
purchasing power, making it more difficult for low- and middle-income students to afford
college.
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It eliminates all mandatory funding for Pell grants, cutting Pell funding by $89.3 billion.
Currently mandatory dollars both fund an increase in the Pell maximum award above $4,860, as
well as help fund a portion of the $4,860 maximum. While the budget assumes these costs will
be picked up on the discretionary side of the budget, that is virtually impossible since as noted
above the budget slashes NDD funding. Thus, the Pell maximum could be chopped from $5,775
to $4,860 – a cut of $915 or 15.8 percent.

It eliminates in-school interest subsidies for undergraduate need-based Stafford loans. Doing
so shifts $34.8 billion onto the backs of students by increasing their loan payments.

It eliminates public sector loan forgiveness. This shifts another $10.5 billion onto the backs of
students and will discourage individuals from entering public service careers including in
education, public health, law enforcement, public interest law, and libraries.

It eliminates recent expansions of Income-based repayments for student loans. This shifts yet
another $16.3 billion onto the backs of student loan borrowers.

In total, it cuts student aid by $150 billion, simply making college less affordable and
accessible for low- and middle-income students. These proposed cuts come on top of $79
billion in cuts to Pell grants and student loans that have been enacted since 2011.
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It requires the Congressional Budget Office to utilize Fair Value Accounting when scoring
student loans. Doing so simply makes student loans appear more costly to the federal
government, creating pressures to further cut student aid or other programs to reduce the
higher cost.