Trump's War on College Kids

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Donald Trump didn't speak too much on the subject of college during his 2016 presidential campaign. When prompted, he recognized that colleges had become too expensive and that student loan debt represented a genuine economic threat. These marked two exceedingly rare occasions, those in which the candidate spoke accurately and factually on a subject.

That's where his empathy for the next generation of college-bound kids ended though. On his campaign website, Trump listed among his educational priorities the intent to “Ensure that the opportunity to attend a two or four-year college, or to pursue a trade or a skill set through vocational and technical education, will be easier to access, pay for, and finish.”

Compare this language to the terms of budget proposal released by the White House in March of 2017. A stark contrast emerges between the candidate's stated intent and the president's agenda. Indeed, outside of massive increases for military spending, immigration enforcement, and the construction of a wall along America's southern boarder with Mexico, Trump's budget is a colorful pastiche of public funding decreases that include painful cuts in programs benefiting student borrowers, particularly low-income borrowers.

In March of 2017, the Trump Administration released “America First: A Budget Blueprint to Make America Great Again.” Among the key strategies for Making America Great Again are a $15.1 billion (17.9%) cut to Health and Human Services; a $6.2 billion (13.2%) cut to Housing and Urban Development; $2.4 billion (13%) cut to the Department of Transportation; and a devastating 31% cut ($2.6 bn), from the Environmental Protection Agency.

Also on the chopping block? $9 billion in funding slashed from the Department of Education, or a 13% single-year cut. According to Trump's "Blueprint," student borrowers will shoulder a hefty portion of that cut.

During the tumultuous 2016 Presidential Election, Hillary Clinton dominated with voters between the ages of 18 and 24, winning by a margin of 21% according to USA Today exit polling. Millennials were right not to trust Donald Trump. The real estate tycoon pledged that as president he would treat the United States government like one big business. If the philosophical imperative is to run government like a corporation, loaning money to students for college has been a poor investment.

One way to improve upon this investment might be to strengthen the quality of the investment itself. Another way might be to lower the cost of the investment. Yet another way might be to simply cut the least fortunate of Americans out of this investment. That, evidence suggests, is the approach the Trump Administration has chosen.

The Trump spending bill places low-income college aspirants directly in its crosshairs.

Let's take a quick look at some of the cuts that the Trump budget proposes and how they might impact opportunities for the current generation of students. If passed in its current form, the Trump budget would:

Eliminate the Federal Supplemental Educational Opportunity Grant (FSEOG)

The administration has said that the federal government would save roughly $732 million by dismantling a program which is based on a combination of financial need and available funding from a chosen college or university. The budget claims that the FSEOG is a “less well-targeted way to deliver need-based aid than the Pell Grant program.”

Reduce Pell Grant Funding by $3.9 Billion

So what about Pell Grants, then? The budget proposal says that the best way to “safeguard” the program is to cut $3.9 billion worth of annual funding. According to the National Center for Education Statistics, the Pell Grant program is the single largest federal grant program.

Unlike other government-funded loans for college, the Pell Grant is one that the borrower is not required to repay. This sum is largely set aside so that low-income families have the chance to send their children to college. At $28.2 billion spent on Pell grants in the 2015-2016 academic year, it is the single largest expense bore by the U.S. Department of Education. U.S.A. Today reports that this expenditure is largely justified by need. The article points to schools like New Mexico State University and Texas A&M, two institutions where 80% or more of the student body received Pell Grants during the 2014-2015 school year.

Cuts in this area place the onus of budget-balancing on the lowest-income families, an outcome which would appear to stand in direct contradiction to Trump's pledges on education during the campaign.

Reduce Federal Work-Study

The proposal would see a reduction in the allocation of funds for work-study programs, which match students with on-campus jobs to help offset the cost of their higher education. The goal behind this cut, says the budget proposal, is to reform "the poorly-targeted allocation to ensure funds go to undergraduate students who would benefit most.” According to Forbes, the cuts to federal work-study opportunities would likely amount to $487 billion.

Reduce Funding for Federal TRIO and GEAR UP Programs

These programs offer an array of services designed to improve the prospects of college attendance for disadvantaged individuals. The Trump cuts would take $193 million from the program's beneficiaries.

End Debt Forgiveness

2007 saw the establishment of a Public Service Loan Forgiveness program that “forgives federal student loans for borrowers who are employed full-time (more than 30 hours per week) in an eligible federal, state or local public service job or 501(c)(3) non-profit job who make 120 eligible on-time payments over 10 years.”

More than 550,000 borrowers have signed up for the program and the first of them will be eligible for forgiveness this year. Those who have been counting down the days to forgiveness may have the rug pulled out from under them just on the cusp of completing their obligations. According to Forbes, Secretary of Education Betsy DeVos issued a legal filing in March of 2017, indicating that “student loan borrowers could not rely on approval letters for Public Service Loan Forgiveness sent by the program's administrator, FedLoan Servicing, because any approvals are considered tentative.”

This seems to imply that even those already approved for the program stand to lose their eligibility under Trump-era rules. Further, this would appear to be the opening assault on a forgiveness program ultimately targeted for total elimination.

According to U.S. News and World Report, eliminating this program would save the government an estimated $859 million.

These were the details of likely budget cuts in a condensed version of Trump's proposal as released in March. But two months later, in May, details of a fuller proposal leaked, and with them came evidence of even steeper cuts for aspiring college kids. Among them, the budget would:

Allow the Perkins Loan Program to Expire

According to Inside Higher Ed, the Trump Administration would decline to renew a program that allows students to secure loans directly through their college of choice. This cut would save the federal government an estimated million.

Eliminate Subsidized Student Loans

Details from the May 2017 budget proposal indicate an intent to eliminate subsidized student loans as well. According to the Congressional Budget Office, the federal government could save roughly $26.8 billion over 10 years by eliminating the subsidized lending, in which the federal government pays the interest cost for certain student loans for as long as the borrower is in school.

The Big Picture

Naturally, ending federal subsidies on student loans would only further grow the massive sum of collective student debt, further deepen the crisis of debt-to-earnings facing most new graduates, and almost certainly increase the number of student borrowers who default on their loans. But hey, that reduction across ten years would offset nearly half of the increase in defense-spending for just fiscal year 2018.

If this seems like a non sequitur, take the time to truly peruse the details of Trump's Budget Blueprint. There is an inextricable correlation between massive funding cuts to all public service dimensions of our federal government and even more massive increases in funding for defense and immigration enforcement. Most problematic of correlations is that between these spending cuts and a host of tax benefits that will be enjoyed by only the wealthiest Americans.

Indeed, the devastating cuts to various programs benefiting college aspirants would offset only the slimmest margin of the $5.5 trillion in tax cuts proposed for America's corporations and wealthiest private citizens.

The point is, under the terms of this budget proposal, college kids will now undertake the patriotic duty of helping to fund a defense budget which already triples the amount spent by the next closest nation and a tax cut that improves fortunes for people that can afford to buy their very own colleges.

Like most of this president's intended legislative gestures, the budget proposal is merely theoretical. In practical reality, even a deeply partisan Congress would be hard-pressed to sell such severe cuts to the American public. According to Insider Higher Ed:

"When the White House proposed reductions in spending midyear, that was a nonstarter for congressional appropriators," said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators. He said he's less confident about the next funding cycle.

"I have a hard time believing lawmakers could pick all of these cuts up," Draeger said. "But it sort of sets the playing field. It provides a menu for potential cuts for Congress if they're so inclined."

For now, the federal budget merely extends already existing spending allocations, a compromise reached by Congress as it figures out how to manage the president's poorly conceived expectations. But this is a battleground that will be revisited in the war over 2018's fiscal budget.

As we approach this war, the details of the Trump budget proposal send a pretty clear message to student borrowers, low income families and the Millennial generation as a whole. Prepare for a fight. You are under attack.

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