The National Association of Student Financial Aid Administrators has released an online tool that estimates the impact of proposed budget cuts from the White House on student financial aid. The Budget Effect Estimator tool is an “effort to help schools better understand the implications” of those proposed budget cuts, according to the NASFAA, but it can also provide students and their families (and financial advisors) with some perspective on the potential availability of student aid at individual schools.
“Imposing such draconian cuts would pull the rug out from under millions of students hoping to improve their lives through education … We encourage Congress to create a budget that will aid these students in their quest for the American Dream, and include adequate levels of support for all students pursuing a higher education.”
Congress hasn’t passed a budget bill yet, but a House budget resolution released last week calls for more than $236 billion in cuts to mandatory spending for education programs over 10 years, according to Inside Higher Ed, an online publication focused on higher education.
It notes that Congress could adopt some changes already included in the Trump budget, including the elimination of Public Service Loan Forgiveness, interest-free undergraduate loans and income-based loan repayment plans. The Trump budget also includes cuts in the Federal Work-Study (FWS) Program, Federal Supplemental Education Opportunity Grants and Federal Perkins Loans and proposes to eliminate the annual inflation adjustment to the Pell Grant maximum award.
Congress could potentially eliminate mandatory funding for Pell Grants, according to Inside Higher Ed.
The Budget Effect Estimator tool from NASFAA illustrates the impact of Trump budget cuts to student financial aid for individual schools as a whole and includes potential effects on individual students.
ThinkAdvisor used the tool on a number of schools including public and private colleges and universities and found that the losses for schools ranged from hundreds of thousands of dollars to tens of millions. That’s something students, parents and advisors could consider when looking at costs of individual schools and when comparing one school to another.
Students and families will, of course, need to file the Free Application for Federal Student Aid. After filing the FAFSA, they will learn the expected family contribution to pay for a particular school. The difference between the EFC and cost of the institution gives an idea about the potential student aid package but doesn’t guarantee that.
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