What's Next in the Budget Debate ?
A bi-partisan committee has been established in Congress with the goal to identify an additional $1.2 in budget cuts by Thanksgiving. The Committee announced on November 21, 2011 that they failed to reach an agreement on how to make these budget cuts.
- Cuts Already Made to Federal Aid Programs for the 2011-2012 Academic Year
- House's Draft FY2012 Spending Bill Would Restrict Pell Eligibility
- Suddenly Ineligible (October 10, 2011)
While we do not know what Congress will do, this page outlines ideas that have been proposed by various lawmakers. We want to encourage the Loyola community to closely follow this debate and voice their opinions to their elected representatives.
- Eliminate the "Administrative Cost Allowance" that schools receive for administering federal financial aid programs.
- The Vital Role of Administrative Cost Allowances to the Student Financial Aid Office - The Administrative Cost Allowance for the Federal Pell Grant Program is $5 per recipient. (NOTE: As of June 21, 2011, 905 Loyola University students had been awarded Pell Grant funds for the 2010-2011 year ).
- Eliminate the interest subsidy on federal direct stafford loans for undergraduates - As part of the Budget Control Act, Congress eliminated the interest subsidy for students in graduate and professional degree programs.
- Senate Budget Would Preserve Pell - A Senate subcommittee on September 20, 2011 approved a budget for the Education Department in fiscal year 2012 that would again preserve the maximum Pell Grant at $5,550 -- this time at the expense of subsidized interest on undergraduate student loans during a six-month period after students leave college.
- Statement in response to Representative Cantor’s reported proposal to eliminate the in-school interest subsidy on federal student loans
- The Cost of Eliminating the Interest Subsidy on Federal Student Loans (November 9, 2011)
- Change the Interest Rate Charged on Federal Student Loans - The College Cost Reduction and Access Act (H.R. 2669) cut interest rates on subsidized Stafford loans for undergraduate students in between the 2008-2009 and the 2011-2012 academic years. (Interest rates for subsidized Stafford Loans are scheduled to increase to 6.8% in the 2012-2013 academic year)
- Eliminate Current Tax Breaks for Education Expenses - the American Opportunity Tax Credit Program was originally created for the 2009 and 2010 tax years. To continue making college affordable for millions of students, the President signed an extension of the AOTC (to tax years 2011 and 2012) into law as part of the Tax Relief, Unemployment Reauthorization and Job Creation Act of 2010.
- Change the Federal "Campus-Based" Aid Programs - Funding for these programs is authorized through 2014.
- Eliminate Funding for the Federal Supplemental Educational Opportunity Program - The "SEOG" Program provides additional support to undergraduates who are also eligible for Federal Pell Grants.
- Proposed Re-design of the Federal Perkins Loan Program - The Federal Perkins Loan program is a low interest (5% ) loan for both undergraduate and graduate students with financial need. The school is the lender. The loan is made with government funds that the government annually contributes to the school's account along with loan funds in repayment. Borrowers repay this loan to the school. This program used to known as the "National Direct Student Loan Program"("NDSL").
Updated November 22, 2011