Saint Leo's financial literacy expert explains what's happening with the federal budget and why college students need to be concerned.

By Amanda Black,
Associate Director of Communication and Financial Literacy

Could you use another grant or scholarship?

How about an affordable federal loan to help cover educational expenses?

Even though most college students would answer these questions with a loud yes, Congress is actually trying to reduce financial aid – not increase it.

During the past five years, Congress has cut $30 billion in student aid funding and millions of students have been kicked out of the Pell Grant Program. Now Congress is proposing another $150 billion in cuts over the next 10 years.

U.S. House budget agreement

Recently, the U.S. House of Representatives passed a fiscal budget proposal for 2016 that would lock in sequester-level funding, significantly reducing federal funding for higher education.

Specifically, the budget would limit Pell Grants to $5,775 per academic year for the next 10 years. In addition, subsidized federal student loans would be eliminated.

This means that students would have to pay interest on all federal loans while enrolled in school. It's estimated this could cost students (on average) $3,800 more a year to borrow funds.

Implications of House budget proposal

The proposed cuts are intended to mitigate budget shortfalls. However, doing so could come at a steep price for college students and their families. Some fear that cutting back on federal financial aid will push students to borrow more private loans. These loans have much higher interest rates and harsher repayment terms; they are not ideal for students struggling financially (as many are). Others speculate that stagnant Pell Grant amounts will prevent students from being able to afford school. Some may not be able to finish their degrees, while others may not even be able to enroll in the first place.

While this budget sets the tone for cutting student aid funding in the appropriations process this summer and budget deals this fall, there is hope.

Before the federal budget goes into effect – possibly freezing Pell Grant amounts and discontinuing subsidized loans – the bill must pass several committees, debates, and rewrites.

That means that there is time for all citizens – and college students, in particular – to take action.

The federal budget process

The creation of a federal budget is a complicated process. Here are the basics greatly simplified.

  1. Each February, the president requests a budget from Congress for the coming fiscal year.
  2. The House of Representatives Budget Committee and the Senate Budget Committee each draft a budget resolution. (A budget resolution can be viewed as a blueprint for spending and taxes.)
  3. In both the House and the Senate, Appropriations subcommittees review, research, and write a first draft of the appropriations bill. Once the bill is worked out, the subcommittees send it to the full Appropriations Committee (of their respective chamber). If approved, from there the House Appropriations Committees and the Senate Appropriations Committee pass the bill up to their respective chamber for consideration.
  4. The House of Representatives and the Senate then debate and eventually vote on their chamber's version of the bill.
  5. Once each chamber has its version of the bill finalized, a conference committee forms to hammer out any differences between the House bill version and the Senate bill version. (The conference committee includes members from both sides of the House.) Once a reconciled version of the bill is decided upon, it is sent up again to both the House and the Senate for a vote. (Both chambers vote on the same, agreed upon bill.) Once the bill passes both chambers, Congress finally sends it to the president.
  6. In order for the bill to pass, the president must sign it. The Federal Budget consists of 12 appropriations bills. One of these is the Labor, Health and Human Services, and Education appropriations bill which dictates financial aid spending.

What you can do now to save federal aid

If you think Congress should back off financial aid, there are steps you can take to make make your opinion known.

Learn more about this issue and sign a statement of support by visiting the Rally Congress webpage.

The Student Aid Alliance is a coalition of 77 higher education organizations working to secure and expand federal student aid programs. Their campaign – Save Student Aid – aims to protect student aid funding and urge legislators to stop the attack on federal student aid.

Write, email or call your representatives in Congress.

If you have not already contacted Congress, use the links below to send a message to the members of your Congressional delegation through the Saint Leo University Legislative Portal and let them know how you feel about the proposed cuts. You can use the prepared messages, edit them, or write your own.

Contact members of the House. Contact your Senators. Register for an account.


Voting is key to enacting change. It is imperative that you participate in elections and vote for individuals that represent your personal interests. By casting a vote, you are telling elected officials what is important to you – be it issues concerning higher education, health care reform, public safety, or other critical concerns.

You can make a difference

We are all busy attending school, working full time jobs, raising kids, managing households – the list goes on. However, if we do not take time to learn about and vote on the issues that affect us, policy and legislation will not be enacted for our benefit. Instead, laws and change will be geared toward other interest groups – those who vocalize their needs and actively participate in democracy.

Do not forfeit your power to make a change – always cast a vote and make your voice heard.

A Certified Educator in Personal Finance®, Amanda Black is passionate about promoting financial literacy and helping student loan borrowers responsibly manage their debt. When she is not at work, Amanda enjoys jogging, sharing a glass of wine with friends, and traveling with her husband. Reach her at 800.240.7658 or

Other posts you may be interested in reading:

How To Afford College As An Adult

6 Tips For Mastering Student Loan Debt

Paying For College: A Scholarship Guide For Adult Learners

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