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Three ways the Trump budget could affect UO students; U.S. Senator Ron Wyden weighs in



The day the Trump Administration released the 2018 fiscal year budget proposal, U.S. Senator Ron Wyden tweeted a picture of a copy in the recycling bin. The tweet stated, “This is where the #TrumpBudget belongs.”

The proposal aims to cut 13.5 percent of the federal education budget. Cuts will affect college students not just at the University of Oregon, but across the country. The proposal stops student loan forgiveness from the federal government and it condenses all student loans through one company, creating a monopoly. This would leave them without options when it comes to their loans; students currently have nine companies to choose from.

But Wyden has been fighting against this budget proposal in Washington, D.C., understanding that if the budget were to go through — the proposal still needs to get through Congress before it can become a law — then it could impact students and their families for years to come.

“I think it is going to hurt the students who come from families who are every month walking an economic tightrope,” Wyden said in an interview with The Emerald. “This budget looks and feels like a budget written by people that think that working families have it too easy.”

A new budget proposal comes with lengthy terminology that separates college students from understanding how a budget could affect them. Here are three ways the Trump budget could affect UO students:

1) The student aid programs would fade out

The budget proposal cuts into many grants that students in financial need rely on, the Federal Supplemental Education Opportunity Grant, or FSEOG. It’s a campus-based aid program that gets a federal government allotment, and each institution gets an allocation.

Jim Brooks, director of UO Financial Aid and Scholarships, said the university receives over a million dollars annually from the FSEOG, and it’s remained that way for about five years.

“That is grant money that goes to the neediest students, so obviously that is a loss. It’s not a huge amount of money; but for needy students, it’s money. The elimination of [FSEOG] means that program is gone just right off the top, so our students would feel an impact from that.”

Along with the FSEOG, another program that’s facing cuts is the Pell Grant, a grant that’s given to students with financial need who haven’t earned their bachelor’s degree.

According to Wyden, the Trump Administration aims to eliminate around $4 billion from the Pell Grant, which would harm around 1.5 million students in the U.S.

“Pell Grant said that [if] you’re going to work hard and stick to the rules, you’re going to get a chance to get an education that can open a lot of doors for you,” said Wyden. “All of a sudden comes this new administration that says we’re going to take $3.9 billion away from Pell Grants.”  

2) Cuts to public service loan forgiveness

Part of the budget proposal is the phasing out of public service loan forgiveness, a 10-year program that helps students work off their student loans while working in fields provided by the government. Many students will seek out government jobs after college to see their loans forgiven in 10 years through the program.

“Getting rid of public service loan forgiveness is another just really cockeyed idea because it discourages young people from being members of the military, law enforcement, social workers, doctors; the list goes on and on,” said Wyden.  

The university itself is a 501(c)(3), meaning that none of the funds end up in the hands of a private shareholder or individual, and it also qualifies as an employer for public service loan forgiveness.

“We actually have individuals on this campus who signed up for public service loan forgiveness and who are looking forward to those benefits,” said Brooks. “As long as they grandfather in the people that are in it, they would still benefit. It would be everybody else that would want to get in, in the future, who would lose out on that option. If they were to kill the program, but not do any grandfathering, that would upset a lot of people.”  

The Emerald talked to two UO employees last month who are relying on the loan forgiveness program to ease their debt. Both said they fear the program may be cut; it would prevent them from buying houses.

3) Federal government’s choice to stop subsidizing student loans

The choice to stop subsidizing student loans would add thousands of dollars to the cost of college, impacting low-income students more directly since they would have a large piece of interest added to their loans. This could keep them from getting started in their lives post-college.

Betsy Boyd, the associate vice president for federal affairs, said that half of UO students graduate with debt. She also said the average debt is about $24,000, but that’s typical compared to other universities.

“That means that it will cost students an extra $4,000 to $5,000 because their student loans will accrue interest the entire time they’re in school,” Boyd said. “This would not be the first time that Congress has looked at ways to reduce borrower benefits.”

Both Boyd and Wyden said the effect would directly impact the students who have a hard time making ends meet financially when they come to college. When they get out they would only see that their debt came with interest.

Wyden said that unsubsidized loans “makes college significantly more expensive, and it reduces the opportunities to get the kind of education and skills that are absolutely key to getting a good paying job in a significantly globalized economy.”

While the budget proposal does suggest a simplification of student loan repayment plans that has seen bipartisan support, there’s a risk that it could become a monopoly if they’re handled by only one company. This has been suggested recently by the Secretary of Education, Betsy DeVos. However, not everyone approves of this and there’s fear that it could create a situation where a company becomes too powerful with that much responsibility.

Wyden said he wants Oregonians to know that he is going to push back against the proposal.

“If the Trump Administration early on in the president’s term can do this, you’ve got to ask, ‘What’s next?’” Wyden said. “It won’t be pretty; I can tell you that.”

Follow Erin Carey on Twitter: @elcarey


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Erin Carey

Erin Carey

Erin Carey is a Senior Reporter, majoring in Journalism and minoring in Comparative Literature. She loves coffee, hockey and telling visitors at the Oregon Zoo random facts about the animals.