SBU 1-page impact statement regarding 2018 GOP “PROSPER” act
PROSPER Act will make college LESS accessible and LESS affordable for students
• As conveyed in the letter SBU President Sam Stanley sent to members of LI Delegation in, the PROSPER Act would make college less accessible and less affordable
• While there are a few positive provisions in the bill including maintaining the current funding structure of the Pell Grant program, adding a Pell Bonus, and doubling the authorization level of Federal Work Study to $1.72 billion, the legislation would nevertheless amount to a significant student aid cut jeopardizing access for the neediest students and exacerbating problems with rising levels of student debt
ELIMINATION OF SUBSIDIZED LOANS
• Subsidized loans aid those with the highest need (Working on SBU students specific impact numbers)
• An analysis by AAU of the proposal to eliminate subsidized interest for undergraduate students with financial need, even when coupled with the elimination of the origination fees, demonstrates that it would substantially add to the cost of borrowing.
o An undergraduate student who borrows $19,000 over four years and makes all payments on time would see a 44% increase in the cost of the loan. A student who attends for five years and borrows $23,000 would see a 56% increase.
ELIMINATION OF SUPPLEMENTAL EDUCATION OPPORTUNITY GRANTS (SEOG)
• SEOG requires that universities have “skin-in-the-game” by supplementing federal dollars, and is proven to boost completion rates for America’s neediest students.
• 1,100 SBU students are receiving approximately $640,000 in SEOG (2017-18)
o Of these, at most 40 students would be covered under the excelsior scholarship should they lose their SEOG
o Of these, 220 students are already receiving Federal Work Study and all off these students are receiving Pell (demonstrating they are most in need)
GRADUATE STUDENTS HIT HARD
• At a time when our economy demands a highly-skilled and educated workforce, the PROSPER Act is increasing costs for Grad students and eliminating critical aid programs
• Graduate Students will:
o Lose Federal Work-Study eligibility
190 SBU graduate students are receiving approximately $340,000 in FWS (2017-18). These students would have to turn to external sources to replace these funds.
o Face elimination of GRAD PLUS and face new student loan borrowing limits
o Face elimination of the Public Service Loan Forgiveness and the elimination of loan forgiveness through income-driven repayment plans
o Encounter a reduction in authorized funding for the Graduate Assistance in Areas of National Need (GAANN)
IMPACT ON SBU – LOSS OF SEOG & CHANGES TO THE FWS FORMULA
• An ACE analysis shows devastating impacts for institutions regarding loss of SEOG aid and proposed changes to the formula for FWS
• ACE projects SBU will lose $485,578 in combined FWS losses and SEOG losses in Year 1
• Those cuts continue to grow into devastating losses for SBU:
o In Year 6 of the implementation of these changes, SBU will have lost nearly $900,000 in combined FWS losses and SEOG losses (As per ACE analysis)
RETURN OF TITLE IV (RISK SHARING)
• Creates substantial institutional liabilities for the instances in which students do not complete their period of enrollment
• This policy would essentially drive many institutions to favor admission of students who are the least likely to dropout (Working on SBU specific impact numbers)
o As policymakers highlight real concerns about achievement gaps and income inequality, we should be working to make higher education more, not less accessible to low and middle-income families.
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More info:
https://www.cnbc.com/2018/01/25/gop-actions-may-make-graduate-school-too-costly-for-many.html