Republican Plan to Slash Federal Student Loans Threatens Wisconsin
Half of state students could be hit by cuts to Pell Grants, student loans and more.
Graduation
Republican proposals to overhaul how families pay for college could affect nearly half of the students attending the Universities of Wisconsin and about 40 percent of students at the state’s private schools.
Draft legislation released last week by the House Committee on Education shows sweeping changes to the federal student loan system that would cut $330 billion in federal spending.
This includes changing repayment plans and cuts to the Pell Grant program for low-income students.
In 2024, 95,719 Wisconsin students received Pell Grants, according to the Education Data Initiative. The average Pell Grant awarded per recipient was $4,604
“What we’re seeing is a narrowing of the funnel for students coming from lower socioeconomic means, and that just means there is going to be fewer people who have the opportunity that prior generations had,” UW system President Jay Rothman said Monday in an interview with WPR. “This will reverberate across the board.”
Nearly half of the 164,400 students at Universities of Wisconsin schools rely on some form of federal aid.
On Friday, President Donald Trump also proposed wide-ranging cuts to federal higher education spending, including the elimination of work-study programs and Supplemental Educational Opportunity Grants, which assist undergraduate students who have “exceptional financial need.”
Eric Fulcomer, president and CEO of the Wisconsin Association of Independent Colleges and Universities, or WAICU, said all of the proposals are concerning because they affect the families who need financial assistance the most.
WAICU represents the 22 private, nonprofit institutions of higher education in the state. Fulcomer said about 20,000 of the 53,000 students who attend Wisconsin’s private colleges depend on federal financial aid.
Fulcomer believes if the proposed changes are enacted it will affect enrollment at Wisconsin colleges and universities.
“We’re already dealing with a declining population of high school graduates in the country and in Wisconsin,” Fulcomer said. “So, even without the federal challenges, we would be facing enrollment challenges. This just makes it worse. The problem is these financial aid cuts are going to affect the students who need it the most.”
Student loan changes being proposed include:
- Making several changes to Pell Grant awards and eligibility that would increase the threshold for “full-time” enrollment to 15 credit hours a semester, resulting in cuts in grant aid to students taking 12 credits.
- Eliminate Pell Grant eligibility for students enrolled at less than half-time, which often are working-class students.
- Limiting federal aid to the “median cost of college,” effectively establishing price controls on colleges and universities and forcing students to the private loan market.
- Capping graduate student borrowing at $100,000 for nonprofessional master’s degrees and $150,000 for professional degrees.
- Eliminating Grad PLUS loans and the in-school interest subsidy for undergraduates.
Because the House education committee proposal is part of a reconciliation package, Republicans need only a simple majority in the Senate — and a unified front in the House — to pass the proposed financial aid changes.
Rothman said it makes “no sense” to narrow the opportunities for students if the country wants to win the global war for talent.
Young men with a high school education who are working full time have median earnings of $45,000, compared to those with a college degree who earn $77,000 annually, according to a Pew Research Center Survey released in May 2024.
For women, those with a high school education earn $36,000 annually compared to college-educated women who earn $65,000, according to Pew.
“We just need to give them an opportunity so that we can make that educational opportunity available to them that will redound to all of our benefit in the long run,” Rothman said. “I think that’s what’s the most troubling to me, that we’re just taking a meat cleaver to these programs and not thinking about what impact they have on people and what impact they have on long-term economic vibrancy.”
Republican plan to overhaul the federal student loan system will affect more than half of Wisconsin students was originally published by Wisconsin Public Radio.
Every day of Frump Circus 2.0 I awake thinking to myself “how is sh*t-for-brains going to make lives more miserable today?”
He has yet to disappoint.