Center for Responsible Lending
In releasing his first-ever federal budget blueprint, President Donald J. Trump stated that his intent was to “Make the Government lean and accountable to the people.” A review of its proposals, however, might be better characterized as “mean.”
Proposed cuts of $54 billion annually will demand a series of sacrifices from those who have the least to give: low and moderate income families. From disadvantaged youth served by Job Corps centers across the country, to senior citizens trying to cope with financial constraints in what should be their golden years, the Trump budget proposal harms far more Americans than it helps.
Over the next few weeks, this column will explore many of the proposed funding cuts identified in the March 16 document.
For example, education has historically been the bridge to a better quality of life. Yet, the FY18 budget proposal would widen economic divides for some and deepen societal divisions for others. Overall, the proposed funding reduction represents approximately 13 percent of the department’s current budget.
In response, both the Congressional Black Caucus and a diverse coalition of national and state organizations are standing up and speaking out. Education is proposed to lose $9 billion that includes $3.9 million from Pell Grants revenues that otherwise would have been carried over into FY18. Additionally, the popular Federal Work-Study program would remain, but only as a shadow of its former capacity – also due to more severe budget cuts.
On March 22, the CBC met with Trump at the White House. In comments to the Associated Press before the meeting, Rep. Cedric Richmond of Louisiana, the CBC chair said, “His budget is contrary to African American interests in a number of ways, and it’s our role as policymakers to call him out on it.”
The CBC also prepared for the meeting a 128-page document entitled We Have a Lot to Lose: Solutions to Advance Black Families in the 21st Century. In its executive summary, they wrote, “If President Trump is sincere in his interest in advancing the Black community, this document should be the guiding post of his administration.”
Addressing recommendations affecting many departments and agencies, the CBC report terms proposed FY18 funding levels for HBCUs as “an inadequate commitment.”
It was only a few weeks ago that HBCU presidents also had a high-profile White House meeting. It was touted as a new beginning to strengthen federal support for institutions that serve high percentages of minority students. Instead, the FY18 proposal would only continue at the current funding of $492 million.
The CBC report called for increased funding for HBCUs, Pell Grants and Title II that provide grants supporting local efforts to recruit and retain quality educators.
On the same day, more than 50 organizations, including Black and Latino civil rights groups along with consumer advocates, educators, labor, legal and veterans’ organizations, united in a letter to Congress that called for better stewardship from the Education Department.
“We believe protections for students and taxpayers should be strengthened, not scaled back. Veterans, low-income students and students of color have been disproportionately harmed by predatory colleges,” they wrote.
The Education Department’s budget blueprint would earmark $1.4 billion for school choice. [See chart at http://www.dallasexaminer.com.]
Beyond the proposed Education Department budget, private, for-profit career colleges have gained a regulatory reprieve, a reversal of a key rule promulgated by the Obama administration.
Secretary DeVos announced an extension for comments to be filed by career colleges on the gainful employment rule. This rule requires career colleges to provide skills and knowledge that enable students to repay their student loans. Education and consumer advocates pushed for a rule that would end the years of using taxpayer dollars to fund career education studies that did not deliver what was promised while enriching private firms with taxpayer dollars.
“The Department of Education’s decision to extend deadlines under this rule sends a signal to schools with poor performing programs that they may not be held accountable after all,” noted Robin Howarth, a senior researcher with the Center for Responsible Lending who specializes in student lending. “Any weakening or reversal of the gainful employment rule puts students’ financial well-being at risk and reverses the progress that has been made in safeguarding taxpayer dollars from funding programs that fail students repeatedly.”
In its letter to Congress, the education coalition also spoke to the importance of the gainful employment rule. “Delaying, weakening, or repealing the gainful employment rule would lead to a new race to the bottom as unscrupulous schools compete to enroll as many students as possible without regard to the quality of training, the student’s preparation, or the job prospects,” wrote the coalition.
Also during the Obama administration, departmental guidance ended fee collections from defaulted student loan borrowers. In recent days, DeVos took steps to begin fee collection again that can total up to 16 percent of a borrower’s loans – even if borrowers could fully repay their loans within 60 days.
“The student loan program exists to help students pay for their educations, not to trap them in debt,” said Whitney Barkley, a CRL policy counsel also specializing in student lending.
“Struggling student loan borrowers who enter a rehabilitation program within 60 days of default should be given the chance to make good on their payments, not hit with excessive fees,” Barkley added. “By allowing these fees to be collected, the Department has created a perverse incentive for student loan collectors, making borrowers in default more valuable than borrowers who are repaying their loans.”
For all of these reasons and more, I believe the American taxpayer deserves better from its federal government. Quality education is essential to our nation’s future.
The real bottom line: Every federal budget should help – not hurt – Americans.
Charlene Crowell is the communications deputy director with the Center for Responsible Lending. She can be reached at email@example.com.