2018 Education Assistance Program Outlook - Part 2
Federal Supplemental Educational Opportunity Grant (FSEOG)
Federal Supplemental Educational Opportunity Grants (FSEOGs) support students with exceptional financial need. Unfortunately, not all schools and colleges participate in this funding program. Students should check with their school or college’s financial aid office to see if it offers FSEOGs.
Participating schools and colleges receive funds from the U.S. Department of Education’s office of Federal Student Aid, which they distribute to students through the FSEOG program. Once each school has allocated all the available FSEOG funds that year, they cannot receive more, so students looking to take advantage of this funding need to apply as early as possible. Each colleges’ deadline for FSEOG applications is different. Students can find out when the deadline for a particular establishment is by checking its official website or asking in its financial aid office.
Students must complete and submit the FAFSA form before they can be considered for an FSEOG grant. Depending on their financial need, students can receive anywhere from $100 to $4,000 a year. The final figure will depend on factors such as their financial circumstances, the amount of other financial support they receive, and the availability of funds at the school/college.
The White House budget proposal eliminates all funding for the FSEOG, closing the program. The House version of the budget continues funding at current levels.
Federal Work-Study Program
The Federal Work-Study Program (FWS) provides funds to around 3,400 institutions of higher education to support part-time employment for needy students. Jobs must pay at least minimum wage, and the institution or employer typically supplies half the funding. Students work for the institution, for nearby government agencies, or for non-profit groups. Many work-study jobs involve community services such as tutoring, literacy services, or emergency preparedness and response. The FAFSA is required for applicants.
The White House budget proposal cuts work-study funds by 50%, a substantial reduction that would severely reduce opportunities. The House version of the budget continues funding at current levels.
Government Loans: A New Picture
The government-subsidized student loans that so many students rely on to cover education expenses are also up for a new range of cuts and restrictions. The $700 million Perkins Loan program, which was up for renewal, will be allowed to expire. These loans will no longer be available. Public Service Loan Forgiveness, which forgave student loans after fixed periods for workers in some public service fields, will be allowed to expire. Older loans will not be affected, but this option will not be available to current borrowers. The subsidized Stafford Loan program will also expire, and no new loans will be granted under this program.
Loan repayment programs will be simplified. Borrowers used to be able to choose among four repayment plans, which many found unclear and unnecessarily complex. The simplification has long been recommended, but monthly payments will rise from 10 percent to 12.5 percent of the borrower’s discretionary income, so paying student loans will become even more of a challenge.
As with any budget discussion, these proposals are far from established. A final budget will have to be established by the House and the Senate and ratified by the President, and the current proposals may see substantial changes. Still, the proposals can be seen as a statement of intent, and the intent is clearly to reduce federal support for higher education. If that reduction happens, current and prospective students and their families will be affected. If college matters to you, keep track of the evolving discussion and be sure to contact your representatives and let them know how you feel!