The GOP budget plan may not have a realistic chance of passing in the Senate, but if it did the repercussions for students could be devastating.
The plan, proposed by Wisconsin Rep. Paul Ryan, includes cuts to federal Pell Grants, work study and subsidized loan funding.
“Based on the information I have, the typical student in Idaho would see a decrease in their Pell Grant of $880 dollars and then not any increases,” said Dan Davenport, director of UI student financial aid. “There are scheduled increases out there now, but the fall would be from the current levels.”
Based on an estimate of 4,300 students with Pell Grant funding, the plan would mean a loss of more than $38 million in .student financial aid.
“For most students, there will not be an option to make that up,” Davenport said. “It would be pretty devastating.”
The bill would also eliminate subsidizing for federal loans while students are still in school.
“For a student with an average of $23,000 debt over a 10-year repayment, the student would pay an additional $13,000 in interest gathering while still in school,” Davenport said. “That’s about a 49 percent increase in repayments.”
Work study jobs would also face cuts.
“For Idaho about 370 jobs would be cut,” Davenport said. “If I assume we have 20 percent of work study jobs in Idaho that would be a loss of 75 work study jobs.”
Davenport said he does not know the chances of the bill passing, but it would devastate students who rely on federal funding.
“I’ve heard people say the Senate won’t even take it, but you never know what will happen these days,” Davenport said.
In addition to cuts affecting college students, the plan proposes cuts amounting to $5.3 trillion below President Obama’s budget.
Medicare would face reductions of $205 billion, while Medicaid and other health programs would have $770 billion in cuts. Welfare, including food stamps, transportation and agriculture subsidies would face $2 trillion in cuts.
Along with cuts, Medicare would be changed into subsidized private insurance plans, and the current health care law would be repealed.
The tax code would also see a change. Ryan proposed eliminating the current six income tax rates — which range from 10 percent to 35 percent — and replacing them with two at 10 percent and 25 percent.
The bill also cancels a scheduled $55 billion cut in the Pentagon budget, targeted at defense spending.
Katy Sword can be reached at [email protected]