President Obama’s fiscal year 2014 budget proposal is a mixed bag for students. The most important good news is that it fully funds Pell Grants, which help more than nine million students attend and complete college and reduce how much they need to borrow. Expanding access to work-study jobs and making the American Opportunity Tax Credit permanent will also help limit students’ need to borrow. The budget improves Income-Based Repayment (IBR) for all federal loan borrowers and prevents the taxation of debt forgiven through IBR and similar repayment plans. The budget also lowers the interest rates on federal loans for all students and parents who borrow this fall. Unfortunately, the proposal pays for some of this good news by letting interest rates rise steeply for students and families who borrow in the coming years.