Press Release/Statement | April 20, 2023

TICAS Statement on Speaker McCarthy’s Debt Ceiling Proposal

Author: Statement of Sameer Gadkaree

“Speaker McCarthy’s debt ceiling proposal would make college more expensive and increase student debt burdens for millions of borrowers.

“According to an Education Department analysis, the proposal would decimate the Pell Grant program — which has long enjoyed strong bipartisan support — by cutting off Pell access for 80,000 students and reducing the maximum award by nearly $1,000 for another 6.6 million students. Pell Grants are extremely well targeted to students with very high financial need: 80 percent of Pell recipients come from families with annual incomes at or below $40,000, including 40 percent with annual family incomes at or below $15,000.

“These drastic cuts would be devastating for communities across the nation, including communities of color: nearly 60 percent of Black students, nearly 50 percent of Latino students, 50 percent of American Indian students, and 50 percent of Alaska Native students receive a Pell Grant each year.

“The proposal would also claw back critical student loan relief to millions of borrowers and block long-overdue reforms to the student loan repayment system. Further, the proposal would make $468 million in cuts to the Department and severely limit its ability to administer student aid programs during the resumption of student loan payments, causing longer wait times and reduced staffing when borrowers can least afford it. In addition, this cut to Department resources could expose taxpayers to potential fraud by hindering oversight of more than 5,500 schools and making key regulations harder to enforce.

“TICAS is disheartened that this budget proposal shifts the burden of rising college costs onto students and taxpayers, hinders the Department’s ability to manage loan repayment, and does not offer serious solutions to make college more affordable and accessible for all Americans.

“TICAS has long advocated for bipartisan and bicameral solutions that address challenges in higher education, including rising student debt, increasing college costs, and continuing inequities in college access and economic mobility. We look forward to further conversations with lawmakers from both parties and chambers to advance college affordability and reduce student debt.”