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 Trump Administration Releases FY 18 Budget Request 

5/24/2017

The Trump Administration yesterday released its FY 18 federal budget proposal, entitled A New Foundation for American Greatness. This is the President's first full budget request, following a spending outline or so-called "skinny budget" released earlier this spring. The budget includes deep cuts to federal investments in education, job training and other community college priorities.

The skinny budget only touched on annual appropriations (or discretionary spending), while the full budget also deals with entitlement programs, proposing substantial cuts to several safety net programs such as SNAP and Medicaid that support many community college students. Social security and Medicare, other large entitlements that represent a significant portion of the federal budget, are not cut.

The budget is just the first step in the long FY 18 budget and appropriations process. Final appropriations legislation will almost certainly differ greatly from what has been presented. Democrats and some Republicans will reject many of the proposed cuts, and under Senate rules any legislation implementing them will need 60 votes. However, with a Republican in the White House, Congressional Democrats are no longer backed by a veto threat to many proposed spending cuts, as was often the case under President Obama.

Overall, the budget would increase discretionary spending for defense and security programs by $54 billion in FY 18, offset by a $54 billion reduction in domestic programs. This overall budget policy is what has driven many of the proposed reductions.

The following are the details for key programs in the budget:

Department of Education

The budget proposes a $7.9 billion cut to the Department of Education (ED), a 12% reduction from current funding. It contains increases for private and public school choice programs, a top priority for Secretary of Education Betsy DeVos. The budget would maintain appropriations for the Pell Grant program (these fund a major portion, but not all of, the grants), but would cancel $3.9 billion, approximately 40%, of the current surplus. A cut to the surplus would potentially hasten the program's return to funding shortfalls and likely inhibit potential program improvements.

The budget also eliminates the Supplemental Educational Opportunity Grant (SEOG) program and cuts Federal Work Study nearly in half, from $990 million to $500 million. It also reduces TRIO and GEAR-UP funding. (No new GEAR UP grants would be funded.) Over 20 other smaller programs would be eliminated, including all international education programs.

Of the cuts not specified in the skinny budget, the most disappointing for community colleges are the reduction of the Perkins CTE State Grants by $168 million (15%), Adult Education State Grants by $96 million (16%) and the elimination of Title III-A of the HEA, the Strengthening Institutions program. CTE, in particular, has been highlighted by the Trump administration but the budget does not include commensurate resources. Title III-A is vital to dozens of under-resourced community colleges that serve economically disadvantaged students. Other Title III and the Title V Hispanic-Serving Institutions programs are level-funded or received small increases.

The administration has also proposed considerable changes to the student loan programs, including consolidation of the existing income-driven repayment plans, which AACC supports. The budget also calls for the elimination of Public Service Loan Forgiveness and Subsidized Stafford loans. The department calculates that its proposed changes to the loan programs would save $143 billion over ten years. Finally, the budget contains general language that seems to support the concept of risk-sharing whereby institutions would be partially liable for the loan defaults of their former students.

Department of Labor

Spending at the Department of Labor would be reduced by $2.5 billion, or 21%. The news for particular programs most important to community colleges is even worse. The formula programs authorized under the Workforce Innovation Opportunity Act were each cut severely. The dislocated worker state funds would be cut from just over $1 billion to $615 million, and national dislocated worker funds would shrink from $221 million to $117 million. Adult education and training would be downsized from $816 million to $490 million, and the youth funding stream would go from $873 million to $523 million. While these severe cuts are not entirely unexpected and will very likely be tamped down by Congress, they reflect overall priorities that are problematic for community colleges.

Apprenticeship grants, which were favorably noticed in the skinny budget, would decrease from $95 million to $90 million.

Other Notable Proposals

The budget would greatly reduce funding for the Department of State's Educational and Cultural Exchange programs. These resources would focus on sustaining the flagship Fulbright Program, with deep reductions or eliminations of other programs.

The Department of Commerce's Economic Development Administration and Manufacturing Extension Partnership programs would be eliminated. Community colleges participate in both initiatives. The Department of Energy would sustain a cut of $900 million to its Office of Science, which funds research programs that have benefited community colleges. Health professions and nursing training programs at the Department of Health and Human Services would be eliminated.

Many smaller, independent agencies are slated for elimination, including several that support community colleges. These include the National Endowments for the Arts and Humanities, the Corporation for National and Community Service, the Delta Regional Authority, and the Neighborhood Reinvestment Corporation.

AACC Position

AACC continues to believe that community colleges are fundamental to the nation's economic prosperity, and that targeted federal investments in these institutions and students are essential. The Association hopes that Congress will carefully review the proposals advanced by the Administration and adopt policies that reflect the critical federal role in helping aspiring students achieve a quality community college education. There is no substitute for this support.

Download AACC President Walter Bumphus' statement regarding the Trump Administration's FY 18 federal budget proposal.

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