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Department of Education

STUDENT AID OVERVIEW

Fiscal Year 2018 Budget Request

CONTENTS

Page

Federal Student Aid Programs ................................................................................................N-1

Student Aid Reform Proposals ................................................................................................N-3

Student Aid Programs Output Measures.................................................................................N-5

Program Performance Information ..........................................................................................N-7
STUDENT AID OVERVIEW

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Federal Student Aid Programs

(Higher Education Act of 1965, Title IV)

(dollars in thousands)

FY 2018 Authorization: Indefinite

Budget Authority:

Period of fund availability: 

2017

Ann. CR Footnote

2017

Appropriation 2018 Footnote

Change

from Ann. CRFootnote

Grants and Work Study:

Pell Grants

Pell GrantDiscretionary funding $22,432,626 $22,475,352 $22,432,626 0

Pell GrantMandatory funding 7,897,6761 7,950,6761 7,055,0001-842,676

Subtotal, Pell Grants 30,330,302 30,426,028 29,487,626 -842,676

Federal Supplemental 

Educational Opportunity 

Grants 731,736 733,130 0 -731,736

Federal Work Study 987,847 989,728 500,000 -487,847

Iraq and Afghanistan Service 

Grants 442 442 499 57

TEACH Grants2 153,3423 153,3423 24,5723 -128,770

Total, Grants and Work-Study 1,873,367 1,876,642 525,071 -1,209,884

NOTE: Table reflects discretionary and mandatory funding.

1 Amounts appropriated for Pell Grants for 2017 and 2018 include mandatory funding provided in the 

Higher Education Act, as amended, to fund both the base maximum award and add-on award.

2 TEACH Grants is operated as a credit program. Amounts reflect the new loan subsidy, or the net 

present value of estimated future costs.

3 The FY 2017 amount includes a net upward reestimate of $138.4 million due primarily to assumptions 

pertaining to the number of grants that will convert to loans. The amount for FY 2018 reflects new loan 

subsidy. 
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Period of fund availability: 

2017

Ann. CR Footnote

2017

Appropriation 2018 Footnote

Change

from Ann. CR Footnote

Net Loan Subsidy, Loans1

Federal Family Education Loans 

(FFEL) 10,785,8342 10,785,8342 -443,4093 -11,229,243

Federal Direct Student Loans 26,833,498426,833,4984 -10,662,798 -37,496,296

NOTE: Table reflects discretionary and mandatory funding.

1 Total net subsidy in any fiscal year reflects the estimated net cost of the loan program for that fiscal 

year. It includes both positive and negative subsidies and upward and downward impacts of re-estimates 

and modifications of existing loans. A negative subsidy occurs when the present value of cash inflows to 

the Government is estimated to exceed the present value of cash outflows. Negative subsidy is reported 

(as negative outlays) to a negative subsidy receipt account.

2 Budget authority for FFEL does not include the FFEL Liquidating account. Amount for 2017 reflects a 

net upward reestimate of $10,785,834 thousand due to revised assumptions related to collection 

activities. This amount also includes ECASLA reestimates.

3 The 2018 amount includes a modification to reflect the policy proposal to eliminate Account 

Maintenance Fees.

4 Amount for 2017 includes a net upward reestimate of $28,430,232 thousand, primarily due to revised 

assumptions related to collection activities and increased participation in income-driven repayment plans.

A modification of $364,394 thousand is also included to reflect new closed school regulations.

FY 2018 BUDGET PROPOSAL

The Federal student aid programs provide grant, loan, and work-study assistance to help 

students afford a postsecondary education and find employment, which is one of the most

important investments America can make in its future. These funds enable millions of 

Americans to obtain the significant and lifelong benefits of a higher education. The fiscal year

(FY) 2018 Budget for the Federal student aid programs focuses on simplifying funding for 

college, while continuing to help make college more affordable. These proposals address 

student debt by simplifying student loan repayment and redirecting inefficiencies in the student 

loan program to prioritize expedited debt relief for undergraduate borrowers. The Budget also 

signals a commitment to working with Congress to develop a proposal to hold institutions of 

higher education responsible for their use of taxpayer dollars. In addition, the Administration 

supports incentives that will help students to accelerate progress toward their degrees by 

attending school year-round, thereby increasing their likelihood of on-time completion.

The 2018 request makes available $134.2 billion in new Federal student aid in fiscal year 2018, 

including $29 billion in Pell Grants and nearly $105 billion in student loans. More than 12 million 

students will use these resources in their efforts to complete college.

This overview discusses the Administration’s proposed package of initiatives and reforms that 

will not only better target aid to students, but also improve student success. Current student aid 

programs are described in detail under the Student Financial Assistance account, the TEACH 

Grants account, and the Student Loans Overview. The administrative costs associated with 

the student aid programs are presented in the Student Aid Administration account. 
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STUDENT AID REFORM PROPOSALS

Protect Pell Grants

Pell Grants are the foundation of a student’s financial aid package, to which other forms of aid 

are added. This Budget would fully fund the Pell Grant program in 2018, with a maximum 

award of $5,920 in award year 2018-2019.

Support Year-Round Pell

Currently, full-time students who want to accelerate their studies, but exhaust their Pell Grant 

eligibility during an award year, are unable to receive Pell aid for additional coursework during 

an institution’s academic calendar—such as a summer semester. The Budget supports yearround Pell Grant eligibility, allowing students the opportunity to earn a third semester of 

Pell Grant funding during an award year. Eligible students will be able to receive up to 150 

percent of their regular Pell Grant award, allowing students to complete their degrees on time or 

faster. This proposal would boost Pell grant aid disbursed by $1.5 billion in award year 2018-

2019 to approximately 900,000 students.

Simplify Campus-Based Aid Programs

Most of the roughly 6,500 institutions of higher education that participate in the Federal Pell 

Grant and/or Federal Student Loan programs also participate in one or more of the Federal 

Campus-Based Aid programs. While all schools are eligible to participate in the campus-based 

aid programs, antiquated statutory formulas with stringent hold-harmless provisions have 

resulted in institutional allocations that are not well-targeted to the students who need the aid 

the most. The President’s 2018 Budget proposes to reform student eligibility in Federal 

Work Study (FWS) program to ensure funds go to the undergraduate students who would 

benefit the most. The President’s 2018 Budget also proposes to eliminate the Supplemental 

Educational Opportunity Grant (SEOG) program, which is largely duplicative with the Pell 

Grant program and does not deliver need-based aid in the most-targeted way.

Student Loan Policies

The 2018 Budget addresses student debt by simplifying student loan repayment and redirecting 

inefficiencies in the student loan program to prioritize expedited debt relief for undergraduate 

borrowers.

All policies referenced for student loans would apply to loans originated on or after July 1, 2018, 

with an exception for students who borrowed their first loans prior to July 1, 2018 and who are 

borrowing to complete their current course of study. These policies together would save 

approximately $143 billion over ten years.

Simplify Student Loan Repayment 

In recent years, income-driven repayment (IDR) plans, which offer borrowers the option of 

making affordable monthly payments based on factors such as income and family size, have 

grown in popularity. However, choosing and enrolling in the right repayment plan is overly 
STUDENT AID OVERVIEW

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complicated by the numerous and complex repayment plans authorized and required by law to 

be offered to borrowers. 

The 2018 Budget proposes to greatly simplify student loan repayment by consolidating 5 IDR 

plans into a single plan. The single IDR plan would set a borrower’s monthly payment at 12.5 

percent of discretionary income, while eliminating the standard repayment cap to ensure that 

high-income, high-balance borrowers make payments commensurate with their income. 

Married borrowers who file separately would have their payment determined based on their 

combined income. For borrowers with undergraduate student debt only, any balance remaining 

after 15 years of repayment would be forgiven. For borrowers with any graduate debt, any 

balance remaining after 30 years of repayment would be forgiven.

To support this streamlined pathway to debt relief for undergraduate borrowers, and to generate 

savings that help put the Nation on a more sustainable fiscal path, the Budget eliminates the 

Public Service Loan Forgiveness program. In addition, the 2018 Budget proposes to eliminate 

subsidized student loans. All new undergraduate student loans would be unsubsidized. 

The Budget retains teacher loan forgiveness programs in order to incentivize more high-quality 

teachers to teach in high-need schools and subjects.

Higher Education Accountability

Earning a college degree is one of the most important investments students can make in their 

future and remains a gateway to the middle class. Federal student grants and loans play a key 

role in helping students afford to enroll in and successfully complete college. However, some 

colleges do not hold up their end of the bargain, and they lack adequate incentives to support 

their students in graduating, finding a good job, and repaying their loans. A better system would 

create shared responsibility for success among students, schools, and the federal government 

to ensure students do not take on debt that they cannot afford to repay – leaving taxpayers on 

the hook for the costs of loan default or forgiveness. The Administration looks forward to 

working with Congress to address these issues.
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STUDENT AID PROGRAMS OUTPUT MEASURES

Aid Available to Students

(dollars in millions)

Output Measures 2016Footnote

2017

Annualized CRFootnote2018Footnote

Pell Grants $26,862 $26,899 $28,807

Supplemental Educational Opportunity 

Grants 993 991 0

Federal Work Study 1,096 1,094 554

Iraq and Afghanistan Service Grants 0.432 0.484 0.559

New Student Loans:

Stafford Loans New 22,423 22,565 14,528

Unsubsidized Stafford Loans New 50,643 51,651 64,439

Parent PLUS Loans New 12,934 13,343 14,308

Grad PLUS Loans New 9,461 9,891 11,486

Perkins Loans New 782 782 0

TEACH Grants1 New 91 93 101

Subtotal, New Student Loans 96,334298,3252 104,8622

Total 125,287 127,309 134,224

NOTES: Detail may not add to total aid available due to rounding.

Shows total aid generated by Department programs, including Perkins Loan capital from institutional 

revolving funds, and institutional matching funds generated by the SEOG and Work-Study programs

1 For budget and financial management purposes, this program is operated as a loan program under the 

Federal Credit Reform Act of 1990.

2 Excludes loans issued to consolidate existing loans (Consolidation Loans), which total $45,633 million in 

2016, $46,927 million in 2017, and $48,201 million in 2018.

.
STUDENT AID OVERVIEW

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Number of Student Aid Awards

(in thousands)

Output Measures

2016Footnote

2017

Annualized CRFootnote2018Footnote

Pell Grants 7,213 7,143 7,281

Supplemental Educational 

Opportunity Grants 1,530 1,527 0

Federal Work-Study 635 634 333

Iraq and Afghanistan Service Grants N/A1N/A1N/A1

New Student Loans:

Stafford Loans New 6,894 6,934 4,081

Unsubsidized Stafford Loans 8,858 8,954 9,899

Parent PLUS Loans New 1,005 1,020 1,070

Grad PLUS Loans New 562 572 620

Perkins Loans New 316 253 0

TEACH Grants New 32 32 33

Subtotal, New Student Loans 17,667217,765215,7032

Total 27,045 27,069 23,317

NOTE: Detail may not add to total due to rounding.

1 N/A denotes number of recipients will not exceed 500.

2 Excludes loans issued to consolidate existing loans.

Number of Postsecondary Students Aided by Department Student Aid Programs

Count

2016

2017

Annualized CR 2018

Unduplicated Count (in thousands) 11,869 11,899 12,220
STUDENT AID OVERVIEW

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Program Performance Information

PERFORMANCE MEASURES

This section presents selected program performance information, including, for example, the 

Government Performance Results Modernization Act (GPRM) goals, objectives, measures and 

performance targets and data; and an assessment of the progress made toward achieving 

program results. Achievement of program results is based on the cumulative effect of the 

resources provided in previous years and those requested in fiscal year 2018 and future years, 

as well as the resources and efforts invested by those served by this program.

Because Federal student assistance grant and loan programs rely on the same program data, 

performance indicators and strategies that apply to these programs are grouped here in the 

Student Aid Overview and are not repeated in justifications for the Student Financial 

Assistance program account, or in the Student Loans Overview.

Goal: To help ensure access to high-quality postsecondary education by providing 

financial aid in the form of grants, loans, and work-study in an efficient, financially 

sound, and customer-responsive manner.

Objective: Ensure that low- and middle-income students will have the same access to 

postsecondary education that high-income students do.

Measure: College enrollment rates: Postsecondary education enrollment rates will increase 

each year for all students, while the enrollment gap between low- and high-income and minority 

and non-minority high school graduates will decrease each year.

Submeasure: The percentage of high school graduates ages 16-24 enrolling immediately in 

college following high school.

Year

Target: Total Percentage 

Enrolled

Actual: Total Percentage 

Enrolled

2013 68% 65.9%

2014 68 68.4

2015 68 69.2

2016 68

2017 68

2018 68
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Year

Target: Percentage point 

difference between 

high-income and low-income 

high school graduates ages 16-

24 enrolling immediately in 

college

Actual: Percentage point 

difference between 

high-income and low-income 

high school graduates ages 16-

24 enrolling in college

2013 25.25% 33.00%

2014 25.00 25.80

2015 24.75 14.00

2016 24.50

2017 24.00

2018 22.50

Measure: College enrollment rates: Postsecondary education enrollment rates will increase 

each year for all students, while the enrollment gap between low- and high-income and minority 

and non-minority high school graduates will decrease each year.

Submeasure: The percentage of high school graduates ages 16-24 enrolling immediately in 

college following high school.

Year

Target: Percentage point 

difference between White and 

Black high school graduates 

ages 16-24 enrolling 

immediately in college

Actual: Percentage point 

difference between White and 

Black high school graduates 

ages 16-24 enrolling 

immediately in college

2013 6.00% 12.10%

2014 5.75 -2.50

2015 5.50 15.70

2016 5.25

2017 5.25

2018 5.25

Year

Target: Percentage point 

difference between White and 

Hispanic high school 

graduates ages 16-24 enrolling 

immediately in college

Actual: Percentage point 

difference between White and 

Hispanic high school 

graduates ages 16-24 enrolling 

immediately in college

2013 8.75% 9.00%

2014 8.50 2.50

2015 8.25 2.40

2016 8.00

2017 8.00

2018 8.00

Additional information: The overall enrollment rate in postsecondary education following high 

school has increased steadily from 2013 to 2015, and the actual rate now exceeds the target. 

The gap between high- and low-income students who enrolled immediately in college after high 

school dropped to 14 percentage points in 2015—below the target goal of 24.75 percentage 

points. Based on previous year data, 2015 marks the first year this metric has met its target 
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goal. The Department believes its commitment to the Student Financial Assistance programs 

will continue to encourage and allow more low-income students to enroll in college—and 

provide them the means to remain in school—than would be the case in the absence of the 

Federal student financial assistance programs.

The gap between White and Black high school graduates enrolling in college immediately after 

high school reached 15.70 percentage points in 2015, above the target goal of 5.50 percentage 

points. However, in 2014, more Black high school graduates enrolled in college immediately 

after high school than White high school graduates, leading to a reversal in the normal gap 

between these two groups for the first time.

The gap between White and non-White Hispanic high school graduates who enroll immediately 

in college continued to decline in 2014 and 2015. In 2013, the gap was 9.00 percentage points 

and slightly below the target of 8.75 percentage points; in 2014, the gap was significantly lower 

at 2.50 percentage points and significantly lower than the target goal of 8.50 percentage points.

In 2015, the gap declined to 2.40 percentage points and again was significantly lower than the 

target goal of 8.25 percentage points. The Department remains committed to furthering equal 

educational opportunity, and will continue to pursue policies to support this important goal. 

Data for the measures is taken from the Digest of Education Statistics (Digest), published 

annually by the National Center for Education Statistics (NCES). Refer to the technical 

information provided in the Digest by NCES when interpreting year-to-year changes in the data. 

Fiscal year 2016 data will be available in mid- 2017.

Objective: Ensure that more students will persist in postsecondary education and attain 

degrees and certificates.

Measure: Graduation rate: Graduation rates for all full-time, degree-seeking students in 4-year 

and less than 4-year programs will improve, while the gap in graduation rates between minority 

and non-minority students will decrease.

Submeasure: The percentage of first-time, full-time degree seeking students graduating within 

150 percent of the normal time required.

Year

Target: Students graduating 

with a 4-year degree within 

150 percent of the normal time 

required

Actual: Students graduating 

with a 4-year degree within 

150 percent of the normal time 

required

2013 63% 59.4%

2014 64 59.6

2015 65

2016 66

2017 66

2018 66
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Year

Target: Students graduating 

with a less-than-4-year degree

within 150 percent of the 

normal time required

Actual: Students graduating 

with a less-than-4-year degree

within 150 percent of the 

normal time required

2013 43% 27.9%

2014 44 29.1

2015 45

2016 46

2017 46

2018 46

Measure: Graduation rate: Graduation rates for all full-time, degree-seeking students in 4-year 

and less than 4-year programs will improve, while the gap in graduation rates between minority 

and non-minority students will decrease.

Submeasure: The percentage of first-time, full-time degree seeking students graduating within 

150 percent of the normal time required.

Year

Target: Percentage point 

difference between White and 

Black first-time, full-time 

students graduating with a 

4-year degree within 150 

percent of the normal time 

required

Actual: Percentage point 

difference between White and 

Black first-time, full-time 

students graduating with a 

4-year degree within 150 

percent of the normal time 

required

2013 16.2% 22.2%

2014 16.0 22.3

2015 15.8

2016 15.6

2017 15.6

2018 15.6

Year

Target: Percentage point 

difference between White and 

Hispanic first-time, full-time 

students graduating with a 

4-year degree within 150 

percent of the normal time 

required

Actual: Percentage point 

difference between White and 

Hispanic first-time, full-time 

students graduating with a 

4-year degree within 150 

percent of the normal time 

required

2013 9.0% 10.4%

2014 8.7 9.7

2015 8.6

2016 8.5

2017 8.5

2018 8.5

Measure: Graduation rate: Graduation rates for all first-time, full-time, degree-seeking students 

in 4-year and less than 4-year programs will improve, while the gap in graduation rates between 

minority and non-minority students will decrease.
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Submeasure: The percentage of first-time, full-time degree seeking students graduating within 

150 percent of the normal time required.

Year

Target: Percentage point 

difference between White and 

Black first-time, full-time 

students graduating with a 

less-than-4-year degree within 

150 percent of the normal time 

required

Actual: Percentage point 

difference between White and 

Black first-time, full-time 

students graduating with a 

less-than-4-year degree within 

150 percent of the normal time 

required

2013 5.4% 8.9%

2014 5.3 8.3

2015 5.2

2016 5.1

2017 5.1

2018 5.1

Year

Target: Percentage point 

difference between White and 

Hispanic first-time, full-time 

students graduating with a 

less-than-4-year degree within 

150 percent of the normal time 

required

Actual: Percentage point 

difference between White and 

Hispanic first-time, full-time 

students graduating with a 

less-than-4-year degree within 

150 percent of the normal time 

required

2013 0.9% -0.8%

2014 0.8 0.1

2015 0.8

2016 0.7

2017 0.7

2018 0.7

Additional Information: The percentage of first-time, full-time degree-seeking students 

graduating with a 4-year degree within 150 percent of the normal time slightly increased from 

59.4 percent in 2013 to 59.6 percent in 2014. Similarly, the percentage for students completing 

a less-than-4-year degree increased from 27.9 percent in 2013 to 29.1 percent in 2014. The 

graduation rates for both 2-and-4-year degree levels observed in 2015 were below the target 

goals established for this measure.

Changes from 2013 to 2014 in the completion gaps for 4-year degree programs between White 

and Black students and between White non-Hispanic and Hispanic students were very minimal 

(less than 1 percentage point). The gaps observed in 2014 for both comparison groups, 

however, remain larger than the target goals established in 2014 and future years. 

From 2013 to 2014, the difference between the percentages of White and Black students at 

less-than-4-year degree programs decreased by .6 percentage points to 8.3 percentage 

points—outside of the goal of 5.3 percentage points. In both 2013, Hispanic students graduated 

from degree programs within 150 percent of the normal time at less than 4-year programs at a 
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slightly higher rate than White non-Hispanic students (29.9 percent compared to 29.1 percent), 

but the rates were close to even in 2014. 

Data for the measures supporting this objective are collected through the Graduation Rate 

Survey (GRS) conducted as part of the annual Integrated Postsecondary Student Aid Study 

(IPEDS). Fiscal year 2015 data will be available in 2017. The Department will continue to 

evaluate current performance measures and, where appropriate, revise these measures and 

goals.

PROGRAM IMPROVEMENT EFFORTS

The Department is exploring ways to gather detailed program and student outcome data for

program-specific measures that will provide reliable indicators of program effectiveness.

EFFICIENCY MEASURES

The Department is reassessing the efficiency measures for the individual student financial aid 

programs. The results of this reassessment will reflect proposed program changes and be 

incorporated into future budget requests.