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Department of Education

STUDENT AID OVERVIEW

Fiscal Year 2019 Budget Request

CONTENTS

Page

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

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

Student Aid Programs Output Measures.................................................................................N-6

Program Performance Information ..........................................................................................N-8
STUDENT AID OVERVIEW

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Federal Student Aid Programs

(Higher Education Act of 1965, Title IV)

(dollars in thousands)

FY 2019 Authorization: Indefinite

Budget Authority:

Period of fund availability: 

2018

Annualized CR Footnote2019 Footnote

Change from

Annualized CRFootnote

Grants and Work Study:

Pell Grants

Pell Grant Discretionary funding $22,322,722 $22,475,352 152,630

Pell Grant Mandatory funding 7,359,0001 7,486,0001127,000

Subtotal, Pell Grants 29,681,722 29,961,352 279,630

Federal Supplemental Educational 

Opportunity Grants 728,151 0 -728,151

Federal Work Study 983,007 200,000 -783,007

Iraq and Afghanistan Service Grants 463 0 -463

TEACH Grants2 74,9473 39,9313 -35,016

Total, Grants and Work-Study 31,468,290 30,201,283 -1,267,007

NOTE: Table reflects discretionary and mandatory funding.

1 Amounts appropriated for Pell Grants for 2018 and 2019 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 2018 amount includes a net upward reestimate of $44.8 million due primarily to assumptions 

pertaining to the number of grants that will convert to loans. The amount for FY 2019 reflects new loan 

subsidy.
STUDENT AID OVERVIEW

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Period of fund availability: 

2018

Annualized CR Footnote2019 Footnote

Change from

Annualized CR Footnote

Net Loan Subsidy, Loans1

Federal Family Education Loans (FFEL) 2,309,6562 -655,5103 -2,965,166

Federal Direct Student Loans -14,976,6594-8,534,746 6,441,913

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 reestimates 

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 2018 reflects a 

net upward reestimate of $2.3 billion primarily due to revised assumptions related to prepayments and 

updated interest rate assumptions. This amount also includes reestimates related to the Ensuring 

Continued Access to Student Loans (ECASLA) Act. 3 The 2019 amount includes a modification to reflect the policy proposal to eliminate Account 

Maintenance Fees.

4 Amount for 2018 includes a net downward reestimate of $11.5 billion, primarily due to updated discount 

rates (i.e., the collection of interest rates used to calculate the present value of cash flows), increased 

participation in Income-Driven Repayment (IDR) plans, and technical changes to how loans in IDR plans 

are modeled. The 2018 amount also reflects a modification of $60.8 million to forgive accrued interest on 

borrower defense claims that have been denied and pending for more than one year.

FY 2019 BUDGET PROPOSAL

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

students afford a postsecondary education, find employment in today’s workforce, and realize 

the lifelong benefits of a higher education. The Administration’s fiscal year 2019 Budget for the 

Federal student aid programs focuses on simplifying funding for college and addressing the 

unique needs of today’s students. The 2019 Budget supports expanding Pell Grant eligibility for 

short-term programs and reforming the Federal Work Study program to support workforce and 

career-oriented training opportunities for low-income undergraduate students. The Budget also 

includes proposals that address student debt by simplifying student loan repayment and 

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

undergraduate borrowers. These proposals would support congressional efforts to reauthorize 

the Higher Education Act (HEA) to address student debt and higher education costs while 

reducing the complexity of student financial aid. The 2019 request makes available $129.5

billion in new Federal student aid in fiscal year 2019, including $30 billion in Pell Grants and $99

billion in student loans.5 More than 11 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.

5 Excludes consolidation loans.
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STUDENT AID REFORM PROPOSALS

Protect Pell Grants and Iraq and Afghanistan Service Grants

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

are added. The Administration’s 2019 Budget would fully fund the Pell Grant program in 2019

and provide for a $5,920 maximum award in 2019-2020, while ensuring the program remains 

on stable financial footing. The Budget would also move the Iraq and Afghanistan Service 

Grants (IASG) program to the Pell Grant program. This change will help to ensure the children

of our fallen service members receive a full aid award, exempt from cuts due to sequestration, 

and without any other changes to the program’s benefits or eligibility.

Expand Pell Grant Eligibility to Short-Term Programs

Students often face many obstacles in choosing the best education option available for them. 

Students that attend some postsecondary programs are not eligible to receive federal student 

aid due to time and program length requirements. Federal law should facilitate, not impede, 

students exploring and accessing those options. To that end, this Budget proposes to expand 

Pell Grant eligibility to institutions that offer high quality short-term programs, with 

sufficient guardrails in place to balance students’ needs with protecting taxpayers’ interests.

Reform Campus-Based Aid Programs

Most of the roughly 6,000 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 institutions are eligible to participate in the campusbased 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.

Consistent with the President’s call to bolster effective workforce development programs, the 

Budget proposes to reform the Federal Work Study (FWS) program from a model that mostly 

provides subsidized employment as a form of federal aid for higher income undergraduate and 

graduate students to one that supports workforce and career-oriented training opportunities for 

low-income undergraduate students. The Budget proposes to reform the institutional allocation 

formula in order to focus scarce funds to institutions based, in part, on the enrollment of Pell 

Grant recipients. Institutions could fund individual students through subsidized employment, 

paid internships, or other placements, provided they are career or academically relevant. 

Schools could also fund broader programs serving multiple students that provide exposure to or 

build preparedness for careers. The President’s 2019 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 a well-targeted way.

Student Loan Policies

The 2019 Budget addresses student debt by simplifying student loan repayment and redirecting 

inefficient subsidies in the student loan program to ensure a more sustainable fiscal path, while 

prioritizing expedited relief for undergraduate borrowers.
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All policies referenced for student loans would apply to loans originated on or after July 1, 2019, 

with an exception for students who borrowed their first loans prior to July 1, 2019 and who are

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

approximately $203 billion over ten years.

Simplify Student Loan Repayment and Student Loan Programs

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 

complicated by the numerous repayment plans authorized and required by law to be offered to 

borrowers.

The 2019 Budget proposes to greatly simplify student loan repayment by consolidating five 

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 payments determined based on both 

their and their spouse’s 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 further 

improve the implementation and effectiveness of IDR, the Budget proposes auto-enrolling 

severely delinquent borrowers and instituting a process for borrowers to consent to share 

income data for multiple years. To facilitate these program improvements, and to reduce 

improper payments, the Budget proposes to streamline the Department of Education’s ability to 

verify applicants’ income data held by the Internal Revenue Service (IRS).

While retaining teacher loan forgiveness programs in order to incentivize more high-quality 

teachers to teach in high-need schools and subjects, the Budget proposes eliminating inefficient 

subsidies to help put the Nation on a more sustainable fiscal path and prioritize expedited debt 

relief for undergraduate borrowers. These proposals include eliminating Public Service Loan 

Forgiveness, Subsidized Stafford loans, and the payment of Account Maintenance Fees 

to guaranty agencies.

Higher Education Accountability

Investing in higher education generally provides strong value for students and taxpayers. 

However, some institutions consistently fail to deliver a quality education that enables students 

to successfully repay Federal student loans—leaving borrowers and taxpayers holding the bill. A 

better system would require postsecondary institutions accepting taxpayer funds to share a 

portion of the financial risk associated with student loans, in consideration of the actual loan 

repayment rate to ensure that the substantial taxpayer investment in higher education continues 

to provide strong value for students and the economy. The Administration plans to work with 

Congress to address these issues.
STUDENT AID OVERVIEW

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Reauthorizing the Higher Education Act (HEA)

The Administration looks forward to working with the Congress to encourage colleges, 

universities, and other educational institutions to offer every student an accessible, affordable, 

and innovative education tailored to their needs that prepares them for lifelong learning and 

success. The Administration’s principles for an HEA reauthorization include:

• expand Pell Grant eligibility for short-term programs;

• reform Federal student loan and repayment options;

• recalibrate the grant allocation process;

• ensure institutional accountability;

• reduce regulatory burdens;

• improve transparency;

• offer administrative updates and financial flexibility; and

• promote free speech on college campuses.
STUDENT AID OVERVIEW

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STUDENT AID PROGRAMS OUTPUT MEASURES

Aid Available to Students

(dollars in millions)

Output Measures 2017

Footnote

2018

Annualized CRFootnote2019

Footnote

Pell Grants $29,031 $29,621 $30,174

Supplemental Educational Opportunity 

Grants 993 986 0

Federal Work Study 1,096 1,089 221

Iraq and Afghanistan Service Grants 0.455 0.490 0

Subtotal, New Grant Aid 31,120 31,696 30,395

New Student Loans:

Stafford Loans New 21,542 21,627 17,181

Unsubsidized Stafford Loans New 49,816 51,134 56,833

Parent PLUS Loans New 12,513 13,217 13,824

Grad PLUS Loans New 9,942 10,697 11,176

Perkins Loans New 743 0 0

TEACH Grants1 New 91 92 99

Subtotal, New Student Loans 94,647296,7672 99,1132

Total 125,767 128,462 129,508

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. Aid 

available may differ from appropriated amounts for a given fiscal year.

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 $48.8 billion in 

2017, $50.3 billion in 2018, and $51.8 billion in 2019.

.
STUDENT AID OVERVIEW

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Number of Student Aid Awards

(in thousands)

Output Measures

2017

Footnote

2018

Annualized CRFootnote2019

Footnote

Pell Grants 7,168 7,399 7,632

Supplemental Educational 

Opportunity Grants 1,530 1,519 0

Federal Work-Study 635 631 133

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

Subtotal, New Grant Aid 9,333 9,549 7,765

New Student Loans:

Stafford Loans New 6,181 6,198 4,934

Unsubsidized Stafford Loans 8,064 8,153 8,487

Parent PLUS Loans New 933 960 989

Grad PLUS Loans New 565 588 602

Perkins Loans New 338 0 0

TEACH Grants New 34 34 34

Subtotal, New Student Loans 16,115215,933215,0462

Total 25,448 25,482 22,811

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

2017

2018

Annualized CR 2019

Unduplicated Count (in thousands) 11,163 11,336 11,448
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 Act (GPRA) 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 2019 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.

Year

Target: Total Percentage 

Enrolled

Actual: Total Percentage 

Enrolled

2014 68 68.4

2015 68 69.2

2016 68 69.8

2017 68

2018 68

2019 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

2014 25.00 25.80

2015 24.75 14.00

2016 24.50 17.10

2017 24.00

2018 22.50

2019 22.00

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

2014 5.75 -2.50

2015 5.50 15.70

2016 5.25 12.40

2017 5.25

2018 5.25

2019 5.00

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

2014 8.50 2.50

2015 8.25 2.40

2016 8.00 -2.30

2017 8.00

2018 8.00

2019 7.00

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

school has increased steadily from 2013 to 2016, and the actual rate now exceeds the targets 

set over the last few years. The gap between high- and low-income students who enrolled 

immediately in college after high school dropped to 14 percentage points in 2015, marking the 

first year this metric met its target. Although this gap ticked up to 17.1 percentage points in 

2016, this metric still met the target of 24.50 percentage points. The Department believes its 

commitment to the Student Financial Assistance programs and proposed reforms in the 2019 

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

other training programs—and provide them the means to remain in school—than would be the 

case in the absence of the Federal student financial assistance programs.
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The gap between White and Black high school graduates enrolling in college immediately after 

high school reached 12.40 percentage points in 2016, above the target of 5.25 percentage 

points, but lower than the gap of 15.70 percentage points observed in 2015. In 2014, the 

percentage of high school graduates enrolled in college immediately after high school was 

higher for Black high school graduates than White high school graduates, leading to a reversal 

in the gap between these two groups for the first time.

The metric that measures the gap between White and non-White Hispanic high school 

graduates who enroll immediately in college continues to meets or exceed its targets. In 2016, 

the percentage of non-White high school graduates enrolling in college immediately after high 

school was higher than the percentage of White high school graduates for the first time. The 

gap measured in 2014 and 2015, while reversed, was significantly lower than the targets in 

these years. The Department remains committed to furthering equal educational opportunity 

and will continue to pursue policies to support this important goal. 

Data for the measures are 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 2017 data will be available in mid-2018.

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.

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

2014 64 59.6%

2015 65 59.4

2016 66 59.8

2017 66

2018 66

2019 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

2014 44 27.9%

2015 45 29.1

2016 46 32.8

2017 46

2018 46

2019 46

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

2014 16.0 22.3%

2015 15.8 23.8

2016 15.6 24.2

2017 15.6

2018 15.6

2019 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

2014 8.7 9.7%

2015 8.6 9.7

2016 8.5 9.5

2017 8.5

2018 8.5

2019 8.5
STUDENT AID OVERVIEW

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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

2014 5.3 8.9%

2015 5.2 8.3

2016 5.1 9.1

2017 5.1

2018 5.1

2019 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

2014 0.8 -0.8%

2015 0.8 0.4

2016 0.7 2.5

2017 0.7

2018 0.7

2019 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 increased slightly from 

59.4 percent in 2015 to 59.8 percent in 2016. The percentage of students completing a lessthan-4-year degree increased from 29.1 percent in 2015 to 32.8 percent in 2016. The 

graduation rates for both 2-and-4-year degree levels observed in 2016 were below the targets

established for this measure.

The completion gap between White and Black students who were enrolled in 4-year degree 

programs increased slightly from 2015 to 2016 (23.8 percentage points to 24.2 percentage 

points). The gap observed in 2016 remains larger than the targets established in 2016 and 

future years. 

From 2015 to 2016, the difference between the percentages of White and Black students at 

less-than-4-year degree programs increased by .8 percentage points to 9.1 percentage 

points —outside of the goal of 5.1 percentage points. In 2014, Hispanic students graduated 

within 150 percent of the normal time at less-than-4-year programs at a slightly higher rate than 

White non-Hispanic students (29.9 percent compared to 29.1 percent), but the gap reversed in 

2015 and 2016 with White non-Hispanic students graduating at a higher rate (by .4 percentage 

points and 2.5 percentage points, respectively, compared to Hispanic students).
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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 2017 data will be available in late 2018. 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.