Today, the House Appropriations Committee takes up its Fiscal Year 2027 (FY27) Labor, Health and Human Services, Education, and Related Agencies (“Labor-H”) bill, released last week. While the bill rejects several of the most draconian cuts proposed by the Administration in its FY27 budget request, for students, it represents a net loss of federal support at a time when costs continue to skyrocket and millions struggle to meet their essential needs.
The bill includes the funds required to close the looming shortfall in the Pell Grant program, adding roughly $15 billion in mandatory funding to close the shortfall and nudging the total maximum award up by $50, to $7,445. And it also recognizes the importance of funding several vital grant programs that can help campuses create ecosystems of support on campus, including the Basic Needs Grant, campus child care, and mental health. Unfortunately, it does so at the expense of several programs that complement Pell and put college within reach.
Specifically, the House Labor-H bill would eliminate the ability of the Department of Education (ED) to make subsidized loans to low-income students, which will cause interest charges to accumulate and debt balances to balloon for over 4 million students. In addition, the House bill slashes campus-based aid programs, cutting the Supplemental Education Opportunity Grant (SEOG) by nearly 40 percent and Federal Work-Study (FWS) by over a quarter (nearly $700 million combined). Shoring up Pell is essential, but should never come at the expense of the other programs that put college within reach.
At the same time, a modest $50 increase to Pell does not keep pace with the rising cost of attendance, particularly the non-tuition costs—food, housing, transportation, and child care—that define whether a student can stay in school. For the low-income students who depend on it most, a maximum grant that continues to fall behind rising costs is a cut in everything but name.
“Closing the Pell shortfall is essential to make sure we’re not backtracking on the promises already made to students. But by slashing essential and successful programs elsewhere, students’ needs will continue to go unmet,” said Mark Huelsman, The Hope Center’s Director of Policy & Advocacy. “Eliminating subsidized loans, gutting work-study and SEOG, and failing to put sufficient federal funding into basic needs, child care, and other safety net programs is the equivalent of extending one hand while pulling up the ladder with another.”
Maintaining modest support for basic needs, child care, and mental health is important but insufficient
The bill includes funding for several grant programs within the Fund for the Improvement of Postsecondary Education (FIPSE), including $5 million for Basic Needs for Postsecondary Students Grant (commonly known as the “Basic Needs Grant”), a cut of 50%. Other FIPSE grants that could be used to support basic needs and student success, including the Postsecondary Student Success Grant and HBCU, TCU, and MSI Research and Development Infrastructure Grants, are level-funded, while the House would eliminate the Rural Postsecondary and Economic Development (RPED) Grants altogether.
The House rejected the Administration’s proposal to zero-out funding for the Child Care Access Means Parents in School (CCAMPIS) program, which funds campus-based child care for low-income parenting students, and maintains funding at $75 million per year. Yet demand for CCAMPIS funds continues to far outstrip available funding. And while the bill includes a modest $10 million increase to the Child Care and Development Fund (CCDF), students often struggle to even access CCDF funds.
Finally, the bill does modestly increase funding for the Garrett Lee Smith (GLS) Campus Suicide Prevention Grant by $2 million, to $12.48 million, and supports a waiver that waives onerous grant matching requirements for Minority Serving Institutions and community colleges. GLS is the only federal program dedicated to addressing mental and behavioral health services for college students, and Congress’s bipartisan statement of support for GLS continues to be essential given the Administration’s unsuccessful attempt to cancel nearly $2 billion in mental health programs earlier this year. We encourage lawmakers to substantially expand funding for GLS campus grants in reflection of the ongoing mental health challenges facing students, and the reciprocal relationship between addressing mental health and meeting students’ material basic needs.
Eliminating subsidized loans shifts costs onto students who can least afford them
Subsidized loans exist to keep low- and moderate-income undergraduates from accruing interest while they are still in school and while they get on their feet in their career. Eliminating them means students with financial need will borrow the same amount and owe more, with interest ballooning while they should be able to focus on their studies. For students already choosing between rent, textbooks, and groceries, this represents a background tax while they try to earn a degree or credential.
Worse, this proposal comes on top of the cuts already enacted last year through the One Big Beautiful Bill Act (OBBBA), which reduced the ability of graduate students and the parents of undergraduates to access federal aid, prorated loan eligibility for students who must attend part-time, and made over a trillion dollars in cuts and new red tape to the Supplemental Nutrition Assistance Program (SNAP) and Medicaid that make it far harder for students and families to afford food and essential health care. As students, states, and institutions continue to contend with and prepare for these cuts to fully take effect, eliminating loan subsidies and making higher education more expensive will have compounding, and disastrous, impacts.
Cutting SEOG and Work-Study undermines the supports that keep students enrolled
The SEOG program prioritizes the lowest-income students, and is designed specifically to complement Pell Grants. In the past, campuses were able to use SEOG, in part, as a source of emergency aid to help students cover small-dollar expenses that can derail their education. Federal Work-Study lets students earn while they learn, often in jobs connected to their field of study. The House bill would provide SEOG with $545 million (a cut of $364 million) and $908 million for FWS (a cut of $322 million).
Cutting these campus-based programs by hundreds of millions of dollars doesn’t make college cheaper; it merely forces students to work longer hours off campus, take on burdensome debt, reduce their course loads, or walk away from school altogether. Congress has not increased funding for these programs in years, and their impact continues to erode every year that college and living costs rise. This bill would accelerate that decline.
Gutting federal education research moves us backward
The bill would cut the Institute of Education Sciences (IES) by over 37 percent compared to FY2026, including cutting funding for the National Center for Education Statistics (NCES) in half. If enacted, this would kneecap the federal data infrastructure that tells us what college actually costs, and reduce our ability to build interventions that keep students enrolled. NCES datasets such as the National Postsecondary Student Aid Study and Beginning Postsecondary Students Study provide a unique insight into how students fare over time and where resources should be best deployed to help students succeed. Campuses and policymakers cannot fix what they do not measure, and we encourage lawmakers to maintain, protect, and expand federal higher education data collection.
A better path to investing in students
Let’s be clear: Congress can close the Pell shortfall, increase grant aid to students, and protect the rest of the aid and higher education programming that students depend on to make it through their program. These are not and have never been competing goals, and simply require prioritization and an orientation that puts students first. As this bill moves through the full committee and as the Senate crafts its own spending bill, we urge lawmakers to keep the mandatory Pell investment, restore subsidized loans, reverse the cuts to SEOG and Work-Study, expand funding for essential programs like the Basic Needs Grant and CCAMPIS, and rebuild the data capacity that lets policymakers do their jobs. The Hope Center will continue to work alongside our partners to ensure that lawmakers invest in students rather than trade one form of support for another.