President Trump’s proposed 2019 budget will eliminate subsidized loans and change CalFresh benefits, directly impacting UC Santa Barbara students.
The proposed changes to student loans would save the federal government about $6 billion in fiscal year 2019. About $2.429 billion would come from changing the income-driven repayment (IDR) plans, $1.72 billion from eliminating Public Service Loan Forgiveness and $1.5 billion from eliminating subsidized loans, according to data from the Trump Administration.
Currently, the government pays interest on subsidized student loans while students are in school or the loans are in deferment. If the changes in the new budget are enacted, the federal government would only offer unsubsidized loans.
The budget suggests “streamlining” IDR plans for student loans and altering the cap on the percentage of income for these plans and the length of payment.
Currently there are several IDR plans dependant on income.
Under the suggestions laid out in the budget, repayment would be capped at 12.5 percent of discretionary income, and balances would be forgiven after 15 years of repayment for undergraduates and after 30 years for graduate students.
The proposed changes would “focus assistance on needy undergraduate student borrowers instead of high-income, high-balance graduate borrowers.”
These new conditions would apply only to students borrowing loans beginning July 1, 2019, and would not apply to students who are already using student loans from the federal government.
The budget also encourages Congress to pass a law that would make colleges and universities assume some of the financial risk associated with student loans.
The budget also suggests changes to the Supplemental Nutrition Assistance Program (S.N.A.P.) and CalFresh, which is California’s version of the program. A portion of the monetary benefits that program recipients currently receive would be replaced with a box of food.
Mick Mulvaney, the director of the Office of Management and Budget (OMB), compared the proposed program to Blue Apron, the meal delivery service, at a press briefing.
Mulvaney said it would cause “tremendous” cost savings.
“It lowers the cost to us because we can buy prices at wholesale, whereas they have to buy it at retail. It also makes sure that they’re getting nutritious food,” he said.
The reforms to S.N.A.P. would save about $17 billion, according to numbers the OMB produced.
UCSB students who receive benefits from CalFresh would be impacted by the proposed changes.
Rodolfo Herrera, the coordinator of the A.S. Food Bank, said the average student at UCSB receiving CalFresh benefits received about $150 per month. He noted, however, that the amount students receive varies significantly.
He added that international and undocumented students are not able to receive these benefits.
He said the freedom of students to purchase foods from CalFresh is “really important” because recipients can use it to buy foods that don’t require a lot of cooking or processing, which he noted would matter especially to students preparing for finals or midterms.
According to data provided by Herrera, CalFresh sales at the Isla Vista Food Co-op totalled $52,930 in 2015 and $68,000 in 2016.
Herrera said the logistics of implementing Trump’s proposed program would be difficult, including storing large quantities of food and even keeping up with people’s addresses.
“The big system programs that we have for supplemental nutrition for low-income families have been established for a few decades already. The logistical aspects of it are already in place,” he said.
A version of this story appeared on pg. 4 of the Feb. 22, 2018 issue of the Daily Nexus.