House Proposal Revokes Financial Aid Eligibility for Select Student Groups
Credit: Andrew Harnik / Getty Images- The U.S. House of Representatives’ reconciliation bill proposal includes changes to federal financial aid eligibility.
- Notably, previously eligible noncitizens are not included in the new definition.
- Refugees and survivors of human trafficking, for example, are excluded from the House proposal.
- If passed within the next few months, it could affect students for the soon-to-start 2025-26 academic year.
The U.S. House of Representatives’ 2025 budget proposal would cut federal financial aid eligibility for a handful of noncitizen student groups.
Historically, the Department of Education (ED) has allowed refugees, people granted asylum, and international survivors of domestic violence or human trafficking to qualify for federal financial aid, including federal student loans and Pell Grants.
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The House’s most recent budget proposal includes new parameters for eligible noncitizens that would exclude these student groups.
Corinne Kentor, manager of research and policy at the Presidents’ Alliance on Higher Education and Immigration, told BestColleges that this would save the federal government a negligible amount of money each year.
“It’s a huge impact for the students that would lose access,” she said, “but the actual cost saving from a budget perspective is very, very small.”
An analysis from the Presidents’ Alliance found that the following student groups would lose federal financial aid eligibility:
- Refugees
- Asylees
- Survivors of human trafficking (T visa holders)
- Survivors of domestic violence
It would also deny access to some Haitian entrants and certain Cuban parolees, according to a Congressional Budget Office (CBO) report.
Federal Student Aid (FSA) guidelines allow people who are on the pathway to becoming U.S. citizens to apply for federal financial aid. FSA also adds that eligible noncitizens must provide evidence from U.S. Citizenship and Immigration Services that they are in the country with “the intention of becoming a U.S. citizen or permanent resident.”
Kentor said the House’s proposal would, therefore, only delay a student’s ability to pursue a degree and would not lead to long-term cost savings.
CBO’s report estimates that this provision would save the federal government $15 million over the next decade and would reduce the number of students receiving federal financial aid by less than 1,000 each year.
The House’s provision may also add confusion to the 2025-26 academic year.
The amendment includes an effective date of July 1, 2025, for the eligibility changes. Kentor said it’s unclear whether this means refugees who have already submitted a Free Application for Federal Student Aid (FAFSA) for the upcoming school year can expect their federal financial aid.
Kentor said that at the state level, student aid hasn’t been immediately cut when the state changes eligibility requirements. She expects the same at the federal level.
“But because it’s one of those things we haven’t seen happen,” she said, “I’m not sure exactly how it will play out.”
It’s also unclear how long the reconciliation process could drag on.
Kentor added that these eligibility changes may not even be legal under the budget reconciliation process to begin with.
The U.S. Senate’s “Byrd Rule” is designed to prevent Congress from introducing “extraneous matter” into the budget, essentially preventing lawmakers from making policy changes that don’t materially affect the budget.
Because these eligibility changes would have a negligible impact on the budget, she said, it may violate the Byrd Rule.
The federal financial aid eligibility guidelines have been in place since 1996, when former President Bill Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act into law. That was also a reconciliation package.