Mandatory SpendingOption 5
Function 500 - Education, Training, Employment, and Social Services
Reduce or Eliminate Subsidized Loans for Undergraduate Students
Billions of dollars | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2015-2019 | 2015-2024 | |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Change in Outlays | |||||||||||||
Restrict access to subsidized loans to students eligible for Pell grants | -0.4 | -0.9 | -1.2 | -1.3 | -1.3 | -1.4 | -1.4 | -1.5 | -1.5 | -1.6 | -5.1 | -12.5 | |
Eliminate subsidized loans altogether | -1.2 | -2.9 | -3.7 | -3.9 | -4.1 | -4.3 | -4.4 | -4.5 | -4.7 | -4.8 | -15.9 | -38.6 |
Note: This option would take effect in July 2015. Estimates are relative to CBO’s August 2014 baseline projections.
This option includes two possible changes to subsidized student loans, which, by the Congressional Budget Office’s estimates, will constitute about half of the dollar volume of federal direct loans to undergraduate students for the 2014–2015 academic year. (“Subsidized loans” do not accrue interest while students are enrolled in school and during certain other periods when borrowers may defer making payments.) In the first alternative, access to subsidized loans and the associated interest subsidies would be restricted to students eligible for Pell grants. In the second alternative, subsidized loans would be eliminated altogether.