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FY17 Budget Deal A Mixed Bag For Millennials

May 2, 2017
Contact: Sarah Schultz,, 202-734-6510

Yesterday, Republican and Democratic leadership released a final budget deal to fund the federal government for the rest of the 2017 Fiscal Year, and final deal included both wins and losses for young people. The deal restored of Year-Round Pell for the 2017-2018 school year, which is a win for students, allowing as many as one million students to access their need-based financial aid in the summer and accelerating their time to completion and often limiting student debt loads. The deal also contains some modest increases in funding for key higher education programs including TRIO, GEAR UP and apprenticeships.

However, the budget deal also contains problematic cuts of over $1.3B to the Pell Grant program. This cut undermines the stability of the program by limiting the program’s ability to combat possible future funding shortfalls. While some additional Pell funds will be used to improve the program through the restoration of Year-Round Pell, the $1.3B cut also serves as a disturbing precedent. Additionally, after this year, the Pell Grant award will no longer be indexed to inflation, which will lead to further reductions the purchasing power of the award.  This means it will cover ever smaller portions of ever-increasing college tuition.

On health care, the budget also fails to include language that would ensure the continuation of critical payments under the Affordable Care Act (ACA), referred to as cost-sharing reductions (CSRs) or subsidies, that help reduce out-of-pocket costs for low-income consumers. Millennials make up more than 43 percent of non-elderly adults whose earnings fall in the cost-sharing earnings eligibility threshold. Without the law’s cost-sharing reductions, Americans of all income levels will either pay more for health care or lose coverage altogether as insurers may pull out of insurance markets across the country. Without action from Congress, the future of CSRs lies with the Administration, which has made contradictory statements on this topic for months and failed to put forward a timeline for how long it will continue making these payments.

In response to this budget, Jen Mishory, Executive Director of Young Invincibles, released the following statement:

“This budget deal includes a win for students with the restoration of year-round Pell, but then turns around and cuts $1.3B from the program.  As we move toward the upcoming FY2018 budget negotiation, Congress and the Administration must end this strategy of raiding Pell.

With this budget, the future also remains uncertain for young adults’ access to affordable health care. It’s past time the Administration and Republicans in Congress follow the law and commit to permanently pay out cost-sharing reductions. Including funding for cost-sharing reductions in this budget would have been the clearest and most direct way to do so: as Congressional Republicans continue to recklessly push to undermine and repeal the ACA,  we’re left at the whim of the Administration, which has already equivocated on this issue and put our nation’s health at risk. Future budget deals must hold the line on ensuring affordable health care for our generation.”