International students in US could bear the brunt as universities face steep federal aid cuts

As federal funding cuts and policy changes loom, US colleges are preparing for major shifts in how they offer financial aid to local and international students. Aid officials across the country are warning that institutional aid budgets may shrink, raising out-of-pocket costs and threatening access for many students, Times Higher Education reports.

The warning comes as financial aid administrators gather in Anaheim, California, for the annual National Association of Student Financial Aid Administrators (NASFAA) conference. The atmosphere at the event is marked by uncertainty. Lawmakers are moving ahead with a proposal to overhaul federal student aid policies, including cuts to Pell Grants, loan caps for graduate students, and the elimination of programs like TRIO that support college access.

“Financial aid budgets thrive on predictability,” said NASFAA president Melanie Storey. “Right now, that’s in short supply.” She added that students “will be expected to pay more for college” if the cuts move forward.

Financial aid officers from both public and private colleges told Inside Higher Ed that they are already planning for possible reductions. At some institutions, offers made to incoming students for the fall are now uncertain. One senior official at a public research university, speaking anonymously to Times Higher Education, said, “I think some vulnerable student populations are really going to suffer, or may not be able to attend at all.”

Colleges are not just facing aid cuts. They are also dealing with losses in research funding and possible reductions in state support. In Maine, a free community college program may end after just three years due to budget constraints. Across states, similar aid initiatives could face rollbacks.

In Washington, Congress is also considering raising the tax on large college endowments from 1.4% to 8%. Anne Harris, president of Grinnell College, said that the new tax would put pressure on even well-funded schools. “We will try to keep our no-loan promise, but the strain on aid budgets will increase,” she said.

Experts agree that financial aid offices now play a critical role in institutional planning. Some colleges may shift enrolment strategies, such as admitting more out-of-state or international students, to increase revenue. However, that approach is also complicated by tighter immigration policies. For students, this could mean smaller aid packages or the need to turn to private loans.