Potential Changes in Federal Student Loan Policies Could Impact Arizona Students
As discussions around immigration policies intensify, Arizona’s college students face uncertainty regarding federal student loans. A policy proposal could drastically affect financial aid for tens of thousands of students in the state.
Arizona currently stands among 25 states offering in-state tuition for undocumented students. However, under a new proposal associated with President-elect Donald Trump, this policy might lead to the withdrawal of federal student loans for 67,000 undergraduates in Arizona. Most of these students are American citizens.
Federal loans play a significant role in funding education at Arizona’s major universities, including Arizona State University, University of Arizona, and Northern Arizona University. While one-third of students at these institutions depend on federal loans, the number climbs to three-quarters at some smaller colleges, according to data from the National Center for Education Statistics.
Jenny Muñiz, a senior policy advisor at UnidosUS, a Latino civil rights organization, commented, “This particular attack is intended to really bully and affect a small group,” while highlighting that restricting federal financial aid would ripple across all students.
Support for this idea comes from Rep. Virginia Foxx, R-North Carolina, who stated, “Siphoning off resources that could be used for legal students in order to cover illegal migrants is irresponsible and wrong.”
The proposal is part of Project 2025, a policy framework from the Heritage Foundation, with involvement from individuals who served in Trump’s first administration. While mass deportation proposals have drawn more attention, the potential impact on student loans is significant.
Connor Greenwall, an ASU junior, expressed concern over the proposal. With federal loans covering approximately 40% of his tuition, he emphasized, “if I was not getting any federal student loan assistance, it would be impossible for me to attend college.”
Although Trump has distanced himself from Project 2025 during his campaign, the New York Times analysis notes that over half of its authors were part of his administration or transition teams. Key figures include Russell Vought, Tom Homan, and Stephen Miller.
Ken Cuccinelli, a former Virginia attorney general and Trump administration official, authored the section of Project 2025 addressing student loans and immigrant students. The Heritage Foundation has previously claimed that Trump implemented two-thirds of its 2016 recommendations in his first year.
Professor E.J. Fagan from the University of Illinois Chicago remarked, “I don’t think we have any reason to believe that the Trump Department of Homeland Security or Department of Education would be less anti-immigrant than what you see in Project 2025.”
Sen. Bill Cassidy, R-Louisiana, the incoming chair of the Senate Health, Education, Labor and Pensions Committee, has not publicly addressed this proposal. Known for his criticism of higher education’s liberal leanings, Cassidy was one of the few GOP senators who voted to convict Trump during the impeachment trial over the Jan. 6 Capitol attack.
Arizona’s in-state tuition policy was approved by voters with a narrow margin of 51% in 2021. Federal law mandates that states offering college benefits to undocumented students must extend the same to out-of-state U.S. citizens.
Proposition 308 bypasses this requirement by granting in-state tuition to students who attended high school in Arizona for at least two years and graduated there.
Annually, approximately 1,000 undocumented students graduate from Arizona high schools, as per the Higher Ed Immigration Portal. Currently, public colleges in Arizona host over 9,500 undocumented students and DACA recipients, according to the Presidents’ Alliance on Higher Education and Immigration.
Katherine Meyer from the Brookings Institution warns that cutting federal loans could signal to students that their institutions lack federal support, thereby jeopardizing their financial sustainability. She asserts, “They really do rely on federal aid subsidizing some amount of education.”
However, a no-loan policy could pressure states like Arizona to reconsider providing undocumented students and DACA recipients with in-state tuition, as noted in a Niskanen Center report. Arizona ranks 34th in state financial aid per undergraduate, averaging $125 per student, with federal loans constituting a larger portion of financial aid.
In the 2022-2023 academic year, students at ASU, UA, and NAU borrowed an average of over $7,000, while those at private and community colleges borrowed over $5,000 on average.
ASU student Grae Shoup expressed disapproval, stating, “You are hurting students that have nothing to do with the policy with your views on immigration. I hate this policy, and I don’t want it.”
Ray Serrano of the League of United Latin American Citizens believes that cutting off federal loans could create division between U.S. citizens and their undocumented peers, making their presence on campus a perceived financial threat.
In response to earlier immigration policies, some universities declared themselves “sanctuary” campuses, resisting cooperation with immigration authorities unless legally required. Serrano emphasizes the positive impact of education on undocumented students and their communities, stating, “the ripple effect from their education is very vast.”
Meyer from Brookings suggests that Trump could potentially cut student loans via executive order, though congressional involvement would complicate legal challenges. Monica Andrade of the Presidents’ Alliance on Higher Education and Immigration anticipates legal battles, asserting, “People are going to do coalition-building and really try to prevent the enforcement of these policies.”
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