‘It’s painful’: Administration Makes Plans Amid Funding Cuts

In the wake of President Donald Trump’s One Big Beautiful Bill Act (OBBA) which includes legislation to cut federal funding for research and student loans, top Loyola administration officials are committed to ensuring safeguards are put in place for impacted students.

Though Loyola is an R1 institution, it doesn’t receive the same amount of funding as other more prestigious universities like Northwestern, Harvard and Columbia, which have been under close watch by the Trump administration funding-wise, The Associated Press reported.

The school has been hit across several departments, including a broad range of research related endeavors and student loan programs, according to Vice Provost of Research Dr. Meharvan Singh and Chief Financial Officer Wayne Magdziarz. 

Though conscious of the current affairs funding for public media, Director of Student Media Eleni Prillaman said Loyola’s public radio, WLUW, isn’t in jeopardy as funding is provided by the university and not through the Corporation for Public Broadcasting. 

Unlike many other college TV stations which are PBS funded, Loyola doesn’t have a TV station within the SOC that broadcasts — only streams and reuploads programming.

The OBBA became law July 4. Sections 81001 and 82001 concern federal student loans under the Direct Loan program and their borrowing limits and termination of all loan repayment plans after July 1, 2026. Madgziarz said these changes would affect students for the 2026-2027 academic year  unless actions taken by the university can extend the July 1 deadline another year.

Through Vice President for Civic Engagement and Government Affairs Philip Hale, university leadership has been working with elected officials on Capital Hill  since the passage of OBBA to gain a better understanding of the timing and implementation of the bill, according to Madgziarz. The leadership’s main concern is with making sure the changes to the Department of Education won’t disrupt their ability to issue financial aid award letters to incoming students.

The Department of Education (ED) is undergoing what Magdziarz termed a large-scale “computer upgrade” called the Common Origination and Disbursement system, which supports the disbursement of forms such as Pell Grants, direct loans and other Title IV programs.

Magdziarz said he doesn’t believe student tuition will be directly impacted by OBBA, but there have been notable cuts to student loan programs. In the past year, the university distributed over $200 million in federal aid to over 10,000 students at the undergraduate and graduate levels. Three loan programs now hang in the balance — Parent Plus, Graduate Plus and unsubsidized student loans.

The new legislation places caps on the amount of money families can borrow under Parent Plus. Over the past five years, over 2,300 Loyola students borrowed over the cap. Those families would be most impacted by the new laws, according to Madgziarz. Graduate Plus loans are set to be eliminated completely, with Loyola losing $39 million in funding for graduate and professional students. 

Unsubsidized student loans will have caps of $100,000 placed for graduate students and $200,000 for professional programs, according to Madgziarz. Last year, over 1,800 students borrowed over those caps.

Another major area impacted by federal cuts is the federal work study program. The university is allocated $3.5 million every year to provide for 1,400 work study students in a typical academic year. If the legislation holds, the budget will be cut to half a million, and the program’s size will have to be cut by 85%, according to Madgziarz. The leadership team — composed of vice presidents and deans — met in August to begin putting contingency plans in place for students.

Singh said the Office of Research Services (ORS) has been dealing with cuts to grants since Trump first began signing executive orders when he took office.

“We’ve not been left unscathed,” Singh said. “We’ve had some grants get terminated, and it’s painful.” 

Singh said the ORS has put in place what he calls “pivot” programs for students who were impacted by funding cuts, which can help them request funds to help them shift the focus of their research or secure funding from a different source.

Singh said the reason for termination of grants in the current political climate varies. 

“Loyola is absolutely without equivocation, committed to following and adhering to the rule of law,” he said.

Research is funded through different federal agencies, such as the National Institute of Health, National Science Foundation, Department of Education, Department of Energy or Department of Justice. The university works with an investigator to draft appeals for terminated grants, which are then submitted out of Singh’s office.

“We’re trying to be persuasive, we’re not trying to get into an argument,” Singh said. “We’re simply trying to make the case that this work must continue.”

Even though one federal agency may terminate funding for a program or grant, it doesn’t mean another may pick it up, according to Singh. Otherwise, the school is looking into private foundations, nonprofit organizations and non federal agencies.

“‘Leave no stone unturned’ is what we’re trying to do,” he said.

When the new administration took office, executive orders were immediately signed mainly targeting grants having to do with DEI initiatives. From there, areas of termination interest expanded to things like clean energy, work with vaccines and COVID grants by March.

There was an initial push to limit Facilities and Administration indirect caps — essential costs of conducting research — in early February to 15%, which Singh said would’ve been catastrophic for most universities. The Lake Shore Campus alone operates at a rate of 45%. Dropping the rate by two-thirds would cost the university millions of dollars, according to Singh.

Hale is working with members from the Illinois delegation that has policy staffers based in D.C. who focus on smaller issues including higher education. 

Hale explained to the staff how any legislation will impact Loyola and its students, and works across both sides of the aisle. After the legislation passed, he and the staff followed up and discussed any challenges they anticipate in implementing the new legislation.

The ED has to initiate all the proposed changes in the bill for award year, which is the same thing as the academic year of 2026-2027.  Essentially, nothing will impact students in the current academic year,  and Hale hopes harm can be avoided next year too.

Hale believes he got some representatives’ attention on implementation challenges, such as Congressman Daren LaHood (IL-16). Hale’s concerns have been shared with democrats and LaHood’s office. LaHood’s office has shared those concerns with the House committee managing higher education policy, the committee on education and workforce. 

On the senate side, Sen. Dick Durbin’s (D-IL) office shared concerns with the corresponding senate committee, HELP, or health, education, labor and pensions. The committee’s staff then shared concerns with the majority staff. 

“The bill was passed, so we’re not going to change what’s in it. We’re not going to change the policy — what’s in the bill,” Hale said.

Though unsure if they’ll be successful, Hale and staffers are seeking to change the date of implementation from award year 2026-2027 to award year 2027-2028. By changing the award year, Loyola’s financial aid office will have the time it needs to prepare for changes and better serve incoming students and their families.

Hale explained when any laws are passed which impact federal agencies — in this case, the ED — it’s then up to the agency to create rules and regulations for implementation. The ED won’t have completed this process, “negotiated rule-making,” until mid-January, around the time students receive financial aid packages for the upcoming year.

The negotiated rule-making process has two parts, according to Hale. In October and November, the department will have a “comment period” where they’ll take comments from the higher education community and the general public on how to implement the loan portion of the OBBA, including cuts to grad and parent-plus loans.

In December and January, the department will hear comments from the public on Pell Grants, specifically, the new workforce pell.

“They won’t be able to create their guidance until they’ve digested all the comments and incorporate those comments in their guidance, so that’s why we don’t anticipate anything until January,” Hale said.

Hale said the university anticipates private banks and private lenders stepping in to fill the gap created by the elimination of federal loans, but it’s unlikely the rates will be as favorable as the ones previously offered by the ED.

“We will have only just gotten the guidance from the department at that time, so there won’t be time for us to do this efficiently, effectively,” Hale said. “This will lead to a lot of confusion among students and parents, and that’s what we’re trying to avoid.”