New Jersey higher-education leaders warn proposed federal cuts would squeeze students, research and workforce programs

Legislators and higher‑education officials heard repeated warnings Thursday that proposed federal budget cuts and recent executive actions could sharply reduce financial aid, research grants and workforce programs that New Jersey colleges rely on.

The joint hearing of the Assembly and Senate higher education committees brought national and state experts, including John Patrick Walsh of the American Association of State Colleges and Universities and Francine (Fran) Pfeiffer of Rutgers University, to describe how proposed reconciliation instructions and agency actions threaten Pell grants, work‑study and institutional support programs.

The committee was told that the House reconciliation framework asks the Education and Workforce Committee to find roughly $330 billion in savings over 10 years and that earlier House proposals have included freezing the maximum Pell award and cutting dozens of student‑aid programs. John Patrick Walsh, assistant vice president of federal relations at the American Association of State Colleges and Universities, told the committee that the Pell program is on a projected $2.7 billion shortfall going into fiscal year 2026 and that adding workforce‑Pell proposals would increase that shortfall by roughly $5 billion.

Walsh said a variety of possible measures are under discussion in Washington: flat or reduced funding for Federal Work‑Study, TRIO and Supplemental Educational Opportunity Grants (SEOG); cuts to the Student Aid Administration; expanded endowment taxes; and so‑called risk‑sharing proposals that could require colleges to absorb costs when graduates default on loans. "Everything is on the table," Walsh said.

Rutgers senior vice president for government relations Francine Pfeiffer told the committees that federal support underpins not only student aid but university research, clinical services and extension work across the state. Rutgers receives about $491 million in federal student aid annually, including roughly $94 million in Pell dollars going to 17,000 students; the university also receives nearly $286 million a year in National Institutes of Health awards. Pfeiffer said delays, stop‑work orders and staff reductions at federal agencies — including cancelled NIH study sections and paused council meetings — are already disrupting grant review and award timelines and, in some cases, forcing research pauses.

Speakers representing New Jersey's county colleges, regional publics and independent institutions said reductions would directly affect enrollment, campus jobs and local economies. Aaron Fichter of the Council of County Colleges said New Jersey community colleges receive roughly $300 million a year in federal funding, including about $190 million in Pell dollars serving about 49,000 students statewide. David Stout, president of Brookdale Community College, and Jennifer Keys Maloney of the New Jersey Association of State Colleges and Universities described possible program cuts, halted grant‑funded positions and reduced capacity to offer career and technical education.

Committee members pressed witnesses for specifics about which students would be most harmed. Walsh and other witnesses said the effects would fall heaviest on first‑generation, low‑income and minority students who rely on Pell, work‑study and SEOG for tuition, basic needs and retention supports. "Those are the students who will be most affected," Walsh said, describing how Pell's purchasing power has fallen from roughly covering 70% of college costs in the program's early years to less than 30% today.

Panelists also flagged legal and policy uncertainty around recent executive orders and Dear Colleague guidance addressing diversity, equity and inclusion (DEI) and federal agency operations. Speakers said ambiguity in guidance and litigation increases administrative burden and can lead to stop‑work orders or funding withdrawals for programs whose language or objectives the agencies are reviewing.

The hearing produced no votes or formal committee actions. Lawmakers said the session's purpose was to gather information and prepare for state‑level responses if federal funding is reduced. Several committee members urged institutions to provide follow‑up data to quantify local economic and workforce impacts so the Legislature can evaluate state budget options.

If reconciliation or agency decisions reduce federal aid or research funding, witnesses said the likely downstream effects include lower enrollment, program cuts, staff reductions and slower research commercialization — outcomes that would also reduce economic activity in communities near campuses.

Lawmakers closed by asking witnesses for additional data on student counts, grant dependencies and economic multipliers. Committee members said they would use that information in upcoming state budget deliberations and in advocacy with federal lawmakers.