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Higher education budget rises modestly as universities warn of federal loan limits

Education, Business and Administration Subcommittee ยท February 6, 2026

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Summary

DLS reported a roughly 3% increase in state higher education funding for FY2027 while university leaders warned that new federal caps on graduate and Parent PLUS borrowing could limit access for professional programs and affect thousands of Maryland students.

Department of Legislative Services analysts told the subcommittee the proposed fiscal 2027 higher education package increases total state support by about 3% (roughly $99.7 million year-over-year), with varied changes across public four-year institutions, community colleges, and independent colleges.

David Perbert and Sarah Vega of DLS presented exhibits showing inflation-adjusted funding changes, tuition comparisons, and enrollment statistics. The analysts said Marylandper-FTE state support rose over the 2014'024 period, and that the state remains relatively affordable compared with peer states.

University leaders and system officials described outreach efforts, capacity constraints and the potential impact of federal loan reforms. Dr. Sanjay Rai, secretary of the Maryland Higher Education Commission, said the budget "reflects a serious and sustained commitment to post-secondary education," and noted the system is monitoring changes to federal student loan programs that could narrow graduate borrowing.

Morgan State University President Dr. David Wilson told the committee Morgan's official enrollment returned for reporting was 11,599 students and that the institution is approaching capacity, saying, "We have reached capacity. We have no place to house students who want to come." Wilson described investments in institutional aid (about $40 million annually at Morgan) and plans to scale online completer degrees for adult learners.

Loan caps and program accountability

Analysts and witnesses spent substantial time on recently enacted federal restrictions that would cap grad and Parent PLUS borrowing and implement program-level accountability metrics. DLS and system representatives said roughly 8,000 system-affiliated students could be affected by changes to federal aid, with a substantial share in graduate and professional programs; speakers warned caps could price some students out of medicine, law, and other professional tracks.

Several witnesses urged state action to protect access, including Maryland-based lending partnerships or state-level policies to bridge gaps if federal borrowing shrinks. DLS recommended adopting committee narrative requesting an instructional faculty workload report from USM, Morgan, and Saint Mary's College.

What the committee heard next

Committee members asked questions about enrollment trends, teacher pipeline strategies, and how institutions are reengaging students who stop out; DLS highlighted contingency reductions and funding caps embedded in reconciliation language. There were no formal votes during the overview session.

Sources and evidence: DLS exhibits and testimony from David Perbert, Sarah Vega (DLS), Dr. Sanjay Rai (MHEC), and Dr. David Wilson (Morgan State University).