This commentary is part of TCF’s Beyond Health series, which discusses the many potential harms of up to $880 billion in potential Medicaid cuts across issue areas.
In late February, House Republicans passed a budget resolution with President Trump’s endorsement that will likely take $880 billion over the next decade from Medicaid, the nation’s largest health insurance program for Americans with low incomes or disabilities. If Congress enacts this plan to pay for tax cuts for the wealthy, the immediate effects on health coverage and health services for American families would be devastating.
But the damage wouldn’t stop there: the ripple effects of the cuts would extend well beyond the nation’s health care system. Because higher education typically functions as the “balance wheel” of state budgets—meaning it is the first and foremost target of cuts when fiscal pressure is high—access to a college education could be another of the casualties of cuts to federal Medicaid funding. If Congress does not reverse course, the nation’s college students could bear an outsized share of the burden through changes such as higher tuition, fewer enrollment slots, and lower education quality.
A well-functioning federal government would not make its states choose between their residents’ access to a doctor and their access to higher learning.
When sufficiently funded, health care access and public education work in concert to help Americans live prosperous lives. A well-functioning federal government would not make its states choose between their residents’ access to a doctor and their access to higher learning—but that is exactly what this Congress and White House appear determined to do.
Medicaid Cuts Would Affect the 14 Million Students Enrolled in Public Higher Education
Medicaid is a matching program in which each of the fifty states manages Medicaid for their residents and gets at least 50 percent of its costs reimbursed by the federal government. By ripping away federal funds for Medicaid, Congress would put state lawmakers in a bind. For every federal dollar lost, they could restrict Medicaid coverage such that $1 less is spent on Medicaid, divert $1 from other spending categories, or raise $1 through new revenues such as taxes.
Americans’ health care needs and costs will persist: cuts to health care would not change that. And in order to cope, some states would have no choice but to shrink their funding to community colleges and public universities, which collectively serve 14 million students. State appropriations are fundamental to degree attainment, so cuts would no doubt lock many students out of a degree and the higher-paying employment that often comes with it.
History has shown that dramatic cuts to states’ higher education spending have direct negative impacts on college access and quality. Public colleges and universities respond by raising tuition: for example, during the Great Recession, Georgia cut appropriations per student by $2,646 (-30 percent) and its public four-year universities increased tuition by $2,998 (+64 percent). Nationwide, it took states more than a decade to return to pre-recession per-student funding levels, though tuition per student never fell back to where it was, and families still pay a higher share of public higher education costs than they did in 2008.
Higher education institutions offset funding cuts by decreasing expenditures, especially on instruction, and especially so at community colleges. Public universities also respond to funding cuts by enrolling more out-of-state or international students and fewer low-income students. In other words, as state funds dry up, public universities—which are chartered to serve the interests of their states—have no choice but to act more like private universities. Thus the downstream effect of state budget cuts on students is higher enrollment at for-profit colleges, which have a long history of failing and defrauding their students; declining graduation rates, especially at historically Black colleges and universities; and longer time to degree completion.
Public investment in a student’s education pays off just as much, if not more, for society as for the student.
Degree attainment benefits more people than just the student who receives the diploma: higher civic engagement, higher tax payments, lower crime rates, and lower health care needs, all of which tend to follow such attainment, also make the student’s community stronger. Public investment in a student’s education pays off just as much, if not more, for society as for the student. So Congress’s Medicaid funding cuts would set off a domino chain which, among myriad negative outcomes on health outcomes and child care, would also make society worse off in terms of its wealth, security, and civic responsibility.
Cuts Would Jeopardize Care for the 3.5 Million College Students Enrolled in Medicaid
Even if states spared their higher education appropriations, college students could still be affected by loss of Medicaid coverage.
In 2023, an estimated 3.5 million college students received coverage through Medicaid. The Affordable Care Act led to more college students enrolling in Medicaid: the program covers 18.9 percent of college students in states that expanded Medicaid, compared to just 10.7 percent in those that did not.
Expanding Medicaid eligibility led to students making more progress toward graduation and improved financial well-being for low-income young adults. Reversing these gains would impair students’ ability to launch their careers. Further, if states set new Medicaid eligibility restrictions to balance their budgets, it would likely exacerbate the difficulties college students already face in accessing Medicaid and other public benefits and inflame serious challenges meeting college students’ basic needs.
Medicaid Cuts Would Break a Virtuous Cycle That Benefits Us All
If they receive the care they need and can afford to enroll and fully participate in college, today’s students will earn degrees and pay more in taxes tomorrow, which can then fund Medicaid and state funding for public colleges. Congress’s Medicaid cuts risks turning this virtuous cycle of health, education, and state finances into a downward spiral towards poor health, lower degree attainment, and, ultimately, weaker financial well-being for Americans and U.S. society writ large.
If Congress passes Medicaid cuts, state lawmakers would only have bad options to choose from.
If Congress passes Medicaid cuts, state lawmakers would only have bad options to choose from in these vitally important decisions about their residents’ lives. There’s a better path: Congressional leaders would do their constituents a service by taking Medicaid cuts off the table.
Tags: higher education, donald trump, medicaid cuts, beyond health
Beyond Health: Medicaid Cuts Could Put College Dreams on Life Support
This commentary is part of TCF’s Beyond Health series, which discusses the many potential harms of up to $880 billion in potential Medicaid cuts across issue areas.
In late February, House Republicans passed a budget resolution with President Trump’s endorsement that will likely take $880 billion over the next decade from Medicaid, the nation’s largest health insurance program for Americans with low incomes or disabilities. If Congress enacts this plan to pay for tax cuts for the wealthy, the immediate effects on health coverage and health services for American families would be devastating.
But the damage wouldn’t stop there: the ripple effects of the cuts would extend well beyond the nation’s health care system. Because higher education typically functions as the “balance wheel” of state budgets—meaning it is the first and foremost target of cuts when fiscal pressure is high—access to a college education could be another of the casualties of cuts to federal Medicaid funding. If Congress does not reverse course, the nation’s college students could bear an outsized share of the burden through changes such as higher tuition, fewer enrollment slots, and lower education quality.
When sufficiently funded, health care access and public education work in concert to help Americans live prosperous lives. A well-functioning federal government would not make its states choose between their residents’ access to a doctor and their access to higher learning—but that is exactly what this Congress and White House appear determined to do.
Medicaid Cuts Would Affect the 14 Million Students Enrolled in Public Higher Education
Medicaid is a matching program in which each of the fifty states manages Medicaid for their residents and gets at least 50 percent of its costs reimbursed by the federal government. By ripping away federal funds for Medicaid, Congress would put state lawmakers in a bind. For every federal dollar lost, they could restrict Medicaid coverage such that $1 less is spent on Medicaid, divert $1 from other spending categories, or raise $1 through new revenues such as taxes.
Beyond Health
Read more about what deep Medicaid cuts would mean for everyday Americans.Beyond Health: Medicaid Cuts Would Bring Widespread Harms to Americans
Beyond Health: Potential Impact on Foster Youth of $880 Billion in Medicaid Cuts
Beyond Health: What Cutting Medicaid Means for Disabled People, Including in Maine
Beyond Health: Medicaid Cuts Will Further Exacerbate the Epidemic of Gun Violence
Beyond Health: Potential Impact on K–12 Students of $880 Billion in Medicaid Cuts
Beyond Health: Medicaid Cuts Could Put College Dreams on Life Support
Beyond Health: Threats to Medicaid Funding Would Endanger Child Care Too
Americans’ health care needs and costs will persist: cuts to health care would not change that. And in order to cope, some states would have no choice but to shrink their funding to community colleges and public universities, which collectively serve 14 million students. State appropriations are fundamental to degree attainment, so cuts would no doubt lock many students out of a degree and the higher-paying employment that often comes with it.
History has shown that dramatic cuts to states’ higher education spending have direct negative impacts on college access and quality. Public colleges and universities respond by raising tuition: for example, during the Great Recession, Georgia cut appropriations per student by $2,646 (-30 percent) and its public four-year universities increased tuition by $2,998 (+64 percent). Nationwide, it took states more than a decade to return to pre-recession per-student funding levels, though tuition per student never fell back to where it was, and families still pay a higher share of public higher education costs than they did in 2008.
Higher education institutions offset funding cuts by decreasing expenditures, especially on instruction, and especially so at community colleges. Public universities also respond to funding cuts by enrolling more out-of-state or international students and fewer low-income students. In other words, as state funds dry up, public universities—which are chartered to serve the interests of their states—have no choice but to act more like private universities. Thus the downstream effect of state budget cuts on students is higher enrollment at for-profit colleges, which have a long history of failing and defrauding their students; declining graduation rates, especially at historically Black colleges and universities; and longer time to degree completion.
Degree attainment benefits more people than just the student who receives the diploma: higher civic engagement, higher tax payments, lower crime rates, and lower health care needs, all of which tend to follow such attainment, also make the student’s community stronger. Public investment in a student’s education pays off just as much, if not more, for society as for the student. So Congress’s Medicaid funding cuts would set off a domino chain which, among myriad negative outcomes on health outcomes and child care, would also make society worse off in terms of its wealth, security, and civic responsibility.
Cuts Would Jeopardize Care for the 3.5 Million College Students Enrolled in Medicaid
Even if states spared their higher education appropriations, college students could still be affected by loss of Medicaid coverage.
In 2023, an estimated 3.5 million college students received coverage through Medicaid. The Affordable Care Act led to more college students enrolling in Medicaid: the program covers 18.9 percent of college students in states that expanded Medicaid, compared to just 10.7 percent in those that did not.1
Expanding Medicaid eligibility led to students making more progress toward graduation and improved financial well-being for low-income young adults. Reversing these gains would impair students’ ability to launch their careers. Further, if states set new Medicaid eligibility restrictions to balance their budgets, it would likely exacerbate the difficulties college students already face in accessing Medicaid and other public benefits and inflame serious challenges meeting college students’ basic needs.
Medicaid Cuts Would Break a Virtuous Cycle That Benefits Us All
If they receive the care they need and can afford to enroll and fully participate in college, today’s students will earn degrees and pay more in taxes tomorrow, which can then fund Medicaid and state funding for public colleges. Congress’s Medicaid cuts risks turning this virtuous cycle of health, education, and state finances into a downward spiral towards poor health, lower degree attainment, and, ultimately, weaker financial well-being for Americans and U.S. society writ large.
If Congress passes Medicaid cuts, state lawmakers would only have bad options to choose from in these vitally important decisions about their residents’ lives. There’s a better path: Congressional leaders would do their constituents a service by taking Medicaid cuts off the table.
Notes
Tags: higher education, donald trump, medicaid cuts, beyond health