The Future of Higher Education: How California and New York Will Be Impacted by DOE Layoffs

The U.S. Department of Education’s planned downsizing is poised to send shockwaves through the country’s education system. While K-12 schools will bear a heavy burden, the impact on higher education in California and New York could be particularly devastating. These states house some of the largest public university systems in the country, with millions of students relying on federal grants, loans, and research funding.

So, what happens when the federal government starts pulling back on education spending? Tuition increases, financial aid reductions, student debt spikes, and research slowdowns are all on the table.

Let’s break down what this means for California and New York’s higher education landscape over the next year.

California: A Looming Crisis for UC, CSU, and Community Colleges

California’s college system is one of the largest in the world, with over 2.5 million students enrolled in the University of California (UC), California State University (CSU), and California Community Colleges (CCC). Many of these students depend on federal aid to afford their education.

Biggest Risks for California

1. Pell Grant and Federal Loan Disruptions

• CSU and community college students are the most vulnerable — 40% of CSU students rely on Pell Grants.
• If the federal government reduces financial aid, low-income students could be forced to drop out or take on high-interest private loans.
• UC and CSU students also use federal loans to cover tuition and living expenses — if interest rates rise or loans become harder to get, student debt will skyrocket.

2. Rising Tuition Costs

• If federal financial aid dries up, UC and CSU may have no choice but to raise tuition.
• CSU tuition is already scheduled to increase annually — this could make it worse.
• California Community Colleges, which serve many low-income and first-generation students, could see major enrollment drops.

3. UC Research Funding at Risk

• UC Berkeley, UCLA, and UC San Diego receive billions in federal grants for research in STEM, climate science, and medicine.
• If federal research funding is cut, it could lead to job losses, fewer research opportunities, and a slowdown in innovation.
• Graduate students and postdocs who rely on research stipends could struggle to stay in school.

4. Student Loan Forgiveness at Risk

• Many California graduates work in public service, education, and healthcare, expecting relief through Public Service Loan Forgiveness (PSLF).
• If the program is eliminated or scaled back, thousands of California workers may be stuck with unmanageable debt.

How California Might Respond

✅ Expand Cal Grants & Middle Class Scholarships to cover lost federal aid.
✅ Seek corporate and philanthropic funding to replace lost research grants.
✅ Increase investment in state-backed student loans to counter federal cuts.

New York: A Disaster for SUNY, CUNY, and Excelsior Scholarship Students

New York’s SUNY and CUNY systems serve over 600,000 students, many of whom are low-income, first-generation, or immigrants. These students rely even more on federal aid than their California counterparts — meaning New York could feel the pain even more intensely.

Biggest Risks for New York

1. Pell Grant & Federal Aid Cuts Will Hit Hard

• Over 55% of CUNY students receive Pell Grants — more than any other large university system.
• If these grants are cut or restricted, many students won’t be able to afford college.
• SUNY also serves many low-income students who rely on federal assistance to cover both tuition and living costs.

2. Excelsior Scholarship Could Be in Jeopardy

• New York’s Excelsior Scholarship covers tuition for students whose families make under $125,000.
• But it only works if Pell Grants remain in place — if those get cut, the state will have to make up the difference or cut the program.
• Without Excelsior, many middle-class students may struggle to afford college.

3. Increased Student Debt & Loan Repayment Problems

• Many SUNY & CUNY graduates rely on federal loans to cover school costs.
• If student loan interest rates rise or access is limited, debt could spiral out of control.
• NYC has one of the highest concentrations of PSLF-eligible workers — they may lose forgiveness benefits, leaving them buried in debt.

4. Research Funding at Elite Universities

• Columbia, NYU, and Cornell depend on federal research grants.
• If funding drops, research programs may be cut, impacting faculty jobs, graduate students, and technological innovation.
• Fewer grants = fewer opportunities for students to get research assistantships and paid work-study roles.

How New York Might Respond

✅ Expand state-funded tuition programs to replace lost federal grants.
✅ Lobby aggressively to protect research grants for top universities.
✅ Increase public-private partnerships to support student financial aid.

California vs. New York: Who’s in Worse Shape?

Factor California New York Pell Grant Reliance High (CSU, Community Colleges) Very High (CUNY, SUNY) Student Loan Use High, but state aid helps Extremely High, huge risk for CUNY & SUNY students Tuition Risks CSU & UC tuition may increase Excelsior Scholarship could collapse Research Funding Impact UC schools rely on federal grants Columbia, NYU, Cornell at high risk PSLF (Loan Forgiveness) Impact California has many PSLF-eligible workers NYC has even more PSLF-dependent graduates State Response Likelihood Likely to expand grants Likely to increase state-funded tuition programs

🚨 Verdict: New York is likely to struggle even more than California.

• CUNY students are the most vulnerable since they depend so heavily on federal aid.
• Excelsior Scholarship might not survive without federal grants.
• SUNY students may be forced into higher debt, making it harder for working-class families to afford college.

What’s Next for Higher Education?

If these federal cuts go through, we’re likely to see:
📌 Higher tuition costs at public universities
📌 Fewer financial aid opportunities for low-income students
📌 Increased student debt — especially for those who lose access to PSLF
📌 Slower scientific research progress due to fewer grants

State governments will have to step up or risk a major drop in college accessibility, affordability, and innovation.

The bottom line?
California has more financial flexibility, but New York may face a student debt crisis if aid is cut. Students in both states should prepare for financial aid uncertainty and potential tuition hikes.

What Can Students Do?

🎓 Apply for state-based financial aid early — Cal Grants, Excelsior, and other programs may have limited funding.
💰 Look for scholarships and alternative funding sources to reduce reliance on federal loans.
📢 Advocate for state and federal policies that protect student aid and PSLF programs.

The next 6–12 months will be critical in shaping the future of higher education. The decisions made now will impact college affordability for an entire generation of students. Stay informed, stay prepared, and let your voice be heard. 🚀