On February 5, President Bush released his Fiscal Year 2008 budget request, including $56 billion in discretionary funding for the U.S. Department of Education. In the budget, the Bush Administration provided significant increases in funding for the Department of Education by eliminating 44 programs totaling $2.2 billion. Also, to increase grants for low-income postsecondary education students, the administration is seeking savings in mandatory student loan programs. Among the highlights:
Department of Education Secretary Spellings announced the increase in the maximum Pell Grant while addressing education, government, and business leaders assembled at North Carolina State University. "The reality is, as costs skyrocket, it becomes increasingly difficult for middle-class families to afford college. And, for low-income, mostly minority students, college is becoming virtually unattainable," she said. "States, institutions, and the federal government, we all must increase need-based aid. The President aims to do just that." The Secretary also emphasized the need to supply better information to students and families about how and where their money is being spent. "Just like any other investment or enterprise, we need meaningful data to better manage the system," she stated. "Better information will help parents plan and prepare. And it will help policymakers and college administrators do a better job serving our most important clients: students.”
In its budget documents, the Department of Education (ED) estimates that the new Pell Grant maximum would cost approximately an additional $2.22 billion. In order to pay for the increases, the Administration proposes to eliminate, among others, the following programs:
In calling for the elimination of the SEOG program, the Administration argues, in part: because Federal funding allocations for this purpose are awarded to qualifying postsecondary institutions under a [sic] outdated statutory formula, and because individual SEOG award are not optimally allocated based on a student's financial need, funds would be redirected to the larger, more broadly available, and more need-focused Pell Grant program.
OMB calls the Perkins Loan Cancellation Program "inefficient and duplicative of other, larger, Federal student loan programs.” Furthermore, the Administration is proposing to recall and recapture the Perkins revolving loans currently used by participating institutions, which totals, in its estimates, $3.2 billion from FY2008 to FY2012. ED argues that the revolving funds would be "better used to support increases in need-based grants." In its proposed elimination of LEAP, ED writes, in part, that LEAP "has accomplished its objective of stimulating all States to establish need-based postsecondary student grant programs."
Many had believed that both TRIO and GEAR-UP programs would be slated for cuts as well. It appears that both programs would be level-funded under the new budget.
ED proposes to level-fund the Graduate Assistance in the Areas of National Need (GAANN) and the Javits Fellowship Programs as well, at approximately $30.1 million and $9.8 million, respectively.
The Academic Competitiveness Grant (ACG) and National Science and Mathematics Access to Retain Talent (SMART) programs were created to encourage Pell eligible American citizens to pursue specific academic fields and programs. The FY2008 budget proposes to significantly increase the level of support for these two programs. With this budget, the Administration is seeking to infuse an additional $1.0 billion over five years for the two programs.
The budget proposes to increase the maximum grant levels for ACG by 50 percent each, to $1,125 for first-year students and $1,950 for second-year students. The budget would not change the grant levels for the SMART grants. ED notes that, "Combined with the maximum Pell Grant [$4,600], the higher ACG awards would cover 86 percent of tuition and fees for freshmen and all tuition and fees for sophomores at the average public 4-year college."
With respect to student loans, the budget would increase the annual loan limits on third- and fourth-year undergraduates by $2,000 to $7,500 as well as the aggregate limit. Furthermore, the budget calls for the equalization of the interest rates on PLUS loans for both Direct Loan (DL) and Federal Family Education Loan (FFEL) programs at 8.3 percent.
Finally, in a proposal that will likely cause some concern in the higher education community, the budget calls for the establishment of a "higher education unit record pilot." The budget document states that:
The pilot will modify several components of the Integrated Postsecondary Education Data System (IPEDS) to implement a privacy-protected system that would allow interested parties to follow students as they move from one institution to another, thus allowing better understanding of student attendance, graduation and transfer rates, academic outcomes, and the costs of higher education.
The FY2008 budget request for the Department of Education is available at the following address: http://www.ed.gov/about/overview/budget/budget08/summary/index.html
Sources: AASCU, NASULGC, Department of Education FY08 Budget