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How Does Postsecondary Education Fare in the New Federal Budget?

Jan 17, 2014

By Amy Ellen Duke-Benfield

As the result of bi-partisan negotiations, Congress arrived this week at a $1.1 trillion federal omnibus budget agreement that sets spending levels for each federal program, fleshing out a framework set by Congress in October.  The bill has moved quickly, with the House passing it 359-67 on January 15, the Senate passing it 72-26 on January 16, and President Obama expected to sign it by January 18. Under the terms of the agreement, funding for many programs administered by the Department of Education (ED), including K-12 programs, is restored to pre-sequester levels, but many higher education programs are funded at levels slightly lower than that.

  • Maximum Pell Grant awards receive an automatic increase (based on inflation) from $5,645 to $5,730 for the 2014-15 award year.
  • Funding for two major campus-based programs, Federal Work-Study (FWS) and Supplemental Education Opportunity Grants (SEOG), is nearly restored to pre-sequester FY 2012 levels, with FWS funded at $733 million and SEOG at nearly $975 million. These reflect increases of over $49 million and nearly $37 million, respectively, over last year.
  • The legislation also reflects an increasing focus on completion in higher education. It provides $75 million for President Obama’s new “First in the World” grant program for higher education institutions to spur the adoption of innovative, effective strategies that improve affordability and completion. Up to $20 million is to be set aside for minority-serving institutions to improve persistence and completion rates. And the legislation instructs the Department to prioritize applications targeting strategies at low-income students.
  • State grants under the Adult Education and Family Literacy Act are funded at the same level as FY 2013, which is over $31 million lower than before the sequester; a drop from $594,933,000 in FY 2012 to $563,955,000 for FY 2014. This comes a few months after the release of new data showing that nearly one in five Americans has low basic skills.
  • Career and Technical Education State Grants are funded at $1.117 billion, an increase of $53 million over last year, but slightly below their pre-sequester levels. 
  • Funding for the eight programs that fall under the TRIO program, including Educational Opportunity Centers and Student Support Services, is restored to pre-sequester FY 2013 levels, which is still short of what the programs received in FY 2012.
  • Most of the sequestration cuts are restored to the Title III and V programs, which fund those institutions serving a high number of low-income students and minority students.
  • The main child care program that specifically funds parents pursuing higher education degrees, Child Care Access Means Parents in School, is funded at $15 million, failing to recover more than $800,000 lost to sequester cuts.
  • The legislation also includes policy provisions that reflect an increasing emphasis in the higher education community on transparency of outcomes while seeking to balance a need for better data with concern about regulatory burdens.          
    • ED is required to submit a report on institution-level enrollment and graduation information for Pell Grant recipients for the 2012-13 award year within 120 days of the enactment of the legislation. The Department has not reported such data before and only started collecting this information on Pell Grant recipients in the 2012-13 award year. Although there are reasonable concerns about the quality of these data, which will be drawn from the ED’s National Student Loan Data System, it is the most robust data the federal government currently collects for these students and is an important step in gaining greater clarity about how well institutions serve these students.
    • With an eye toward institutional concerns about increased reporting requirements, Congress asks that the report also include a plan to minimize the burden of recent student aid reporting changes.
    • Congress calls for ED to include in the report a proposal to improve the tracking of enrollment and graduation rates for transfer students and nontraditional students.  Congress is also calling for strategies to increase enrollment rates and improve graduation rates for Pell Grant recipients. 
    • The legislation sets aside $1 million for the National Research Council of the National Academy of Sciences to conduct a study on the impact of Federal regulations and reporting requirements on institutions of higher education.
  • The bill asks ED to alert foster youth and those who were in the foster care system about their potential eligibility for student aid by adding a box to the Free Application for Federal Student Aid so that ED may identify these students.  ED is instructed to notify them about federal student aid and postsecondary education programs through the John H. Chafee Foster Care Independence Program.
  • In addition, the legislation includes language that will rename the Department of Education’s Office of Vocational and Adult Education to the Office of Career, Technical and Adult Education.

While programs affecting postsecondary education reside within the Department of Education, many low-skilled adults and youth also rely on Department of Labor (DOL) programs as they embark on a pathway to a postsecondary career. Most DOL workforce programs are restored to just under their FY 2012 funding levels.  However, the Employment Service is continued at its FY 2013 post-sequester level of $644 million.

The path to economic security for low-income students depends on a variety of supports that prepare them for well-paying jobs.  While this budget prevents backsliding and offers some stability in funding, including providing a modest increase to Pell Grants and funding to seed innovation, it still leaves many funding gaps. 

For a broad look at how the new budget affects low-income people more generally, please see this earlier post from CLASP.

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