Five Higher Education Budget Questions for Obama

By Ed Policy

Higher Ed Watch has some questions for the Obama administration about the president’s fiscal year 2011 budget request, which it released earlier this week. We hope these questions are helpful to policymakers, the news media, and the public in evaluating these proposals.

1) Legislation is pending in Congress to eliminate the Federal Family Education Loan (FFEL) program and move all new federal students loans to the Direct Loan program. Under the House-passed proposal (H.R. 3221), the savings from this change would be spent on a number of new and existing education programs, including Pell Grants, school construction, and community college reform grants. The president’s 2011 budget states that the administration “supports mandatory funding for priority education programs that are included in this legislation.” It’s unclear, however, which education programs in the pending bill are considered a “priority” by the administration. Given that the House-passed bill creates $77.4 billion in new education spending over ten years, but the president’s 2011 budget request shows that changes to student loan programs in the bill will save only $45.6 billion over that time, are there any programs in H.R. 3221 that the administration would be willing to forgo? Or does the administration support the additional deficit spending that would occur under H.R. 3221 according to its own estimates?

2) Last year, the president’s 2010 budget request proposed using all savings from eliminating the FFEL program to make the Pell Grant an entitlement, removing it from the annual appropriations process. The 2011 request includes the proposal again. However, legislation pending in Congress would use only some of the savings to increase Pell Grant funding without making it an entitlement, and would spend the remaining savings on school construction funding and other programs. The president’s 2011 budget states that the administration supports the pending bill (H.R. 3221). Can the administration support both the House-passed legislation and a Pell Grant entitlement? Does the administration plan to make a renewed push for a Pell entitlement in the future? And do Obama officials believe that Congressional resistance to the proposal — particularly among budget hawks and appropriators — can be overcome?

3)The campus-based aid programs — Federal Work Study, Perkins Loans, and Supplemental Educational Opportunity Grants (SEOG) — are intended to assist low-income students with college expenses. The federal government provides campus-based aid funds to postsecondary institutions, which then award them to their students. However, the formula the government uses to distribute the aid overwhelmingly benefits elite public and private colleges and universities, even though these institutions serve a relatively small proportion of low-income students. The administration has criticized this formula and proposes changing it for the Perkins Loan program. However, the president’s 2011 budget request would leave the formula unchanged for the SEOG and work study programs. Does the administration plan to address this discrepancy in the future?

4) The president’s 2011 budget request includes $64 million for the Fund for the Improvement of Postsecondary Education (FIPSE), a program that awards competitive grants to support innovative reform and improvements in higher education. As the Obama administration knows, FIPSE is a favorite place for lawmakers to fund earmarks for colleges and universities in their home states and districts. In fiscal year 2010, Congress included over $100 million in special projects under FIPSE. The president’s 2011 budget proposal does not include any funding for earmarkes under FIPSE, and the president has generally taken a strong stand against Congressional earmarks. Will President Obama take any special action to ensure Congress honors his FIPSE budget request for 2011? Or is the FIPSE program an exception to the administration’s opposition to Congressional earmarks?

5) The Obama administration has put a very high priority on increasing the academic preparation and college awareness of low-income students. However, for the second year in a row, the president does not seek to increase spending on the federal government’s two main middle school and high school intervention programs, the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) and the TRIO programs for disadvantaged students. Each would remain at its fiscal 2010 funding levels of $323 million and $910 million respectively. Instead,  President Obama calls on Congress to spend $3.5 billion over five years (using savings derived from eliminating lender subsidies) to create a new College Access and Completion Grant program, which would provide grants to states and colleges to carry out many of the same types of activities as those programs do. Why has the administration left these programs level funded? Does it believe that they are ineffective? Has the administration put any thought into consolidating these programs, as we have suggested?

For all of the New America Foundation’s Federal Education Budget Project questions on President Obama’s fiscal 2011 budget request, click here. To read a summary and analysis of the proposed budget, click here. We hope you find both of these documents helpful and useful.