Yesterday the Senate narrowly approved a $2.8 trillion budget after a day of marathon voting. The passage of the FY 2007 budget came just hours after the Senate had passed a measure to increase federal borrowing power to avert a govenrment default.
A win for higher education was the passage of the Specter-Harkin Amendment to the FY 2007 budget (sponsored by Senators Arlen Specter (R-PA) and Tom Harkin (D-Iowa), which increased total discretionary funding for health and education (including student aid) by $7 billion.
However, these and other changes mean that reaching a final budget deal with the House will be difficult, given the resistance to new spending. I will keep you updated on the
FY 2007 budget and education funding as it winds it way through the legislative process.
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Friday, 17 Mar 2006
Thursday, 16 Mar 2006
Status of Sellinger Aid
The Governor's budget fully funds the Sellinger Program in FY 2007. In addition, we are told that members of both budget committees strongly support the independent institutions and the Department of Legislative Services (DLS) has not recommended any reductions. A decision by the Senate Budget and Taxation Committee and the House Appropriations Committee is expected within the next two weeks.
Increase in Financial Aid Funding
The FY 2007 budget contains $17.7 million in new financial aid funds, mainly for need-based programs. The increase includes $15 million in additional funds for the Education Assistance (EA) program and $2.3 million in funds for the Guaranteed Access (GA) program.
President's Budget Update
President Bush’s FY 2007 budget was submitted to Congress on February 6. Two-thirds of the spending in the President’s $2.7 trillion budget is for entitlement programs (Social Security, Medicare, as well as interest payments on the national debt.)
The remaining third of the budget, or $871 billion, is proposed for discretionary (appropriations) spending. Aside from funding for Defense and the Department of Homeland Security, which was increased, other domestic discretionary spending was cut and projected to remain frozen until 2011.
The overall Department of Education funding is cut by $2.1 billion or 3.8 percent. This includes:
• $734 million in cuts to student aid.
• A Pell Grant maximum of $4,050 for the fifth year in a row.
• The dismantling of the Perkins Loan program, and elimination of funding for Talent Search, Upward Bound, GEAR Up, and Vocational Education State Grants.
• Flat funding for Federal Work-Study, Graduate Education programs, and SEOG (Supplmental Educational Opportunity Grant) after four years of cuts.
Deficit Reduction Act Reauthorizes Student Loan Program
On February 8, 2006, President Bush signed the Deficit Reduction Act of 2005 into law, and at least one lawsuit has already been filed to challenge the constitutionality of the act since a typographical error caused the House and Senate versions of the bill to be slightly different.
The bill passed the House in mid-December by a vote of 212 to 206, then it was slighly modified to comply with Senate rules before passing on a 51-50 vote. The House returned in early February and passed it by a close vote of 216 to 214, with 13 Republicans voting against it.
Unfortunately, the student loan programs provided 28 percent of the budget savings, or approximately $12 billion. There were other student loan spending provisions attached to the budget bill including two new grant programs for high-achieving Pell-eligible U.S. citizens: Academic Competitive Grants and Smart Grants (for those who major in science, math, and certain foreign languages.)
Status of the HEA Reauthorization
The budget reconciliation included some sections of the HEA reauthorization: the loan provisions, need analysis changes, removal of the 50 percent rule on distance education, enactment of the SMART and Academic Competitive Grants, etc.
The other HEA provisions must wait for a subsequent reauthorization process -- those provisions include accreditation issues, academic diversity, teacher education provisions, international education, and graduate programs. The second Higher Education Extension is set to expire on March 31, 2006, and Congress will most likely pass another extension of the law. The prospects for HEA reauthorization this year are uncertain.
Questions or comments? Contact Wendy Belzer Litzke at wendy.litzke@goucher.edu or at 410-337-6042.