Feb. 5, 2008

The Feds Giveth, and Taketh Away

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As President Bush released his budget plan Monday for the 2009 fiscal year, his administration managed to perturb most of the college and university officials who have grown accustomed to being disappointed by his budgets for higher education: community college officials frustrated by the administration’s continued assault on funds for career and technical education, research advocates disappointed by his flat-line budget for the National Institutes of Health (see related article for a full look at the administration’s plans for science and technology programs), and supporters of the Supplemental Educational Opportunity Grant and Perkins Loan Programs, which the administration once again recommends exterminating.

But the president managed to add one newly aggrieved group to the list of those feeling wronged by his budget proposal this year: backers of historically black universities and colleges that serve large numbers of Hispanic, American Indian, Asian and other minority students. That’s because the budget proposal for the Education Department calls for cutting back on budgeted appropriations for programs for minority-serving institutions that received funds in last fall’s budget reconciliation bill. For instance, the Bush budget plan would cut annual spending for the Strengthening Historically Black Colleges and Universities Program by $85 million because the reconciliation bill directed that amount of money to the institutions each year between 2008 and 2012.

Similarly, the administration’s 2009 budget plan would cut discretionary support by $23 million for tribally controlled colleges, which received a $30 million boost for 2008 and 2009 from the budget reconciliation act, and cut $11.6 million from the Strengthening Alaska Native and Native Hawaiian serving Institutions Program, which received $15 million from the budget bill last year. In addition, the White House would reduce discretionary support for Hispanic serving institutions under Title V of the Higher Education Act by about $18 million, citing $100 million in non-appropriated mandatory funds that Congress directed toward Hispanic institutions for science curriculums and to facilitate the transfer of students into and out of their institutions.

“It makes absolutely no sense to be cutting funds for the most underfunded of institutions at a time the economy is suffering and we need more than ever to educate a fast-growing segment of our society,” said Antonio Flores, president of the Hispanic Association of Colleges and Universities. “I just hope that the Congress, in its wisdom, does not allow this surprising and counterproductive action to happen.”

“The funds allocated to ‘Strengthening Historically Black Colleges and Universities’ in the FY ’09 budget request released by the Department of Education today — $85 million less than last year — are woefully inadequate to ensure that minority students stay in and graduate from college,” said Selena Singleton, director of policy, advocacy, and government relations for the National Association for Equal Opportunity in Higher Education, which represents 120 historically and predominantly black colleges. “With the cost of a college education increasing, a looming recession, and an increasingly global economy, supporting our nation’s HBCUs is the only way to ensure that a college degree is an attainable goal for more students. The president’s budget makes it more difficult for HBCUs to do this important work.”

Michael L. Lomax, CEO and president of the United Negro College Fund, called the president’s proposal “disastrous for HBCUs and the tens of thousands of young Americans who are working so hard to achieve their dreams of a college education.”

Department officials offered little explanation for the decision, referring a reporter to language contained in the agency’s budget documents that said: “[T]he nearly $120 million reduction proposed [for minority serving institutions] for 2009 reflects an offset of newly provided mandatory funding in 2008 and 2009 for Title III activities under the College Cost Reduction and Access Act (CCRAA). For example, the request would reduce discretionary funding for Strengthening Historically Black Colleges and Universities by $85 million, or the amount of new mandatory funding provided for this program by the CCRAA, resulting in the same overall funding level as provided in 2007.”

But House lawmakers who pushed for the additional mandatory funds for black colleges and other institutions with significant enrollments of minority students had no intention of having those funds replace money that Congress might appropriate, a House aide said. “Our goal in providing funding for minority-serving institutions under the College Cost Reduction and Access Act was to make up for the severe funding shortfalls these institutions have faced at the hands of the Bush administration,” said Rachel Racusen, a spokeswoman for Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee. “It is extremely surprising and disappointing that the President is again proposing damaging cuts in resources for minority-serving institutions.”

Apart from the developments involving minority serving colleges, college leaders could pretty much dig out their news releases and statements from last year to respond to the administration’s 2009 spending plan, because the budget itself closely resembled last year’s blueprint, in ways that had benefits and pain for higher education. College lobbyists said they expected the recent past — in which the administration proposes killing or slashing many higher education programs, and Congress fights to save them — to repeat itself, and that the Bush budget would have even less meaning because the president is in his lame duck year.

The 2009 budget plan recommends a $2.6 billion increase in the biggest and most important source of financial aid for needy students, the Pell Grant Program, which would amount to $69 per grant and would, with the $490-per-grant rise that Congress mandated in the reconciliation legislation, allow the maximum Pell Grant to rise to $4,800 in 2009. In a telephone call with reporters Monday, Education Secretary Margaret Spellings boasted that Pell spending had risen by 116 percent since President Bush took office in 2001.

But as was the case in 2008, the administration proposed paying for the Pell rise in part by eliminating other programs, including the supplemental opportunity grants and the Perkins Loan Program, both of which also generally support low-income students. Those programs were spared by Congress last year, as was the Leveraging Educational Assistance Partnerships Program, which was also included among the 47 programs that Spellings proposed for elimination because they are “duplicative, narrowly focused, or unable to demonstrate effectiveness.”

“The $69 increase does nothing more than return the program to its FY 2007 level,” the Student Aid Alliance, a confederation of campus and student groups, said in a prepared statement. “Unfortunately, the president offsets this increase by calling for the elimination of other critical student aid programs. As a result, under the president’s budget, more than 1.5 million low-income students will lose financial aid crucial to beginning or continuing their college educations.”

Department officials sought to counter that math in their own budget documents, which suggest that the number of postsecondary students who would be aided by the agency’s aid programs would rise to 10,857,000 in 2009, up from 10,560,000 this year. But that includes sizable increases in students receiving federal loans. But they also argued that the department was going with proven winners in supporting expanded funds for Pell Grants over other programs “that are less important,” Spellings said in her press call. “This is a budget that has some tough choices.”

The administration’s plan also calls for eliminating $1.272 billion in funds distributed in 2008 through the Carl D. Perkins Career and Technical Education Act, including $103 million for the Tech-Prep Education State Grants that largely flow to community colleges. “No funds are requested for Tech Prep Education State Grants because the program is narrowly focused and has had only a limited impact,” according to the Education Department’s budget documents.

Spellings and other administration officials argue that the No Child Left Behind Program would pick up the slack, since it is designed to improve the skills of students coming out of high school. But two-year college and other officials who focus on developing the work force say the administration is shortchanging job-related education at a dangerous time, given the pending economic downturn.

The administration’s budget proposal for the Education Department would also:

• Delay for at least a year implementation of the new public interest loan program that Congress created as part of the budget reconciliation law last fall, and eliminates an interest rate subsidy that that law called for providing to low-income borrowers, which the department said is unnecessary because “comparable benefits are already available under economic hardship and unemployment deferments.” That decision drew a rebuke from Sen. Edward M. Kennedy, who accused the department of embracing “irresponsible, anti-student policies for student loan borrowers.”
• Create a 50 percent tax credit for the first $2,000 that moderate- and low-income parents invest annually in a 529 tuition-savings account. The credit would reimburse taxpayers for between 10 and 50 percent of the amount contributed, depending on the taxpayer’s filing status (single or family, etc.) and income.
• Provide $363 million in 2009 for a new loan program for short-term job training for “dislocated, unemployed, transitioning or older workers.” (Some observers noted the irony of proposing the creation of a new job training loan program at the same time the administration is proposing ending
• Double funds, to $100 million from the current $48.3 million, for grants to states to create statewide data systems designed to improve accountability in K-20 education. The department has pushed the state efforts in part because its interest in creating a federal “unit records” system, which the education secretary’s Commission on the Future of Higher Education endorsed, has been scuttled by opposition among Republican Congressional leaders and many private colleges, which have fought it on privacy grounds.
• Return to the federal treasury $652 million that the department was unable to distribute in 2007 and 2008 through the Academic Competitiveness Grant and Science and Mathematics Access to Retain Talent (SMART) Grant Programs, which have been coolly received and difficult to allocate in higher education because of the strict limits that Congress imposed on the programs. Among other things, they are unavailable to part-time students and to permanent residents who are not U.S. citizens.

The administration’s budget documents also add more fuel to the fire on the relative costs of the two federal loan programs. New numbers from the Office of Management and Budget suggest that the guaranteed loan program is now less expensive to operate per loan than the competing direct loan program, given the hefty cuts in subsidies to lenders made in last fall’s budget reconciliation measure. But direct lending supporters say the data clearly show that that is so only because high-risk borrowers are consolidating their loans into direct lending.

Other parts of the administration’s budget blueprint also had ramifications for higher education. Among them:

• The president’s plan recommended an appropriation of $144.3 million for the National Endowment for the Humanities, which would represent a slight drop from the $144.7 million the agency is receiving this year. (Note: This has been corrected from an earlier version of the article.)
• The Bush budget would also wipe out new funds for the National Historical Publications and Records Commission, which scholars have consistently fought to keep. The agency, part of the National Archives and Records Administration, received $8 million in 2008.
• The AmeriCorps national service program would receive $274 million in 2009, up from $257 million this year, even as other parts of the Corporation for National and Community Service would see reductions.

Below is a table containing detailed information on how major higher education programs would fare in the president’s 2009 budget:

— Doug Lederman

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