Investing in Our Students, Teachers, and Institutions: The Proposed FY 2012 Postsecondary Education Budget

• By Fritz Edelstein
• 02/01/11

Under very tight budget constraints, President Obama released on February 14, 2011 his proposed budget for fiscal year 2012. The programs within the U.S Department of Education fared well, including some new investments for postsecondary education.

This year is very different than previous ones. The stage is set with the House of Representatives under the control of the Republicans, the Senate under the Democrats, and a Democrat in the White House. Battle lines are drawn as a result of the 2010 mid-term election and a very deep fiscal deficit.

Presently, two critical budget debates are underway in Washington, D.C., and a third pending later this spring. One is the proposed FY 2012 budget (described above) and the other is funding for the current FY 2011, which is currently under a Continuing Resolution (CR) — no final appropriation. The most recent CR expires on March 4. If the two houses cannot agree on a new CR, the federal government will shut down, and right now as a result of the House vote on February 19th, this is the direction things are going.

House Republicans were successful in cutting $61B from the FY 2011’s remaining eight months, of which about $5B is education funding. These cuts will not be supported in the Senate during the week of February 28. No program was spared the budget ax, even those which had been sacred to Republicans over the years. Cuts were made to Head Start, Title I, Pell Grants, National Public Radio, Corporation for Public Broadcasting, Americorps, and many other education and related programs. Also, this is a signal as to what may be in store for the FY 2012 budget proposal.

The week of February 28 will be a very telling week. Will the two houses be able to come to a compromise or extend the CR? And the third debate that has yet to begin in Congress is extending the debt ceiling for the nation. Depending on your point of view, it might be seen as a perfect storm to address our budget priorities, tax reform, and the deficit.

The Department of Education’s proposed budget for FY 2012 has both investments and cuts. Of the five core priority areas in the education budget, postsecondary education is included in three of them. These are:

• Great Teachers and Leaders in Every School
• College Completion
• Supporting Students At-Risk

The most significant investment in postsecondary is in Pell grants. This proposed budget provides for $41.2B for Pell grants. The administration expects an increase in the demand for Pell grants to reach 9.6M students in 2012. This is up from 6M in 2008. The president’s budget protects the recent increase of the maximum award of $5,550 and ensuring that all eligible students will be served. There will be a move to reduce the size of the maximum award.

In order to sustain this level of funding for Pell grants, the budget proposal saves billions of dollars by eliminating the subsidies for graduate students with loans and eliminating a provision that enables some students to receive two Pell grants in a single year.

It is estimated that the combination of Federal postsecondary student aid and selected tax benefits in this budget proposal will grow to $181B in FY 2012. This is up from $140B in FY 2009.

Other significant investments include:

• $67M increase for TRIO programs for a total budget of $920M
• $185M for Presidential Teaching Fellows
• $757M for Supplemental Education Opportunity Grants
• $150M for College Completion Incentive Grants (a total request over five years of $1.25B)
• $40M for Hawkins Centers of Excellence for teacher education in minority-serving institutions
• $323M for GEAR Up (level funding request)

Also, there is a proposal to expand and modernize the Perkins Loan program to provide $8.5B in new loan volume annually which is eight-and-a-half times the current volume. The program will also reward institutions with solid college completion outcomes.

Several of the new teaching programs such as the new Effective Teaching and Learning: STEM will require involvement of higher education institutions to provide professional development for STEM teachers and there is a similar program for Literacy to support state and local efforts to improve literacy instruction.

There is continued support for minority-serving institutions that are level funded at $485M for Historically Black Colleges and Universities, and $117.4M for Hispanic Serving Institutions.

Even with all of this positive news, one must be quite wary of the budget and appropriations battles that have already begun for both the current fiscal year and FY 2012. Clearly, deficit reduction is on the minds of most Americans and definitely on the congressional agenda. OMB Director, Jacob Lew, has already received significant criticism for this budget proposal while testifying on the Hill and asked why the president did not take any of the advice given by his own deficit commission.

Stay tuned. The action is just beginning. If nothing else, this budget proposal frames the debate about priorities, philosophy, and strategies for federal spending and tax reform. Round one should be completed around March 4 when the CR expires. For a complete view of the Department of Education’s proposed FY 2012 budget go to: http://www2.ed.gov/about/overview/budget/budget12/index.html.

Fritz Edelstein is a principal in the Public Private Action, a consulting group. His work focuses on strategic government and constituent relations; business development strategy; advocacy research and policy analysis; strategic planning and resource development; and advocacy, outreach and public engagement. This work includes producing Fritzwire, the leading education Internet newsletter providing timely information on education and related issues. He can be reached at [email protected].