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California Association of Private Postsecondary Schools

A Rare Agreement

07/18/2012

Inside Higher Ed - July 18, 2012 - by Libby A. Nelson

Advocates for federal financial aid are greeting the House of Representatives' proposed budget for fiscal year 2013, scheduled to be formally considered today, with something unusual: a sigh of relief.

The Republicans’ proposal for funding the Education Department and other agencies in the upcoming fiscal year is just the opening salvo in a budget battle that most expect will last until after the election. But it is remarkably similar to a Democratic bill approved by the Senate Appropriations Committee last month.

Both bills would increase the maximum Pell Grant next year to $5,635; provide flat funding for federal work study, supplemental grants and other aid programs; and keep the budget for the National Institutes of Health, a priority for many research universities, at $30.6 billion for another year. (The Senate version of the bill would provide a $100 million increase for health research.)

The Republican proposal, though, would block funding for the Education Department’s program integrity rules for for-profit colleges, including the “gainful employment” rule, which evaluates programs’ eligibility for federal financial aid for their students through measures of loan defaults, payment rates and debt-to-income ratios. The House of Representatives voted last year to defund the measure, but the proposal wasn’t taken up by the Democrat-controlled Senate. The rules have also faced legal hurdles in recent weeks: a federal judge invalidated a key element in a July 1 decision.

Still, the proposed budget is a stark contrast with other Republican proposals in recent years, some of which would have made deep cuts to Pell Grants -- either by changing eligibility criteria or cutting the maximum grant across the board. In March, House Republicans called for limiting or reversing the growth of the Pell Grant Program, but made no proposal to do so in the budget proposed Tuesday.

While the largest financial aid programs appeared to escape without additional cuts, the fate of many smaller programs, including TRIO and GEAR UP, was unclear given the sparse information released by the panel Tuesday. So too with other areas that have suffered decreased funding in recent years, such as foreign language education.

But the budget appears not to make changes to Pell Grant eligibility, as the Senate version would do. One of those changes -- including a partial restoration of Pell Grants for students without a high school diploma or GED enrolled in specific types of programs -- were cheered by higher education lobbyists; another, which would stop students enrolled in online classes from using Pell Grants to cover living expenses, has drawn protest.

Despite the agreement with the Senate on funding for higher education, the budget proposal, which also includes funding for the Department of Health and Human Services and the Department of Labor, is likely to be a source of partisan controversy. Its focus is on cutting off federal money for the Affordable Care Act, the health-care overhaul passed in 2010. And policy riders -- including the proposal to defund the enforcement of “gainful employment” and other program integrity rules -- have already provoked outrage among Democrats.

Appropriations for Education and Health Research

FY12 (Current) FY13 (Senate proposal) FY13 (House proposal)
Maximum Pell Grant $5,550 $5,635 $5,635
All student financial assistance programs $24.5 billion $24.5 billion $24.5 billion
Other higher education programs $1.9 billion $1.9 billion $1.8 billion
National Institutes of Health $30.6 billion $30.7 billion $30.6 billion

A markup by the Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies is scheduled for 10 a.m. today.