President Obama presented a 2012 budget on Monday that has limited increases for education but a commitment to protect the current $5,550 maximum Pell Grant, which is the subject of potential cuts on Capitol Hill.
The Obama plan would not increase the maximum Pell Grant but would provide $41 billion to shore up the program’s shaky finances due to heavy use during this recession. This figure is $18 billion above federal Pell spending as recently as fiscal year 2010, according to U.S. Education Department data.
To continue the $5,550 maximum grant, the administration is proposing a series of cuts. In higher education, the leading cost savers would end in-school interest subsidies for graduate students and eliminate the year-round Pell Grant, a new program through which students can get more than one grant per year if they choose accelerated year-long studies.
“We are cutting where we can to invest where we must,” Education Secretary Arne Duncan said in presenting the plan. “These are challenging times, but we can’t delay investments that will secure our future. We must educate our way to a better economy by investing responsibly, advancing reform and demanding results.”
The budget plan comes amid heavy pressure from the new Congress for drastic spending cuts across government. Late last week, House Republicans unveiled a plan that would cut $100 billion in domestic programs, including a projected 15 percent cut in Pell funding. Education groups said that plan, if enacted, would chop the maximum grant by $845, to $4,705.
As a result, most higher education analysts were supportive of the president’s plan. “Students recognize the political realities requiring cuts to the Pell Grant in order to save it from deeper reductions,” said Lindsay McCluskey, president of the United States Student Association.
However, it is “regrettable” that the administration must propose offsetting cuts to protect Pell, said Justin Draeger, president of the National Association of Student Financial Aid Administrators.
“Eliminating subsidized Stafford loans for graduate students and two Pell Grants in an award year will undeniably have a negative impact on students, but maintaining funding for the Pell program, which could be facing a $20 billion shortfall in fiscal year 2012, is our highest priority,” he said.
Across government, the Obama budget totals $3.7 trillion, with a deficit of $1 trillion. Republican leaders criticized the plan for not doing enough to clamp down on spending. “The president’s budget is the clearest sign yet he simply does not take our fiscal problems seriously,” said Senate Minority Leader Mitch McConnell, R-Ky. He called it a “patronizing plan” that ignores the concerns of typical Americans.
But Duncan said it is significant that the administration is making targeted investments in education. In addition to protecting Pell from cuts, the plan would provide an extra $67 million for federal TRIO programs that help at-risk students prepare for and succeed in college. Support for minority-serving institutions also would continue at more than $800 million a year. The plan also includes $175 million in competitive grants to increase college completion rates.
At the K-12 level, the president is proposing to continue his Race to the Top reform program, with $900 million earmarked for new competitions among school districts. After-school programs for at-risk children also would receive a $100 million increase.
But the administration would cut state funding for career and technical education by $265 million, or more than 20 percent. Much of that reduction would come through elimination of the tech-prep grant program that supports partnerships between high schools and community colleges.
“These are very tough choices but with rising demand, we have to stretch our dollars as far as possible and do more with less,” Duncan said.
The plan now goes to Congress for review.