Yesterday President Obama released a proposal for funding the federal government for FY15. The proposal would make several changes to higher education.
The request would provide level-funding for most student aid programs and basic research programs, but would provide funding for several ambitious new higher education proposals.
The budget would maintain discretionary funding for the Pell Grant program at the same level as last year. This will allow the maximum award to jump by $100 to $5,830 because of an automatic, mandatory increase in funding. With regard to the Pell Grant the budget also issues a call to “strengthen academic progress requirements in the Pell Grant program to encourage students to complete their studies on time” and restores a pathway to Pell Grants for students who don’t have a high school diploma or GED.
The budget also makes permanent the American Opportunity Tax Credit and makes changes to federal financial aid programs.
The more daring proposals include:
- College Opportunity and Graduation Bonuses (10-year budget, $7 billion): The program would reward colleges that successfully enroll and graduate significant numbers of low- and moderate-income students on time, and encourage all institutions to boost performance by providing grants to institutions based on their number of on-time Pell graduates. Institutions would be allowed to use these funds to expand need-based financial aid, enhance student instruction and support strategies, and adopt other best practices to increase college access and success for low-income students.
- State Higher Education Performance Fund ($4 billion): A competitive state grant, these funds would support systemic efforts to reform and improve the performance of public higher education systems and make college more affordable, especially for low-income students.
- First in the World ($100 million): Building on the 2014 competition, the budget increases funding to support innovative strategies and practices shown to be effective in improving educational outcomes and making college more affordable for students and families.
- College Success Grants ($75 million): A competition that would support sustainable strategies to reduce costs and improve student outcomes through awards to Historically Black Colleges or Universities and other Minority-Serving Institutions.
- Pay As You Earn (PAYE) Expansion: Extend PAYE to all student borrowers, regardless of when they borrowed. The budget also would reform PAYE to safeguard the program for the future and ensure that program benefits are targeted to the neediest borrowers.
The President’s budget is largely a political document. Congress has already set budget levels for federal spending. Senate Democrats have commented that they will not produce a budget but will instead directly allocate funding program by program. The House Republicans have indicated their budget proposal will be released later this month.