Last Friday the U.S. House and Senate along with the White House agreed to a long-term continuing resolution that would fund the federal government for the remainder of FY 2011.  The deal reduces federal spending by $38.8 billion.

Congress also passed a short-term budget gap bill that expires this Thursday which will allow for time to develop the full legislation needed to implement the agreement. The short-term budget gap bills includes $2 billion in reductions.

The budget deal preserves the maximum Pell Grant but ends year-round Pell grants (See summaries posted by the House and Senate Appropriations Committees). In addition, the budget makes reductions to several research and education programs.   The bill would eliminate the Byrd Honors Scholarship Program and the Leveraging Educational Assistance Partnership (LEAP) program and reduce funding for several programs without completely eliminating them. These cuts include:

• $20 million cut from the Federal Supplemental Education Opportunity Grants (SEOG)
• $25 million cut from the Federal TRIO Programs
• $20 million cut from the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP)

The summary posted by the House Appropriations Committee also indicates a 0.2% across-the-board cut for all federal programs. It remains unclear exactly how this across-the-board cut will affect federal student aid programs.

Overall, the bill cuts federal spending by nearly $40 billion, the largest cut to federal spending in a single year. It cuts a host of education programs including Teach for America, Even Start, and Education Technology State Grants, as well as other federal programs including emergency first responders, the National Endowment for the Arts and high-speed rail. Cuts to ED programs were relatively small compared to cuts to the Departments of Transportation, Housing and Urban Development, Commerce, Justice, Labor and Health and Human Services.

Congress is expected to vote on the bill as early as Thursday.