Tag Archives: federal

What is the Status with Washington’s Anticipated Federal Dollars for 2010-2011?

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Congress continues to debate over the inclusion or exclusion of federal Medicaid dollars to states.

Twenty-eight states, including Washington, crafted budgets for FY10 assuming Congress would approve additonal Medicaid dollars.

Governors, including Washington’s Governor Gregoire,  from across the country lobbied Congress hard this week with an eye to the July 1 state budget deadline. The Medicaid extension is set to expire at the end of 2010, halfway through the fiscal year that begins in most states on July 1. 

The extension was first included in the 2009 economic stimulus bill. Since then the extension has faced a rocky road. Both chambers of Congress have passed different variations of the request and President Obama has called the aid necessary to avoid massive layoffs.

Despite this support, the extension and the dollars it would bring to states cotninues to be attached to congressional bills that die for one reason or another.

As Congress continues to move forward without securing the extension and funding, states are moving forward and beginning to consider their next steps. At question is how quickly cuts would have to be made if Mediciad dollars are not included in legislation passed by Congress.

For Washington the lack of additional federal Medicaid dollars would result in a reduction of $480 million to the state budget. If the dollars do not come through Washington’s budget reserves could be eliminated and the state would face an additional $200 million in budget cuts.

The Governor could make these cuts across-the-board or call the Legislature in for a special session.

Stay tune!

U.S. House Passes Supplemental Spending Package, Benefits to Higher Education

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On Thursday, the U.S. House of Representatives passed the Supplemental Appropriations Act of 2010 (H.R. 4899). The Act is a mixed bag for higher education.

H.R. 4899 included a provision to provide $10 billion to help school districts avoid educator layoffs. Though this is good news, the funding provision comes at the cost of reductions ($800 million) to several of President Obama’s key education initiatives. 

The initiatives vulnerable to reductions have been referred to as “new discretionary grant awards”. Among these awards includes a reduction of $500 million to the Race to the Top Round 2 awards. Washington is one of thirty states competing for Race to the Top dollars in the second round.

On a more positive note, the House bill includes $4.95 billion to pay down most of the $5.7 billion Pell Grant shortfall. The $4 billion included in the bill is not based on new estimates regarding the Pell Grant shortfall, but is the most the bill’s authors could include into the package of spending and offsets. If the package passes the Senate with the Pell Grant funding included there still remains a $717 million shortfall in Pell funding.

Finally, the Act passed by the House included a budget enforcement resolution that would limit discretionary spending for FY11 to $1.12 trillion, which is $7 billion less than the President requested in his budget in February.

The Act passed by the U.S. House must still be approved by the U.S. Senate.  As the Senate considers the Act, it is expected to face pressures from the education and higher education sectors, the U.S. House, and the White House which has indicated that the President would likely veto any final bill that includes reductions to education reforms.

U.S. Senate Rejects Certification on Private Education Loans

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Yesterday, the U.S. Senate rejected a House-sponsored amendment in a bicameral conference committee on the Restoring American Financial Stability Act of 2010 (S.3217) that would have mandated institutional certification on all private student loans.

This is a blow to many stakeholders in the private education loan world, of which most supported full school certification.

As shared in this blog in mid-May, the House-sponsored amendment would require providers of non-federal student loans to get colleges’ approval before they make such loans to students. The intention being to assure that borrowers turn to more-expensive private loans only after they have exhausted federal, state, and institutional grants or at least less costly federal student loans.

The Chairman, Senator Chris Dodd (D-CT), of the U.S. Senate Banking Committee stated, “the Senate cannot accept this provision..the Senate cannot agree to mandatory certification. I authored self-certification with Senator (Richard) Shelby (R-AL)…and it’s far too early in our view to make a judgment if we need something more.”

Dodd did note that the bill includes other “strong protections” for private student loan borrowers, including new Consumer Financial Protection Bureau (CFPB) oversight of private education loans and a new private student loan ombudsman to assist students who need help with their private loans.

Conferees are expected to continue to meet this week in hopes of finalizing negotiations so that the bill can be passed by Congress prior to the July 4 recess.

On This Date Over Six Decades Ago the G.I. Bill Became Law

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Sixty-six years ago, on June 22, 1944 President Franklin D. Roosevelt singed into law the Servicemen’s Readjustment Act (a.k.a. G.I. Bill of Rights).

The impact of this single piece of legislation has been monumental over the years.

  • Before WWII fewer than 15 percent of high school graduates earned college degrees. By 1950 nearly 500,000 Americans had graduated from college compared to 160,000 in 1939 as a result of the educational benefits provided under this legislation.
  • Under this program, approximately 2.4 million ex-service personnel took out home loans provided by the Department of Veterans Affairs, which were low-interest and zero-down- payment loans.
  • Under the 52-20 clause, all former service personnel were entitled to receive $20 a week for 52 weeks a year, while they looked for work.

U.S. House Committee Holds Hearing on Credit Hours

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Yesterday, the U.S. House of Representatives’ Education and Labor Committee held a hearing to examine how regional accrediting agencies assess the quality of higher education programs.

At issue was the definition of a credit hour and the perception that agencies are setting too lax a standard on the amount of time students spend on course work to earn academic credit. The Committee discussed whether requiring a minimum definition of a credit hour and/or program length would help prevent institutions from inflating credit hours to reap more tuition and state aid dollars.

The issue of “credit hour” definition initially emerged in audits conducted by the U.S. Department of Education’s Office of Inspector General of three accrediting agencies. In a May report, the Inspector General argued that a regional accrediting agency was not being strict enough when assessing the amount of credit awarded in a course offered by one institution.

The Chairman of the Committee, Rep. George Miller (D-CA) stated, “I am particularly concerned about institutions inflating credit hours in order to garner more student aid than is justified.”

The ranking Republican on the Committee, Rep. Brett Guthrie (R-KY), agreed with Miller with regard to the need to ensure institutions are fulfilling their missions, but expressed concerns about the federal government dictating what constitutes a quality institution of higher education.

The proposed rules being considered by the U.S. Department of Education would define a credit hour as “one hour of classroom or direct faculty instruction and a minimum of two hours of out of class student work each week for approximately 15 weeks for one semester or trimester hour of credit”.

The proposed rules also includes an exception to the definition of a credit hour. The exception defines credit hour as “institutionally established reasonable equivalencies for the amount of work required in [the previous definition] for the credit hours awarded, including as represented in intended learning outcomes and verified by evidence of student achievement.”

If the proposed rules regarding credit hour are put in place,  the U.S. Department of Education publicly stated it would closely watch the implementation of the rule and evaluate whether the definition of a credit hour is effective in protecting students and taxpayers.

U.S. House Committee Schedules Hearing on Accreditation Related Issue

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Next week (June 17) the U.S. House of Representatives’ Education and Labor Committee will hold a hearing to examine how regional accrediting agencies define the “credit hour” as the agencies judge the academic quality and rigor of the institutions they accredit.

The issue of “credit hour” definition emerged in audits conducted by the U.S. Department of Education’s Office of Inspector General of three accrediting agencies. The concern focused on the perception that agencies are setting too lax a standard on the amount of time students spend on course work to earn academic credit.

Potential Action on Federal Supplemental Legislation

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The U.S. House of Representatives may take up the U.S. Senate recently passed version of a supplemental appropriations bill soon. The move to take up the bill would bypass the more common practice of sending the bill through the committee process to be amended and changed by members.

The Senate’s version of the bill does not include $23 billion in education money intended to avert thousands of teacher layoffs at elementary and secondary schools.  Senator Tom Harkin noted that the Senate dropped this language because the 60 votes necessary to pass the provision were not there.

Another difference in the Senate version compared to the House version is the Senate bill does not include the $5.7 billion for Pell Grants in the House bill.

When asked about the differences between the bills, U.S. House Majority Leader Steny Hoyer said, “we’re going to work on it.”

Funding for Federal Higher Education Programs May be Reduced or Eliminated

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Today, the White House asked federal agencies to provide plans to reduce their budgets by 5 percent by eliminating the worst-performing programs. This request is part of the White House’s pledge to freeze spending unrelated to national security over the next three years.

Among the programs to be considered for reductions include several higher education related programs. 

At a news conference today, Peter Orsazg, President Obama’s budget director, singled out mathematics and science education, youth mentoring, and job training as potential higher education programs that may be reduced.  He noted that the federal government offers more than 110 programs focused on science, technology, and math education (STEM), 100 mentoring programs, and 40 employment programs.

According to Orszag, “this redundancy wastes resources and makes it harder to act on each of these worthy goals.”

Federal Dollars for Washington’s State Budget Still Alive

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Late last week concerns arose about the likelihood that states would receive federal Medicaid match dollars.  However, it appears that these federal dollars may still be alive in the Senate.

The Office of U.S. Senator Patty Murray reported today that a federal Medicaid match worth $480 million to Washington state has been included in the American Jobs and Closing Tax-Loopholes Act now before the Senate.

This is in stark comparison to the U.S. House of Representatives  which passed legislation without language to extend federal Medicaid dollars for six-months, a $23 billion investment.

Washington, along with 30 other states, incorporated federal dollars to assist in offsetting state budget shortfalls. Washington’s 2010 supplemental operating budget anticipated $480 million in additional resources based on the Federal Medical Assistance Percentage (FMAP) enhancement being extended by an additional six months through June  2011.

Without these funds ($480 million) the dollars in reserves ($450 million) planned as a cushion would be eliminated, leaving the state vulnerable to changes in tax revenues.

If the American Jobs and Closing Tax-Loopholes Act passes with the federal funds intact, the bill will have to return to the House for approval.

Additional Disclosures May Be Required for Student Loan Borrowers

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U.S. Representative John Adler (D-NJ) recently introduction legislation that would require higher education institutions to provide information to student loan borrowers about the benefit of creating a power of attorney or living will for financial, legal, and medical decision making in the event of the death, incapacitation, or disability of the signer or cosigner.

The new legislation (H.R. 5458) would cover both private and federal loans. In addition the bill would require any private education lender to clearly define the borrowers’ obligation, including the effect the death, incapacitation or disability of the signer or cosigner would have on any such obligation.  Finally if there is a cosigner the private educational lender would have to discuss the benefit of credit insurance that would protect the signer and any cosigner in the event of death, incapacitation or disability.

The bill has been referred to the U.S. House Financial Services and Education and Labor Committees.