President Obama’s New Budget Adds Funds for Higher Education, MSIs

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by Charles Dervarics

President Obama on Tuesday unveiled a 2015 education budget plan with more funds for Pell Grants and a new initiative designed to spur innovation at historically Black colleges, Hispanic-serving institutions and other minority-serving universities.

While most programs for low-income students would gain small increases or see their funding frozen, a major theme of the new budget is targeted investments. In addition to the new initiative for minority-serving colleges, the president also proposed an incentive fund to support colleges that are graduating more financially needy students.

Education Secretary Arne Duncan said the goal is to “reward colleges that graduate many low-income students and encourage colleges to improve performance in that area.”

Covering the fiscal year set to begin in October, the budget includes a $100 increase in the top Pell Grant, meaning that the neediest students could receive a grant of $5,830 next year. Overall, the budget would commit nearly $34 billion for Pell in 2015.

The proposed College Success Grants for Minority-Serving Institutions would receive $75 million in start-up funding. Colleges could apply individually or through consortia in a competitive grant program that includes these areas of emphasis:

  • Partnering with school districts and schools to provide college recruitment and awareness;
  • Establishing high-quality, dual-enrollment programs for high school students;
  • Redesigning high enrollment courses, based on evidence, to reduce costs and improve student outcomes;
  • Providing need-based student aid with incentives for on-time completion; and
  • Providing comprehensive academic and non-academic student support services.

Applicants would have to set performance goals for these four-year grants, with full funding contingent on meeting these goals.

The program would “support innovations that reduce costs and improve outcomes,” Duncan said.

Another far-reaching element of the budget plan is a ten-year, $7-billion initiative to reward colleges that graduate a large share of their low- and middle-income students. The College Opportunity and Graduation Bonus would begin with $647 million in initial funding next year.

Budget documents state that the bonus would be equal to the number of Pell recipients who graduate on time multiplied by $1,000 per student for four-year colleges, $700 per student for two-year colleges and $350 per student for less-than-two-year institutions.

The budget states that the initiative would “support innovations, interventions and reforms to further increase college access and success” including need-based financial aid, academic and student support services, and technology-based learning.

Duncan said this initiative and others targeted by the budget for K-12 education seek to address opportunity gaps nationwide. In K-12 education, the budget would earmark $300 million for a new Race to the Top competition centered on equity and opportunity, where funding would be focused on the highest priority students.

“Despite the encouraging progress we’ve seen, wide opportunity and achievement gaps continue to hurt many families, which puts our nation’s economy and future at risk,” he said.

Elsewhere, the budget would hold the line on most other key education programs. Support for HBCUs would increase slightly to $309 million, while Hispanic-serving institutions would receive $207 million. TRIO and GEAR UP would continue at $838 million and $302 million, respectively, and tribal colleges would receive $55 million.

Among other need-based financial aid programs, college work study would continue unchanged at $1.16 billion while the Supplemental Educational Opportunity Grant program would receive $975 million, same as current funding.

One other new initiative in the president’s budget is a focus on improving state public colleges and universities, which have faced some funding cuts in recent years. The budget would allocate $4 billion in competitive state grants to encourage public college improvements focused on college access and success. For example, colleges could forge new partnerships with K-12 schools, build stronger pathways to the workforce and promote transition from high school to college. States would have to match federal funds dollar for dollar and not reduce their own budgets for higher education.

This new initiative and others are expected to face opposition on Capitol Hill, however, particularly in the Republican-controlled House of Representatives. Rep. John Kline, R-Minn., chairman of the House Education and the Workforce Committee, said the president is attempting to “double down on failed policies” by spending more taxpayer money.

“In critical areas such as early learning, job training and higher education, the president wants to make an existing maze of programs even more costly and confusing,” he said.

Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, said the budget “isn’t a serious document. It’s a campaign brochure.”

But leaders in the Democrat-controlled Senate took a different view. Sen. Patty Murray, D-Wash., Senate Budget Committee chairman, praised the education investments and said the budget charts a fiscally responsible path. “Investments would be spread equally among defense and non-defense programs and would be paid for with a mix of responsible spending cuts and new revenue,” she said.

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