Education Secretary Duncan Highlights Budget Proposals For College

This is long but worth reading because of so much new policy. Note the last section includes a new 2.5 billion program for state incentives to improve college completion rates for low income students.


U.S. Secretary of Education Arne Duncan today highlighted provisions of the Department of Education’s proposed FY 2010 budget overview that would dramatically expand student financial aid while making it simpler, more reliable and more efficient.

“We need to invest in our economic future and enable our kids to compete in today’s global environment.  America’s students and workers need a higher level of education and training,” Duncan said.  “President Obama’s proposed budget calls for a historic investment to make college more affordable and accessible and to help more students succeed once they get there.”

“The new funding announced today represents a significant expansion of our federal student aid programs, providing more dollars to allow more students to attend more schools,” he said.

The secretary noted that the proposed budget for the U.S. Department of Education builds on the historic increases in the recently enacted American Recovery and Reinvestment Act (ARRA) by taking additional steps to advance education reform and restore the nation’s economy.  The ARRA would provide an additional $17 billion for Pell Grants in Fiscal Years 2009 and 2010; the current year funding is $16.2 billion, with 6.1 million students participating.  The stimulus package is also providing nearly $14 billion in tuition tax credits for middle class families, raising the credit to $2,500 from $1,800.

Details of the FY 2010 budget proposal will be released in late April.  The budget overview issued today contains provisions that would:

.       Guarantee funding for the Federal Pell Grant program and ensure that
grant amounts would keep pace with inflation.  By making funding mandatory, the Pell Grant program would no longer be subject to the discretionary budget process, would eliminate uncertainty in funding from year to year, and would ensure that the grants reflect cost of living increases.
Beginning with academic year 2010-2011, the Pell grant maximum would be indexed to the consumer price index plus one percent, thus ensuring that Pell grant awards would meet their original objective to cover a substantial percentage of college costs.  The maximum for the 2010-11 academic year would be $5,550.

.       Make college loans reliable, stable and efficient, thus eliminating
uncertainty families have experienced due to the turmoil of the financial markets.  All new student and parent loans would be provided directly from the federal government through the same electronic system that colleges use for Pell Grants.  Taxpayers would save more than $4 billion a year in reduced entitlement subsidies, and those funds could  be reinvested in more aid to students seeking a higher education.  Private sector companies would continue to perform loan collection and related services through performance-based contracts with the Department of Education.

.       Restructure and expand the Federal Perkins Loan Program to ensure
that all colleges and universities can take part in the program.  The revamped Perkins program would provide $6 billion in loans every year, a significant increase from the current $1 billion in funding.  Funds would be distributed to reward schools that provide more need-based aid to students and that maintain reasonable student costs relative to other schools in their sector.  As now structured, the formula for distributing Perkins loans is weighted by a decades-old formula that favors particular schools, as well as schools that increase college tuition, rather than to those that keep
costs down.   Colleges and universities participating would increase from
1,800 to 4,400.

Secretary Duncan also noted that the budget overview includes a $500 million grant program for a new federal-state-local partnership to improve retention and graduation rates, particularly for low-income college students.  Funds would support research into what works to help increase college completion.

“Currently, our young people face too many financial and other hurdles to obtaining a college education,” Duncan said.  “With the American Recovery and Reinvestment Act and the proposals announced today, we are taking several major steps to clear those hurdles.”

“By ensuring that higher education is affordable and accessible for all our young people, we will make certain that our nation is prepared to compete in an information-age economy,” he said.

Information on the U.S. Department of Education budget overview is available at:


Note to editors: Below is a fact sheet on the Education Department budget overview.


President Obama’s fiscal year 2010 request for the Department of Education will build on the historic investment in education provided by the American Recovery and Reinvestment Act of 2009 to leverage significant improvements in early childhood education, more effective reform of elementary and secondary education, and expanded opportunities for students to enter and complete a college education.  The request is focused on the following areas:


The 2010 request will provide additional resources, on top of those provided in the Recovery Act, to help States build high-quality “Zero to Five” early childhood programs.  These resources will leverage state and local investment in early childhood education, support coordination at all levels of government to ensure seamless delivery of services, and help give parents the information they need to choose a high-quality program that meets the needs of their children.


The department’s 2010 budget also will help states develop and implement rigorous, college-ready academic achievement standards along with improved assessments, including assessments for students with disabilities and English language learners, to accurately measure students’ knowledge and skills.


The 2010 request will support a wide range of efforts to strengthen the education workforce, including greater accountability for teacher and principal preparation programs; improved systems and strategies for recruiting, evaluating and supporting teachers; and incentives for rewarding effective teachers and encouraging them to teach where they are most needed.


The department will continue to use the Innovation Fund to identify and replicate successful models and strategies that raise student achievement, including comprehensive approaches such as Promise Neighborhoods that aim to improve college-going rates by combining a rigorous K-12 education with a full network of neighborhood-based social services.  In addition, the 2010 budget will help turn around high-need, low-performing schools by giving states additional resources to diagnose and address the root causes of low performance.  Finally, the request will increase funding for education research on both promising practices and the effectiveness of Federal education programs.


For decades, the Pell Grant program, the foundation of federal postsecondary financial assistance for students from low-income families, has failed to keep pace with the rising costs of a college education.
Moreover, the program has been plagued by funding shortfalls that complicate the federal appropriations process and threaten the funding of other federal education programs.  To address these problems once and for all, the 2010 request not only would increase the maximum Pell Grant award to $5,550, but also would index the Pell Grant maximum award to the Consumer Price Index plus 1 percent and eliminate discretionary shortfalls by moving Pell Grants to the mandatory side of the budget.


The department’s guaranteed student loan program (Federal Family Education Loans) includes subsidies for private lenders that have needlessly cost taxpayers billions of dollars over the past 30 years, while also subjecting students and families to uncertainty because of turmoil in the financial markets.  The 2010 request would stabilize the postsecondary student loan programs and save taxpayers $4 billion annually by originating all new loans in the direct lending program (Direct Loans).


The administration also will simplify the student aid application process, but it is not enough to simply enroll more students in college; we must do a better job of giving all students, especially students from low-income families, the support they need to complete school.  This is why the 2010 request includes a new, five-year $2.5 billion Access and Completion Incentive Fund that will support innovative state efforts to improve college completion rates for low-income students.

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