Higher Education Proposals in the 2015 Budget Request

The Administration’s fiscal 2015 budget request released last week contains a number of proposals affecting higher education, but as with all such requests – Congress will have the last word and it likely will not be all “yes.” Several proposals would require passage of authorization language and significant “pay fors” in a year that will be compressed by the fall Congressional elections.

The budget calls for the needed amount of discretionary funding to match the mandatory stream allowing Pell Grants for almost 9 million students to increase to an expected maximum of $5,830 for the 2015-2016 school year – a $100 increase. The Pell program is funded each year by a combination of discretionary appropriations and automatic or mandatory spending set up through several laws on the books. The plan proposes changes to Pell eligibility “to strengthen academic progress requirements” in an effort to encourage students to complete their studies on time.

The Fund for the Improvement of Postsecondary Education (FIPSE) program would receive $175 million, within which would be $100 million to continue the First in the World program started in FY 2014 to support innovative practices for improving educational outcomes and making college more affordable.

The Administration budget continues support for the President’s plan announced last August to develop a college rating system by including funding for data initiatives related to it.

Minority-serving institutions would benefit from a request to provide $75 million for competitive grants to support institutions that are designated under Title III or Title V of the Higher Education Act as a Historically Black College or University or Minority-Serving Institution. Four-year grants would be awarded to support sustainable strategies, processes and tools, including those based on technology upgrades, to reduce costs and improve outcomes for students.

The President’s budget request also includes two major new proposals that are costly and would require Congressional commitment to multi-billion offsets or “pay fors”:

  • The College Opportunity and Graduation Bonus program would reward colleges that successfully enroll and graduate a significant number of low and moderate income students on time via an annual “bonus” grant. The grant would be equal to their number of on-time Pell graduates multiplied by a tiered bonus amount per student, varying by institution type. Eligibility would be based on Pell students comprising a significant share of an institution’s graduating class, graduation rates, and student loan default rates. The total cost for this new program would be $7 billion over 10 years.
  • A State Higher Education Performance Fund, which would be outside of direct Congressional control, is also included in the President’s request. If enacted, it would help public colleges and universities improve performance and outcomes. States would be required to match these resources dollar-for-dollar over four years. Federal and State matching resources would be allocated among institutions based upon a performance formula developed by each State tied to a timeline, with specific goals for graduating low-income students and making college more affordable. The price tag for this fund is $4 billion.

With the Appropriations Committees expected to move along briskly this year in writing their fiscal 2015 bills, the chances for major new programs are likely to be low this year. However, the policy proposals included in the President’s budget request give us some insight into his policy priorities and goals for the last couple of years of his administration.

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