FEDERAL BUDGET STATUS AS OF MARCH 15, 2005
STUDENT FINANCIAL ASSISTANCE
The President’s proposed budget for 2006 totals $406.6 million in combined state formula-allocated education aid to Montana (this number includes all grade levels). This number is up slightly from 2005, but the increase comes mainly from a projected increase in federal student loans of $14.3 million. Excluding student loans, federal support is projected to actually decline in Montana by $1.36 million. Some highs and lows for the state include:
- An increase of $2.6 million in Pell grants (totaling $52.1 million)
- No changes forecast for our Federal Supplemental Educational Opportunity Grants ($2.3 million) or Federal Work Study ($3.5 million)
- The elimination of new funds for Perkins loans (last contribution was $461,000)
- The elimination of $180,000 in Leveraging Educational Assistance Partnership (LEAP). This money is normally combined with our MHEG and MTAP programs to increase total need-based aid.
- The elimination of money for GEAR UP. If this occurs, no new grants would be awarded and our grant is currently up for renewal.
- The elimination of money for Byrd Honors Scholarships. Last year, we received in excess of $120,000.
Reauthorization of the Higher Education Act also looms as a possibility for this year. HR 507 is very similar to the bill introduced, but not acted upon last year. A few highlights include:
- Allows for year-round funding for Pell grants and additional aid to those students who complete a rigorous high school curriculum.
- Reduces student loan origination fees.
- Increases information to students and families and makes education more accessible to non-traditional students.
- Makes consolidation loans variable.
- Increases some loan limits.
- Makes permanent some teacher loan forgiveness programs introduced last year.
- Changes (reduces) funding for some guarantors and lenders.
CARL D. PERKINS FEDERAL GRANT
The President’s FY 06 budget calls for the elimination of the Perkins Vocational and Technical Education Act of 1998. This occurs at the same time Perkins reauthorization legislation is being considered in both the House and the Senate. On March 9, 2005, the House Committee on Education and Workforce passed H.R. 366 to reauthorize Perkins legislation. On the same day, the Secretary of Education, Margaret Spellings, sent a strong letter to Representative John A. Boehner, Chairman of this same committee, in opposition to H.R. 366. On March 10, 2005, the Senate passed S. 250 on a 99 to 0 vote to reauthorize Perkins. These events demonstrate that the will of Congress to eliminate Perkins is questionable.
Some of the key bills related to the reauthorization include: H.R. 366 and S. 250 which maintain current funding; H.R. 366 which reduces administration funds from 5% to 2%; and S. 250 which maintains 15% administration funds to be divided between administration and state leadership.
WORKFORCE INVESTMENT ACT (WIA)
Both the House and the Senate have bills to reauthorize the Workforce Investment Act: H.R. 27 “Job Training Improvement Act” and S. 9 “Lifetime of Education Opportunities Act of 2005.” Issues related to this legislation include:
· Require a percentage of Perkins funding to be re-directed to support one-stop administration and management. If Perkins administration funds were cut from 5% to 2%, this additional levy would further diminish the state’s ability to provide effective management of the grant
· WIA Plus – US Department of Labor amendment to HR 27 to add Perkins to a list of programs governors could choose to block grant. If Perkins remains, it is likely the administration will recommend it to be added to the list of programs that can be block granted under WIA
· Community-Based Job Training Act would provide $250 million to two-year colleges on a competitive basis through US Department of Labor
HIGHER EDUCATION ACT (HEA)
Community College Access Grant program would provide $125 million for concurrent enrollment and articulation between two and four- year institutions
Note: Both the Community-Based Job Training Act and the Community College Access Grant would replace Perkins at postsecondary level if Perkins were eliminated as requested in the President’s FY06 budget proposal.
UPWARD BOUND & TALENT SEARCH PROGRAMS
The Bush Administration budget targets 932 Upward Bound and 469 Talent Search programs for defunding at the end of the ‘05-‘06 year. Last year, Upward Bound and Talent Search placed 74,100 high school seniors into higher education nationally. Each program serves students considered educationally disadvantaged by virtue of their parents’ low income status, their potential for being a first generation college student, and/or veteran.
Within Montana, defunding the programs would terminate 6 Classic Upward Bound projects, 1 Upward Bound Math and Science project, 1 Veteran’s Upward Bound project, and 3 Talent Search projects. The total impact of defunding the Montana programs would lead to an estimated 700 seniors being denied pre-college services annually (out of the total 3,366 served by TS and UB). The programs have been successful in the state:
· An average 84 percent of all 2004Upward Bound high school seniors statewide enrolled in postsecondary education this past fall semester.
· An average 54 percent of all 2004 TS high school seniors statewide enrolled in postsecondary education this past fall semester or completed a GED.