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President’s Proposed FY 2016 Budget Focuses on Higher Education

February 03, 2015

President Obama


​President Obama yesterday released his budget request for FY 2016 and, as expected, called for increasing federal spending on many higher education programs, including his proposal for two free years of community college nationwide.

Also included in the request is a range of initiatives targeted at increasing overall college access, including the plan to streamline higher education tax credits, a bonus grant program to reward colleges that graduate large numbers of low-income students, and a scheduled increase in the Pell Grant maximum award, from the current $5,775 to $5,915 for 2016-17.

Among the other provisions:

  • Income-based repayment (IBR) for student loans: IBR would be streamlined and scaled back, which the administration says would result in $14.6 billion in savings over the next 10 years that would be redirected to the Pell Grant Program.
  • Perkins Loans: The Perkins Program would be overhauled, and the estimated $7.1 billion saved also would be redirected to Pell Grants. The proposal calls for Perkins loans to be disbursed directly to students by the government and would tie colleges’ eligibility for the program to certain student outcome metrics.
  • Campus-based aid: Supplemental Educational Opportunity Grants and Federal Work Study would be level funded from FY 2015.
  • FAFSA simplification: The number of questions on the current Free Application for Federal Student Aid would be cut by 30 to a total of 78. Because this would reduce some students’ Pell eligibility, the budget calls for reducing the expected family contribution threshold for Pell by $600.
  • 90/10 Rule: The budget proposes including federal educational benefits for service members and veterans as part of the 90 percent cap on the share of for-profit colleges' revenue that comes from federal taxpayers. The cap currently includes only student loans and Pell Grants.

The president also is requesting a relatively substantial increase in research funding for the coming fiscal year.

Under the plan, the National Institutes of Health (NIH) would get $31 billion, an increase of $1 billion over its current level. As The Chronicle of Higher Education points out, NIH, the largest single provider of research funding to U.S. higher education institutions, has seen its budget shrink by nearly 25 percent since 2003, when adjusted for inflation.

The request also includes $7.7 billion for the National Science Foundation and $5.3 billion for the Department of Energy’s Office of Science, an increase of about 5 percent for both agencies.

The president's budget proposal has no binding authority on Congress, although many of the proposals would require legislative action to be enacted. But as Inside Higher Ed writes this morning, while the request is “largely aspirational” in a GOP-controlled Congress, some proposals—such as the effort to streamline student aid programs—align with Republican goals and may have some traction.

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