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President to President
Molly Corbett Broad's weekly email newsletter to higher education leaders.

President Obama Releases FY 2015 Budget Proposal

March 3-7, 2014 ~ Vol. 15, No. 8

  • President Obama Releases FY 2015 Budget Proposal
  • ACE Submits Comments to White House Task Force on Sexual Assault
  • IN BRIEF: Presidents to Speak at Partnership for a Healthier America Forum

ACE’s Annual Meeting​ begins this weekend in San Diego. We have many excellent speakers and programs on the schedule and a record-breaking number of attendees registered for an out-of-DC meeting, so the conversation promises to be fruitful and engaging. Safe travels to those of you who will be joining us, and I look forward to seeing you very soon. 

President Obama released his budget request for FY 2015​ on Tuesday, calling for new money to help support the development of the administration’s proposed college rating system and to provide bonuses to colleges that bolster graduation rates for Pell Grant recipients. Among the higher education tax proposals included in the plan, the president wants to make the American Opportunity Tax Credit permanent and exclude all student loan forgiveness from taxation. 

The release of the president’s budget is the first step in the annual budget and appropriations process​, which may or may not be back on track after years of crisis and gridlock. It is important to remember that the president’s proposal is simply a request. It has no binding authority on Congress and is best understood as a detailed statement by the administration of its fiscal goals and policy preferences. 

Among the major higher education provisions in the budget request:

Funds for existing programs:

  • The Pell Grant Program: Level-funded at $33.9 billion, which would allow the maximum award to increase $100 to $5,830 in 2015-16 (the increase is due to legislation that provides for an automatic, mandatory rise for Pell Grants each year by a percentage equal to the Consumer Price Index). The plan also calls for strengthening the “satisfactory academic progress requirements in the Pell Grant Program to encourage students to complete their studies on time.” Such an action would require a new regulatory process before it could be implemented.
  • TRIO ($838 million), GEAR UP ($302 million) and Federal Work-Study ($975 million): would all receive level funding. The Supplemental Education Opportunity Grant Program is funded at $733 million, a cut of $1 million from FY 2014.
  • National Institutes of Health: $30.2 billion, an increase of roughly $200 million from FY 2014. 
  • National Science Foundation: $7.255 billion, an increase of $75 million from FY 2014.

New funding (all would require that Congress pass a new authorization and also provide the money):

  • The Obama administration’s college ratings plan: $30 million total “for pilot and demonstration programs” with $10 million of that going to “support for the development and refinement of a new college rating system.”
  • State higher education performance fund: $4 billon over four years (with $1 billion in FY 2015) for a new competitive matching grant program for states to support, reform and improve the performance of their public higher education systems (a version of the Race to the Top: College program first proposed in the president’s FY 2013 budget).
  • College opportunity and graduation bonus: $7 billion over 10 years (with $647 million in FY 2015) to support a program to reward colleges that successfully enroll and graduate a significant number of low- and moderate-income students on time and encourage all institutions to improve their performance.

Tax provisions (all would require legislative action, which observers believe is unlikely):

  • Permanently extend the American Opportunity Tax Credit (AOTC).
  • Eliminate taxability of loan amounts forgiven under Income-Based and Income-Contingent repayment programs.
  • Make all Pell Grant funding excludable from individual taxable income (currently, any Pell Grant funds for living expenses are taxable).
  • Cap the tax value of the charitable deduction, a proposal floated before and a matter of great concern for all nonprofit organizations, and some other itemized deductions for upper-income taxpayers.

Along with six of our colleague associations, we submitted comments​ to the White House Task Force to Protect Students from Sexual Assault last Friday, outlining a series of recommendations to consider as the task force drafts a proposal in response to the president’s call to action​.

In the letter, we affirmed our support for the task force’s work and our commitment to ensure a safe, secure environment for students. We also urged the task force to use colleges and universities as a resource, so campuses can share their expertise and provide input about the types of initiatives that would best support existing efforts to prevent and respond to sexual assault.

Regarding the myriad federal compliance requirements that already exist, we told the task force that colleges and universities, students and the public would all benefit from a single, clear set of procedures or guidelines with which to comply. A unified federal enforcement approach is key, as campuses already must comply with a range of federal laws, including Title IX​, the Clery Act​ and its implementing regulations, the Department of Education’s 2011 Dear Colleague Letter​ and the new requirements​ of the Violence Against Women Reauthorization Act, which all address campus sexual assault.

IN BRIEF

Several of our colleagues are participating in a summit in Washington next week that will include a discussion of current campus wellness successes and efforts to make further progress in areas such as improving student nutrition habits and encouraging more physical activity. The March 12-14 Building a Healthier Future Summit ​will feature President Donna Shalala of University of Miami (FL), President Beverly Tatum of Spelman College (GA), Dean Lynn Goldman of George Washington University (DC) and Associate Vice-Provost Michael Goldstein of the University of California, Los Angeles. The Summit is being run by the Partnership for a Healthier America, which works to help end the childhood obesity epidemic. More information about the campus initiative can be obtained by emailing Sara John: sjohn@ahealthieramerica.org​.

Molly Corbett Broad
President of ACE