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President to President

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

President to President, February 14-18, 2011

Vol. 12, No. 8

  • House Continues Debate on FY 2011 Budget Bill
  • President's FY 2012 Budget Would Preserve Pell Grant Program
  • Higher Education Groups Speak Out on Federal Definition of Credit Hour
  • ACE to Host Webinar Next Week on Changes to Post-9/11 GI Bill
  • IN BRIEF: ACHA Releases FAQs on Student Health Plan Regulations; Two Weeks Remain Until ACE's Annual Meeting

This has been another eventful week on the federal budget front, one that reflected the unusual situation in Washington this year and the growing tension over how to reconcile long-term spending plans with the mounting budget deficit.

The government has been operating since the beginning of the fiscal year on Oct. 1, 2010, under a series of continuing resolutions (CR) that provide the same funding levels as FY 2010. The current CR is set to expire on March 4 and without a new bill or another extension, the government will shut down. Congress needs to finalize FY 2011 spending before moving on to FY 2012.

The House of Representatives has spent the week debating a measure (H.R. 1) that would finalize FY 2011 funding. This has been the most comprehensive discussion of a spending measure that we have seen on the House floor in 20 years, primarily because the Republicans offered an open rule, resulting in the filing of more than 500 amendments. Several hundred of these have been actively considered, causing floor sessions to run as late as 4:00 a.m. Of particular interest to us is an amendment offered by Rep. John Kline (R-MN), chairman of the Education and the Workforce Committee, which would bar the Department of Education from implementing gainful employment regulations should it survive House and Senate consideration. A final vote on H.R. 1 is expected late today or tomorrow.

H.R. 1 as introduced would reduce spending by slightly more than $60 billion from FY 2010 levels. The amendment process seems to be working primarily to produce further cutbacks, and although precise totals for each agency are still unknown, it is difficult to overstate the negative impact that H.R. 1 would have on higher education if enacted.

As it stands now, the bill would cut $5.7 billion from Pell Grants, reducing the maximum award by $845 in 2011-12 and resulting in as many as 1.7 million students losing eligibility. H.R. 1 also would eliminate the Supplemental Educational Opportunity Grant (SEOG) and Leveraging Educational Assistance Partnership (LEAP) programs, reduce funding for TRIO and GEAR UP programs, and cut $100 million for Hispanic-Serving Institutions and $85 million for Strengthening Historically Black Colleges and Universities.

The bill is equally drastic in reducing funding for scientific research. H.R. 1 would cut the National Institutes of Health by $1.63 billion (5.4 percent below FY 2010), the Department of Energy's Office of Science by $886 million (18 percent), NASA by $578.7 million (3.1 percent) and the National Science Foundation by $359.5 million (5.2 percent).

It is widely believed that these levels will not be acceptable to the Senate. In addition, the White House on Monday issued a Statement of Administration Policy threatening to veto the bill if it felt key programs would be excessively impacted. Both the House and Senate will be in recess next week, so the Senate will not take up the measure until the week of Feb. 28. This will leave little time to produce a compromise spending bill before March 4. Adding additional pressure to this timetable is House Speaker John Boehner's (R-OH) statement yesterday that Republicans will not consider any short-term extensions of government funding.

I will continue to keep you posted as the situation unfolds.

In rather stark contrast to the House bill, the president released his budget request for FY 2012 on Monday. The proposal contains an overall boost for education and research funding, with the Department of Education the only cabinet agency to receive an increase.

The centerpiece of the administration's plan for higher education is the Pell Grant Protection Act, which would identify $100 billion in savings to be used to maintain the maximum Pell Grant award at $5,550 for the 2012-13 academic year. The plan includes eliminating the in-school interest exemption for graduate and professional students, suspending year-round Pell Grants, streamlining the Free Application for Federal Student Aid (FAFSA), increasing the interest rate on Perkins Loans to 6.8 percent and implementing a new Stafford Loan consolidation program. These proposals would require new legislation—always a complex proposition.

While we have some concerns about how these savings will be found, particularly the proposal to eliminate the in-school interest exemption for graduate students, we strongly support the administration's efforts to maintain Pell Grants at their current level. The cost of the Pell Grant Program has increased in recent years from $14 billion to $37 billion and this path is not sustainable, especially in light of concerns about the federal budget deficit. The future of the Pell Grant Program and steps to reduce its cost are not topics that we can or should avoid.

The president's budget also maintains the majority of other student aid programs, with an increase for TRIO ($10 million) and level funding for SEOG, Federal Work-Study and GEAR UP. The budget also maintains across-the-board level funding for Title III aid to Minority-Serving Institutions. Unfortunately, the administration again called for the elimination of the LEAP Program as it did in both 2009 and 2010. In terms of new programs, the budget would establish funding streams for four new initiatives dealing with teacher training and college completion.

On the research front, the administration proposes an increase of more than $4 billion from FY 2010 in nondefense research and development funding. This includes increases of $2.153 billion for Department of Energy research programs, slightly more than $1 billion for the National Institutes of Health, $875 million for the National Science Foundation and $559 million for NASA.

We sent a letter this week to Secretary Arne Duncan on behalf of more than 70 higher education and accreditation organizations, outlining the higher education community's objection to the creation of a federal definition of "credit hour" included in the Department of Education's new program integrity regulations.

The new regulations, which address a broad range of issues, will take effect on July 1, 2011. While we strongly support many provisions of the larger package, we have serious concerns in several areas, most notably the credit hour definition. As we told Secretary Duncan, with little evidence of a sustained problem in this area, this provision essentially federalizes a basic academic concept and replaces it with a complex and unworkable definition: a one-size-fits-all rule for more than 6,000 campuses. Our letter asks the department to rescind the rule.

I hope you or a member of your leadership team are planning to join us next week for our webinar on the new law that makes major changes to the Post-9/11 GI Bill and how these changes will affect campuses.

President Obama on Jan. 4 signed into law the Veterans Educational Assistance Improvements Act of 2010, which makes changes to the Post-9/11 GI Bill. While we are pleased the new law contains improvements that we and the veterans' service organizations sought, it also creates some new challenges for campuses.

We will be talking about both the good and the bad during the Feb. 23 webinar, which will feature Keith Wilson, director of education service for the Department of Veterans Affairs; Judith Flink, executive director of University Student Financial Services for the University of Illinois; and David Smedley, associate director of compliance and training for The George Washington University's Office of Student Financial Assistance. ACE Senior Vice President Terry Hartle will serve as moderator.

The event is scheduled for Feb. 23 from 1:00-2:30 p.m. EST. The ACE member price is $149; the non-ACE member price is $199. See the ACE website for full details and to register.

IN BRIEF

As I mentioned last week, the Department of Health and Human Services on Wednesday released proposed regulations that would ensure college and university health plans offer students the consumer protections created by the Affordable Care Act, the health care reform legislation signed into law last year. The American College Health Association has released an FAQ document your staff might find helpful as they review policies and procedures in this area. We also have compiled a one-page summary of the regulations and will file comments by the April 12 deadline. ACE Director of Federal Relations Steven Bloom is tracking this issue closely; please feel free to contact him at Steven_Bloom@ace.nche.edu with any questions or concerns you may have.

In the context of all that's been happening in Washington lately, I'm sure you'll agree that the time is right for ACE's Annual Meeting, March 5-8, 2011. Of particular interest may be a presidents-only federal relations update with ACE Senior Vice President Terry Hartle and I will provide. Online registration is now closed, but on-site registration is available through the end of the conference.

President to President will resume when Congress reconvenes after the Presidents Day holiday.

Molly Corbett Broad
President of ACE