NAICU Washington Update

Senate Approves Education Funding – with a Hint of Higher Ed Reform

July 18, 2013

The Senate Appropriations Committee offered strong support for student aid programs through increased funding in its FY 2014 Labor-HHS-Education Appropriations bill approved July 11. It also advanced two major policy proposals aimed at college persistence and completion reform, and gave a hint of what may be addressed in the upcoming Higher Education Act reauthorization bill.

Generous Support for Student Aid

The bill offers good news for low-income students by providing increased funding for student aid programs. It sets the Pell Grant maximum at $5,785; maintains funding for SEOG and graduate education grants; and increases Federal Work Study by $50 million, TRIO by $10 million, and GEAR UP by $5 million.
Other funding increases include $43 million to restore support for Teacher Quality Partnership Grants and a $10 million increase for international education programs. The bill also provides $1 million for a deregulation study focused on institutional burden – a study authorized in 2008 but never funded.

NAICU supports these proposed funding increases.

Reform Initiatives and Their Significance

As was the case last year, the legislation funds several new initiatives. The most significant are two major policy proposals, both under existing statutory authority, targeted at college persistence and completion. The first is a high school-college, dual-enrollment demonstration program for high school students seeking college credit. The bill provides $20 million for the award of grants, loans, and work study to “low-income students who would qualify for Pell grants, but are not eligible because they do not have a high school diploma.” The grants would cover tuition, fees, and supplies for participation in a dual-enrollment program. The program’s goals are to shorten time-to-degree, increase college enrollment, and reduce students’ college costs.

The second proposal is a $250 million Race to the Top: College Affordability and Completion plan, the fourth installment of the Obama administration’s Race to the Top initiative from the 2009 stimulus bill. The $250 million in competitive grant funding is intended to support the reform of public higher education, specifically, to improve college affordability, quality, and institutional capacity to graduate more students. Before receiving funds, states would have to prove they are implementing reforms for fiscal support of public higher education, removing barriers to degrees, empowering consumer choice, increasing awareness about college and financial aid in high schools, and providing seamless transitions from high school to college. The administration has been seeking these types of higher education reforms since its first budget request in FY 2010.

These two reform plans will likely form the basis of more extensive initiatives to be considered under the upcoming Higher Education Act reauthorization bill. For example, additional federal financial support for high school students enrolled in dual-enrollment programs might be considered. We also could see renewed efforts to promote the type of state-based higher education reform initiatives that have been of concern to NAICU institutions in the past. This means NAICU must continue to seek opportunities for independent institutions to participate in reform initiatives, while avoiding situations in which state authorities exercise undue control over these colleges.

The bill provides several other glimpses of the policy directions the Senate may take in the upcoming reauthorization. For example, the committee gives high praise to the Department of Education’s work with the Department of Veterans Affairs in developing a student complaint system, and it calls for the Department to “broaden the scope of the complaint system and make it more accessible to all students attending institutions of higher education, regardless of their receipt of federal education benefits.”

The bill also signals continued interest in addressing concerns raised largely with respect to for-profit institutions, such as a prohibition on using federal education funds for advertising, marketing, and recruitment. In addition, it prohibits the use of federal education funds for gainful employment programs unless the programs meet all state-required licensing, certification, and specialized accreditation. Although private nonprofit institutions are not likely to be in violation of these policies, depending on how their implementation is fleshed out, they could face significant added burdens in demonstrating compliance.


It’s no secret that the FY 2014 appropriations process is headed for gridlock in September, and it’s all but certain that Congress will pass a continuing resolution to avoid a government shutdown at that time. However, any further movement on funding is unlikely, absent a big budget deal to change the budget enforcement law.

The House and Senate Appropriations Committees are working from funding totals that are $92 billion apart, and a final bill can’t be developed without an agreement on the top-line amount. The House has set a $966 billion total, which matches the FY 2014 spending cap in the Budget Control Act of 2011. The Senate is using $1.058 trillion, which reflects restoration of the FY 2013 sequestration cuts. Neither House Appropriations Chair Hal Rogers (R-Ky.) nor Senate Chair Barbara Mikulski (D-Md.) like the sequestration cuts, and they would like to find a way to bridge the gap between the two extremes. However, they will need support from House and Senate leadership to proceed.

NAICU will monitor budget process action throughout the summer and fall, and will continue to analyze its impact on student aid funding.

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