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 AACC Analysis of Highlights of President Obama’s FY 15 Budget 

3/5/2014

Echoing themes from his State of the Union address, President Obama’s FY 2015 budget calls for investments in education, job training, and research to strengthen the middle class and provide “Opportunity for All.” The budget adheres to the spending levels agreed to in the Bipartisan Budget Act of 2013, negotiated between the House and Senate.

The Obama budget also outlines additional ideas for expanding the economy outside of the normal budget, including a $56 billion Opportunity, Growth, and Security Initiative (OGSI), the cost of which would be offset by the adoption of a package of spending cuts and tax loophole closers. The offsets are not viewed as being politically feasible.

Department of Labor

At the U.S. Department of Labor, the administration is requesting $1.5 billion in FY 2015 under the OGSI to support a 4-year, $6 billion Community College Job-Driven Training Fund. Similar to the Trade Adjustment Assistance Community College and Career Training Grant (TAACCCTG) program and to the previously proposed Community College to Career Fund, this program would provide competitive grants to partnerships of community colleges, public and non-profit training entities, industry groups, and employers to launch new training programs and apprenticeships to prepare participants for in-demand jobs and careers. From each year’s funding, $500 million would be set aside for grants to create new apprenticeships and increase participation in existing apprenticeship programs. This 4-year investment is projected to double the number of apprenticeships in America over the next 5 years.

The administration has requested level funding from FY 2014 for the Workforce Investment Act (WIA) formula programs. The budget also calls for $80 million for WIA incentive grants, which have not been funded in recent years, and $15 million for a new sector strategies initiative. These latter proposals are welcome.

Department of Education

The president is calling for an increase of $1.3 billion, or 1.9%, over the 2014 level in discretionary funding for the U.S. Department of Education (ED).

The budget calls for fully funding the Pell Grant program to allow for an increase to the maximum award from $5,730 in AY 2014–15 to $5,830 in AY 2015–16. (The $100 increase would come from an adjustment tied to the Consumer Price Index.) The budget also includes restoration of Pell Grant eligibility for ability-to-benefit students in career pathway programs, a proposal championed by Senator Patty Murray (D-WA) and strongly endorsed by AACC. The budget also proposes strengthening the Satisfactory Academic Progress (SAP) requirements for the Pell Grant program. These changes can be effected through regulation and are of potentially great concern to AACC. According to ED officials, the SAP requirements would be made more stringent as a student progresses through higher education.

Discretionary funding would be preserved for the Supplemental Educational Opportunity Grants program at $733 million and for Federal Work-Study at $974.7 million, with a proposed revision to the allocation formula for these programs to reward institutions that graduate higher numbers of Pell-eligible students. Similarly, funding for the TRIO programs and GEAR UP would be level funded at $838.3 million and $301.6 million, respectively.

The administration’s budget would freeze discretionary funding for the Title III and Title V institutional aid programs but anticipates a slight increase in mandatory funding for several of these programs in FY 2015. It also calls for a $4 million increase for Title VI international studies.

While funding for Perkins Career and Technical Education State Grants and Adult Education and Literacy State Grants would remain at the FY 2014 levels of $1.118 billion and $564 million, respectively, the president is proposing a new, $20 million Skills Challenge Grant initiative to support partnerships among states, adult education providers, colleges, and private organizations that can demonstrate innovative models for transforming adult education. This appears to be a very positive proposal.

The budget proposes a number of new higher education programs, highlighted by the College Opportunity and Graduation Bonus grant program, which would award $7 billion of mandatory funds over 10 years ($647 million in FY 15) to reward colleges that successfully enroll and graduate a significant number of low- and moderate-income students, focusing on Pell Grant recipients. This proposal is similar to one advanced by AACC in its HEA reauthorization recommendations and AACC welcomes it. However, more details are needed before its impact can be accurately assessed.

The State Higher Education Performance fund would provide $4 billion over 4 years to support higher education reforms, including implementation of performance-based funding, and ensure that states maintain or increase their investments in higher education. As with the Bonus program described above, further details are needed before a reliable analysis of its impacts can be made. AACC is encouraged by the recognition that states must be asked to do more to support higher education, although remains concerned about potential deeper federal involvement in policies traditionally controlled at the state and local level.

The budget also includes $75 million in the Fund for the Improvement of Postsecondary Education for College Success Grants for Minority-Serving Institutions to help improve student outcomes. If funded, the grants could have a beneficial impact on many community college campuses.

National Science Foundation

The National Science Foundation (NSF) has not yet released its detailed budget request, so funding levels for key programs such as the Advanced Technological Education (ATE) program are not yet available. However, the administration has requested an increase of $43 million, to $890 million, for the Education and Human Resources Directorate, which includes ATE and other key NSF programs. 

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