Ed Money Watch

Congressional budget resolutions are notoriously light on details. That is by design. Congress uses the budget resolution as a framework for overall funding and revenue guidelines for 10 years out. And Congress may or may not follow that framework as it writes actual spending and revenue bills later in the year. The budget committees need not specify any tax policies, program cuts, or the like in their resolutions; instead, they just set broad targets.

Of course the budget committees do have to develop a sense of which types of policies they could enact to keep spending, revenue, debts, and deficits within the proposed guidelines. Those “assumptions” are about the only aspect of the resolution that could have meaning for education policy stakeholders if Congress takes them up through the legislative process later in the year.

Last week, the House Budget Committee approved a fiscal year 2013 budget resolution that was full of assumptions about education programs. And despite the flurry of media coverage last week, the committee waited until this week to make any of those assumptions public. Even so, the documents currently available only illuminate a few key assumptions and do not provide an estimate of how the proposals would reach the spending levels outlined in the new fiscal year 2013 budget resolution.

In short, there’s not much to say yet, except to call attention to these few education policy proposals, the bulk of which focus on higher education spending. The policies appear in the report that accompanies the legislative language of the budget resolution.

Higher Education

• Implement a series of reforms to Pell Grants, including:
  • Limit the maximum Pell Grant award to $5,550 and fund it entirely through the appropriations process. This would end the entitlement portion of the program’s budget;
  • Set an unspecified income limit for eligibility;
  • Eliminate Pell eligibility for less-than-half-time students, as was proposed in the House draft fiscal year 2012 appropriations bill;
  • End the $5 per-grant fees paid to schools to cover administrative costs (a 2009 estimate from the Congressional Budget Office [CBO] found that this would save nearly $1.8 billion over ten years when instituted for Pell Grants and campus-based aid programs); and
  • Revert automatic zero expected family contribution and income protection allowance limits to pre-College Cost Reduction and Access Act of 2007 (CCRAA) level of $20,000. (The automatic zero level was already reduced from CCRAA levels – $32,000 as of 2011-12 award year – to $23,000 in the fiscal year 2012 appropriations process.)
     
• Eliminate Subsidized Stafford loans for undergraduate students, as laid out by the Fiscal Commission. Congress enacted the same change for graduate students in last year’s debt ceiling agreement. An estimate provided by the CBO in 2010 shows that the undergraduate loan proposal would reduce federal spending by over $40 billion over ten years.
   
• Encourage innovation in higher education by limiting federal regulations and supporting unconventional models of postsecondary education like online learning.  Provide students with additional data to allow them to make informed postsecondary education decisions.
   
• Eliminate 5 percent set-aside for administrative costs for campus-based student aid programs, including the Supplemental Educational Opportunity Grants, Federal Work-Study, and Federal Perkins Loan programs.
   
• Recalculate savings set aside in Student Aid and Fiscal Responsibility Act (SAFRA), passed in the healthcare reform bill, using fair-value accounting standards and cancel the expenditure of those funds according to one or more of several recommendations:
  • Cancel income-based repayment programs for student loans established by the 2007 CCRAA;
  • Repeal the College Access Challenge Grants, which included $750 million in mandatory spending under SAFRA to sunset in 2014; and/or
  • Move all payments for Direct Loan Program servicers to annual appropriations funding.

• Cap the annual allowable increase for tuition expenses under Post-9/11 GI Bill for veterans’ education benefits at 3 percent.

K-12 Program Consolidations

• Eliminate or scale back programs that are not proven to be effective in increasing student achievement.  Examine and reform 82 duplicative teacher quality improvement programs (outlined in a GAO report last year) to streamline federal efforts.

• Zero out the Safe and Drug-Free Schools program because it has been found ineffective.

There is one additional matter that will be of interest to education policy stakeholders. The House-proposed budget resolution includes “reconciliation instructions” for several committees, but not the Education and Workforce Committee. Reconciliation instructions require committees to draft legislation that reduces federal spending on entitlement programs, so that the bills then qualify for expedited consideration in the House and Senate – mainly meaning that they cannot be filibustered in the Senate. It is curious that the House Budget Committee opted not to provide reconciliation instructions for the Education and Workforce Committee given that the proposals listed above would certainly reduce spending on entitlement programs (including Pell Grants and student loans).

If you felt like you couldn’t find any information on the House proposed fiscal year 2013 budget resolution last week despite all the press coverage, it’s not because you didn’t know where to look.  The Committee barely released anything meaningful for education policy stakeholders last week. But with the release of a committee report yesterday, at least some of Chairman Paul Ryan’s (R-WI) “assumptions” are now available – and that’s about as much as will ever be made public for a budget resolution.