Familiar Sounding Budget Cuts

Republican plan to offset Katrina spending suggests ending federal backing of grad student loans, NEH and AmeriCorps.
September 23, 2005

It reads like a hit list from Republican-led Congresses of the past: Kill the National Endowments of the Arts and Humanities. Cut benefits for graduate students. Do away with AmeriCorps.

Supporters of those and other programs probably had a sense of déjà vu as they read a document, released Wednesday by Republican lawmakers in the House of Representatives, that lays out potential cuts Congress might make in the federal budget to free up funds to pay for the huge job of rebuilding in the wake of Hurricane Katrina, which is estimated in the hundreds of billions of dollars.

“Operation Offset,” the plan circulated by the Republican Study Committee, identifies $929 billion in possible cuts over 10 years, including the following related to higher education:

  • $840 million a year, or $8.6 billion over 10 years, in subsidized Stafford Loans for graduate students. The document says that most financially needy graduate students are likely to have had government help as undergraduates, and that they “make an informed decision to invest in their own futures and should bare [sic] the costs of schooling.”
  • $722 million over 10 years for the Leveraging Educational Assistance Program, which provides federal matching funds to state need-based aid programs. LEAP is no longer necessary, the Republican panel argues, because “almost all states operate programs far larger than the federal contributions.”
  • About $3.8 billion over 10 years by ending federal support for the National Endowment for the Arts and Humanities. The panel argues that “the general public benefits very little” from the two agencies, and that they could be “easily be funded by private donations.”
  • $6.5 billion over 10 years from withdrawing federal aid to the AmeriCorps and other national service programs.
  • $2 billion over 10 years for the National Science Foundation’s Math and Science Program, which the committee argues duplicates Education Department efforts to prepare teachers and develop instructional materials.
  • $1 billion over 10 years for the Environmental Protection Agency’s Science to Achieve Results Program, which provides graduate fellowships and grants for environmental researchers. The program is “duplicative” of other federal research efforts, the panel says.

College lobbyists were uncertain just how concerned to be about this list, for a variety of reasons: it contained so many potential targets, Congress has sent mixed signals about whether it is going to try to find cuts to offset the Katrina costs, and many of these programs have significant bipartisan support that would make their elimination unlikely.

But supporters of the programs aren’t taking chances, preparing to make their cases. “At the same time when everyone’s talking about having policies to enhance our competitive stance in the world and our ability to innovate, eliminating subsidized loans for graduate students is not a good idea,” says Patty McAllister, director of government relations and public affairs at the Council of Graduate Schools. “We’re all very concerned about developing the domestic talent pool in fields like science and math, particularly for underrepresented groups, and these are the people who would be taking advantage of subsidized loans.”

The line in the committee’s report about how graduate students make an active choice to get more education to further their own career prospects, and should therefore pay for it, is a theme that policy makers have struck in past efforts to reduce aid for graduate education, such as the 1997 effort to tax the tuition waivers that some graduate students receive from their institutions.

“That line focuses on the idea that people who pursue graduate education derive a private benefit,” says McAllister. “I think that we should start thinking about the fact that there is a public benefit to having a more highly educated work force in the global economy. The people who got a graduate education through the National Defense Education Act produced many of the innovations that have led to our economic success, and that has clearly been a public benefit to our country.” 


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