A Symbolic, But Pleasing, Budget

WASHINGTON -- Higher education advocates found plenty to like in President Obama’s proposed fiscal year 2013 budget, announced Monday: $8 billion for community colleges over three years for job training, expanded student financial aid programs, and more money for some federally funded research. Still, they acknowledge that it is essentially a symbolic political document, unlikely to survive a divided, deficit-conscious Congress.

But the symbolism is still powerful, down to the venue Obama picked to announce his spending plan: Northern Virginia Community College. While last year the focus was on holding the line on the maximum Pell Grant, this year’s proposal called for a host of new and expensive programs, from the community college fund to additional money for the Perkins Loan Program and a $1 billion “Race to the Top” for higher education.

College leaders may not like all of the president’s proposals -- especially the recent, controversial idea of tying campus-based federal financial aid to measurements of “value.” But as Obama again emphasized higher education in his requests to Congress, many acknowledged that he has supported public and nonprofit private colleges to a perhaps unprecedented degree. (For-profit-college leaders -- purposefully barred from eligibility for new job training funds -- aren't likely to share the love.)

“I think it speaks volumes that, as we enter a period of nine years of sequestration and diminishing budgets, the president has found creative ways to keep the focus on higher education and to maintain his commitment to higher education,” said Becky Timmons, assistant vice president for government relations at the American Council on Education, referring to the mandatory spending cuts imposed by the failure to reach a deal on deficit reduction last year. “They deserve credit for walking the walk, not just talking about higher education as a priority.”

A few details that were not clear on Sunday night, when the broad strokes of the president’s proposals began to leak out, were clarified by the release of the official document Monday. Funding for the National Science Foundation would increase by 5 percent, to $7.4 billion, if the president’s proposal is enacted. The National Endowment for the Humanities would get a slight increase, from $146 million to $154 million.

And subsidized loans for financially needy undergraduate students, which have eroded gradually in financial aid funding compromises in recent years, would take another hit: borrowers would lose eligibility for the program if they stay enrolled full-time longer than three years for an associate degree, or six years for a bachelor’s.

Some proposed changes to the tax code would also affect higher education, whether for better -- making permanent the American Opportunity Tax Credit, which provides up to $2,000 per year for tuition -- or worse, including a cap on deductions for charitable donations.

Some details, including how the administration intends to judge colleges' value to determine their eligibility for some campus-based aid and the new “Race to the Top” grants, remained unclear by day's end Monday.

Advocates for research and financial aid said they were pleased with the budget over all, although they cautioned that many fights in Congress lie ahead to preserve the maximum Pell Grant and stop student loan interest rates from doubling in July.

“The president continues to put forth budgets that seek to expand the student aid programs, to keep costs down and to increase transparency in what is becoming an even more complicated budget and student funding process,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators.

But for-profit colleges, left out of the $8 billion job training initiative, urged the president to reconsider. "We firmly believe that no stone should be left unturned in the search to find solutions to meet the needs of the job market," said Penny Lee, managing director of the Coalition for Educational Success, a group of career colleges, calling on the administration to "work on widening the impact of this career training fund by partnering with all institutions of higher education."

While some research priorities did better than others -- the National Institutes of Health would remain at its current funding level, although the administration says a new grant-making process will enable the agency to do more with less -- the proposed amounts pleased research universities overall.

“This president has been a fairly extraordinary president when it comes to the funding of research, and emphasizing the importance of research,” said Barry Toiv, vice president for public affairs at the Association of American Universities.

Higher education lobbyists, who traditionally have pressed the president and Congress for more money for their programs while resisting the kind of increased regulation and accountability Obama suggested in his State of the Union address, will walk a fine line this year. They consistently praised the president for his support of higher education, but said they were still concerned about the details of the plan to use campus-based aid as a carrot (or stick) to reward and punish individual institutions.

Obama proposed to pay for many of the programs through extra money from allowing the Bush tax cuts to expire and adding a new tax on the nation’s highest earners, known as the “Buffett Rule” after the investor Warren Buffett, a supporter of the policy.

But while the fate of federal support for higher education may be tied to the outcome of the tax debate, college groups said they do not plan to get involved in that fight. The American Council on Education doesn’t promote positions on tax rates. Other associations said they planned to advocate strongly for the higher education proposals, but will not lobby for higher taxes.

“Our overwhelming emphasis will be on the contributions that the funding would help our colleges to make, and how it will help local economic development and opportunity for individuals, as opposed to getting involved directly in the issue of the Bush tax cuts,” said David Baime, senior vice president for government relations and research at the American Association of Community Colleges.

For now, most said they were pleased with the president's budget -- and that they would wait for more details on the more controversial proposals.

“There are some details we’re going to want to quibble with them over and see if we can make workable,” Timmons said. “But that’s tomorrow’s fight.”

The Obama Budget for Education, Labor and Humanities Programs

The Obama Budget for Key Science Agencies, 2013