News

February 5, 2002

President Bush released on Monday a bare-bones budget request for federal student-aid programs for the 2003 fiscal year.

Under the president's proposal, the maximum Pell Grant would remain at $4,000. The president did not ask for any spending increases for other important student-aid programs either, including College Work-Study, Supplemental Educational Opportunity Grants, and Perkins Loans. The budget request also calls for eliminating the Leveraging Educational Assistance Partnerships program, which matches each dollar that states commit to need-based aid.

Also on Monday, the Bush administration released a list of 1,626 earmarked projects that lawmakers included in the 2002 appropriations bill that finances the Departments of Labor, Health and Human Services, and Education. The president has called on Congress to rescind funds for most of these projects, many of which went to colleges, and use the money to cover a $1.3-billion shortfall in the budget of the Pell Grant program this year. The deficit in the Pell Grant program's budget was caused by an unexpected growth in the demand for the grants in 2001.

In addition, the administration has proposed a major change in the way that the maximum Pell Grant is set each year to avoid the kind of budgetary snafus the program experienced this year. Under the president's plan, the authority to set the maximum grant each year would shift from Congress to the U.S. secretary of education.

At a news conference on Monday, William D. Hansen, the deputy secretary of education, defended the president's budget proposals for the student-aid programs, noting that spending on Pell Grants has more than doubled over the past five years, and that the maximum award has risen $700 in the last two years.

"We have more money than ever going to higher education to make education more affordable," he said.

College lobbyists and student advocates, however, called the president's budget request disappointing, particularly in a year when states are slashing their higher-education budgets, forcing tuition at many public institutions to rise rapidly.

"This budget does not meet the needs of students," said Corye Barbour, legislative director for the United States Student Association, a lobbying group for students.

Mr. Bush proposed increasing spending on historically black colleges and colleges that educate many Hispanic students by $12-million, or about 3.6 percent, to a total of $213-million for black colleges, and $89-million for Hispanic-serving institutions.

The president also proposed forgiving up to $17,500 in student loans for students who agree to teach mathematics or science, or serve as special-education teachers, in schools with large numbers of disadvantaged students. Currently, the government forgives up to $5,000 in loans for such students.

Under the president's plan, the TRIO programs for disadvantaged students and GEAR UP, which helps prepare middle-school students from low-income families for college, would receive the same amount of money in 2003 that those programs are receiving this year. According to documents that accompanied the budget, the administration is assessing the effectiveness of the two programs, which serve similar functions. "Funding for these programs in 2003 is held steady at the 2002 level pending the results of this review," the budget documents state.

Earmarks and Pell Grants

College lobbyists have had mixed reactions to the president's call to Congress to make up for the shortfall in the Pell Grant's budget in a "supplemental" appropriations bill this year by cutting earmarked projects.

Supplemental appropriations bills provide funds for unexpected and emergency expenses that arise during the year. Occasionally, lawmakers also rescind funds from spending bills that have already been passed to help pay for the emergency items.

While lobbyists are happy that the president wants to fix the Pell Grant problem in the supplemental bill this year, many of them are upset that the money would come from projects that benefit many colleges. Others accuse the administration officials of "grandstanding," making the proposal knowing full well that lawmakers will never agree to rescind funds from their pet projects.

"This is by no means grandstanding, it's a serious proposal," said Mr. Hansen, the deputy secretary. "We just felt that this was an important way in this time of limited funds to make sure that the funds were being spent on our highest-priority programs."

The administration's proposal to give the education secretary the authority to set the maximum Pell Grant took college lobbyists by surprise. In December, Congress removed a provision from its 2002 appropriations bill for the Education Department that would have given the education secretary the authority to reduce the size of the maximum award when the department does not have enough money to cover the increase.

Department officials said that giving the education secretary the power to set the maximum Pell Grant would allow the secretary to make this decision much closer to the affected year than Congress does now and avoid the kinds of budgetary problems the program experienced this year, the officials said.

"Why we're asking for that language is to set policy at the front end of the year instead of waiting until the back end, to try to bring a little more stability into the way Pell Grants are set," Mr. Hansen said.

College lobbyists had little good to say about this proposal. "It's Congress's prerogative to make a statement each year about where they think the maximum Pell Grant should be," said Becky Timmons, director of government relations at the American Council on Education.

The full text of the announcement can be found on The Chronicle of Higher Education chronicle.com.