Additional Budget Thoughts

Today, the Obama administration released its budget request for the 2012 fiscal year. You can read the whole portion for the Department of Education here.  Kevin already offered some thoughts on the higher education portion last night, but now that the actual documents are available, it’s worth offering a few additional observations.

Learning from TEACH

In our recent paper on taking a measured approach to improving teacher preparation, myself and several others from Education Sector argued that it was time to end the TEACH Grant Program–a $4,000 grant/loan given annually to prospective teachers that must be repaid of they fail to meet certain teaching requirements.  In its place, we said it would be better to combine money spent on TEACH and existing federal teacher student loan forgiveness options into a new program that works with states to reward excellent teachers already in the classroom.

The budget proposal’s Presidential Teaching Fellows program bears some similarity to our suggestion. It eliminates TEACH and instead gives funds to states so they can provide $10,000 scholarships for students at the best preparation programs (as determined at least partially by the academic growth of graduates’ students). Participation requirements are a bit tougher than what we originally suggested–states in this proposal would have to hold ineffective programs accountable and upgrade licensure/certification standards, while we suggested they would have to provide an honest accounting of their data collection and usage efforts–but that’s partially a reflection of using the fellows program for multiple aims, rather than as part of a crop of new programs we suggested.

That said, the Presidential Fellows is an improvement over TEACH Grants. For one, scholarship funds are only given for the final year of education, which should reduce concerns about recipients failing to meet teaching requirements. Second, the program has quality requirements, which lessens the odds of the federal government giving grants to students who will go on to be ineffective teachers. Finally, tying the money to larger legislative changes ensures its effect goes beyond the classroom. The real trick will be figuring out how to evaluate quality while states are still upgrading data systems to tie students results to teachers’ preparation programs and what to do about programs that may decrease or increase in quality over time.

Fixing FIPSE

The Fund for Improvement of Postsecondary Education, or FIPSE, is the source for much of the government’s most innovative work in higher education. Unfortunately, it’s also the main vehicle for college earmarks, meaning there’s money for exciting projects is instead shunted to pay for things like VOIP phone service.

Like other budgets in the past, this year’s request zeroes out the earmarks portion, but it would replace the lost pork with the $123 million “First in the World” competition, which award grants for access, quality, and completion. The budget summary says the program is modeled after the Investing in Innovation fund, but it doesn’t sound far removed from a Race to the Top for higher education.

Completion Incentives

In addition to the new FIPSE fund, the budget proposal also introduces a new $50 million College Completion Incentive Grants program, which would give money to about half the states to then be disbursed to individual institutions based on how well they do in getting students to complete. Though not a large program, it appears to be an example of leveraging federal dollars to get policy changes, as recipient states must:

…align high school graduation requirements with participating institutions’ expectations for academic preparation, create stronger articulation agreements, facilitate transfers, and match Federal funds or provide their own performance-based funding for institutions.

It’s an interesting idea that provides matching money to institute some performance-based funding. The real trick will be how big the awards end up being–smaller money creates more chances to “win,” but bigger grants is probably a greater incentive to change.

Pell Grants

The most controversial part of the request appears to be the proposal to eliminate the year-round Pell Grant, an idea introduced in 2008 that allowed students to get multiple awards in a single year. David Leonhardt of the New York Times isn’t a fan and neither is University of Wisconsin Professor Sara Goldrick-Rab.

In an ideal world would we keep the year-round Pell Grant proposal? Absolutely. But in weighing this proposed cut it’s worth remembering the alternative–there are some proposals out there that would decrease the maximum grant by several hundred dollars. At the end of the day, ensuring that all Pell recipients get as large an award as possible is a better outcome than having everyone get smaller grants, even if some students get a second award. Also keep in mind that if the second award shrinks a great deal due to cuts that some students might not use it anyway because it isn’t of sufficient amount to have them not work over the summer.

The proposal suggests a few other ways to help pay for Pell that are solid ideas. It would allow students with loans in both the now defunct Federal Family Education Loan Program and the government-based Direct Loan Program to move all their loans into the latter. From a policy standpoint, this is good for students because they won’t have to deal with multiple servicers, but it also provides the appearance of budget relief thanks due to quirks around how the government estimates the cost of loan programs.

The proposal also saves money for Pell by eliminating in-school interest subsidies on loans made to graduate students. While those subsidies lower the amount over the long run, they don’t make sense for graduate students where there are less concerns about access and they earnings boost from an advanced degree should allay repayment difficulties.

The final source of savings for Pell is greater use of Internal Revenue Service data to avoid awarding incorrect grants. That change should also help students and parents by reducing the amount of information they need to provide.

Terminations

At some point Congress should consider a law that automatically eliminates any program that has been recommended for termination multiple times by presidents from different parties over a 10 year period. For example, the Historic Whaling Partners Program has been targeted for elimination in every one of the 10 budget requests that have been released since its creation–a period that spans both George W. Bush and Barack Obama. Of the 13 education programs this year’s budget targets for elimination, six were also singled out in Bush’s 2009 fiscal year budget. The other eight weren’t signed into law after Bush had left office. There’s clear agreement across both parties to get rid of most of these programs, it’s a testament to the difficulty of the political process that they persist.

Tagged as: College Completion, Pell Grants, TEACH grants, Teacher Preparation