FEDERAL EDUCATION FUNDING. Caps, Cuts, Freezes and Sequesters. Joel Packer, Executive Director, The Committee for Education Funding

Transcription

1 FEDERAL EDUCATION FUNDING Caps, Cuts, Freezes and Sequesters Joel Packer, Executive Director, The Committee for Education Funding

2 Committee For Education Funding The Committee for Education Funding (CEF) is the oldest and largest education coalition. We represent 110 national organizations and institutions from PreK through graduate education. For more information: Follow us on Twitter: 2

3 Today s Presentation What is the CEF Budget Response? Why Invest in Education? What happened for Fiscal Years 2011 and 2012? Sequestration s Impact on Education Summary of President Obama's FY 14 Budget for Education K12 Programs Career, Technical and Adult Education Higher Education Education Research Children's Programs 3

4 CEF Budget Response 190-page analysis of the President's FY 2014 Budget includes: CEF's position on the budget Summary/analysis of the President's Budget List of programs terminated in FY 11 and FY 12 The Need To Invest In Education The Impact of Sequestration Analysis of 75 education and children's programs: Impact of the President's budget Impact of sequestration 4

5 CEF Membership Directory Listing of information about our members: Organization name/address/web address/key contacts/ s/phone numbers. Both publications are available on the CEF website: 5

6 6 THE NEED TO INVEST IN EDUCATION

7 7 MORE STUDENTS

8 Rising K-12 Enrollments 8 Source: CEF based on NCES Projections of Education Statistics to 2021

9 Rising Higher Education Enrollments 9 Source: CEF based on NCES Projections of Education Statistics to 2021

10 10 More Children in Poverty

11 11 More Hispanic Students

12 12 STATE AND LOCAL BUDGET CUTS

13 thousands Fewer Local Education Employees 8,200 8,100 8,000 8,119 8,094 8,052 7, ,00 fewer jobs 7,900 7,800 7,785 7,761 7,700 7,600 7,500 July 2008 March 2009 March 2010 March 2011 March 2012 March Source: CEF based on BLS seasonally adjusted employment data

14 State Appropriations for Higher Education Going Down 14 SOURCE: The College Board, Trends in College Pricing 2012, Figure 12B.

15 15 EARNINGS LINKED TO LEARNING

16 Unemployment Linked to Educational Attainment 16 Source: CEF based on BLS data

17 Earnings Based on Learning 17 Source: Georgetown University Center on Education and the Workforce; The College Payoff

18 THE PUBLIC OPPOSES EDUCATION CUTS 18

19 The Public Opposes Education Cuts Would you approve or disapprove of reducing federal funding for education as a way to reduce the size of the national debt? 19 Source: Pew Research Center for the People & the Press, October,

20 Two-thirds Want To Protect Education From Sequester Cuts 20 Source: CEF/FEI Poll, December 2012

21 THE FEDERAL BUDGET AND EDUCATION 21

22 FISCAL YEARS 2011/2012 $1.5 BILLION IN CUTS 22

23 Final FY 11 and 12 Appropriations FY 11 cut ED (other than Pell) by $1.2 billion. Teacher Quality grants cut 16%, Career/Tech grants cut 11%, ED tech eliminated FY 12 total ED funding cut by $233 million. All programs cut by 0.189% across-the-board cut. Both FY 11 and FY 12 maintained the Pell maximum award of $5,

24 Pell/Student Aid Cuts Enacted Maintaining Pell maximum paid for with a variety of restrictions and limitations on student loans and Pell. College students have contributed $4.6 billion out of their pockets to deficit reduction. 145,000 students have lost their Pell grant. 24

25 Selected programs eliminated: Even Start Literacy Through School Libraries Education Technology State Grants Javits Gifted and Talented Parental Information Resource Centers LEAP Byrd Honors Scholarships 25

26 Selected program cuts in FY 11 Teacher Quality State Grants = -$480 million (-16.3%) Career and Technical Education = -$140 million (-11%) Aid to HBCUs and MSIs = -$51.1 million (-8.3%) International Education = -$50.2 million (-39.8%) TRIO = -$26.6 million (-3.1%) GEAR UP = -$20.4 million (-6.3%) Regional Education Labs = -$13.1 million (-18.6%) 26

27 Fiscal Year 2012 Outlays Medicaid 7% Medicare 15% Education 2% Interest Other 6% Mandatory 13% Social Security 22% Defense 19% Nondefense discretionary (other than education) 16% 27

28 FY 12 Department of Education Discretionary Funding 28 Source: CEF based on Education Department data

29 FISCAL YEAR 2013 LARGEST EDUCATION CUTS EVER! 29

30 The Budget Control Act How small will the box be? 30

31 Caps and Cuts BCA set in law discretionary caps for ten years (FY 12-FY 21). Reduced spending by $900 billion over ten years. Supercommittee failure triggered sequestration. $1.2 trillion in automatic cuts between FY 13-21; 50% from defense, 50% from nondefense FY 13 cuts started on March 1. However, other than Impact Aid and Head Start, education cuts won t start until July. 31

32 32 32

33 Sequestration = Largest Education Cuts Ever! FY 13 = fixed percentage across-the-board (ATB) cuts. NDD cut is 5% = $2.5 billion for ED. Head Start cut $401 million. Pell grants exempt in first year. FY will not be ATB cut; further lowers discretionary caps Squeezes education $; Pell no longer exempt. 33

34 FY 13 Impact of Sequestration In millions $0 -$65 -$124 -$87 -$86 -$129 -$500 -$401 -$727 -$620 -$1,000 -$1,500 -$2, $2,500 Total Dep't. of ED -$2,478 Title I Impact Aid Teacher Quality IDEA Grants Career, Tech, Adult Student Aid Higher Ed Head Start

35 FY 13 CR Continuing Resolution extended for Labor-HHS-Education at FY 12 levels. New ATB cut of 0.2%. Then sequester cuts applied. Final FY 13 = cut of 5.23%. Final ED non-pell grant funding now lower than in FY

36 FISCAL YEAR 2014 CONGRESS MUST REPLACE THE SEQUESTER! 36

37 FY 14 Budget: Dueling Visions FY 14 Budget - House Budget by Chairman Ryan (R-WI) passed on party line vote. More than doubles the sequester cuts to nondefense discretionary (NDD) programs. Cuts NDD funding by $1 trillion over ten years. Cuts student aid and shifts mandatory Pell to discretionary side. Consolidates ESEA and job training programs. 37

38 FY 14 Budget: Dueling Visions Senate Budget by Chairman Murray (D-WA) also passed on party line vote. Repeals sequester Increases revenue by $900 billion. Includes strong support for Head Start, expansion of high quality pre K, strongly supports Title I and IDEA and continued investments in literacy, STEM, and career and technical education programs. Eliminate student loan fee increases, retains subsidized loans and flexible repayment programs, and facilitates passage of legislation to prevent student loan interest rates from doubling. 38

39 FISCAL YEAR 2014 BUDGET REQUEST

40 The President s FY 2014 Budget Repeals the sequester. Raises $600 billion in revenue. Includes some mandatory cuts. The discretionary budget for ED = $71.2 billion, a $3.1 billion increase over FY 12, or $5.5 billion over FY

41 The President s FY 2014 Budget Most discretionary increases are for new programs; most current programs are frozen (Title I, IDEA, Impact Aid Payments, English Language Acquisition grants, CTE state grants, Adult Ed state grants, SEOG, TRIO, GEAR UP, aid to HBCUs and other MSIs). The budget also includes mandatory funds for Preschool for All ($75 billion over 10 years), RESPECT teacher quality ($5 billion), educator jobs ($12.5 billion) and $8 billion for Community College to Career Fund. 41

42 President s FY 14 Budget - Taxes Enhanced 50% subsidy for school construction in proposed America Fast Forward Bonds. Permanently extend the American Opportunity Tax Credit for postsecondary education expenses. 42

43 President s Budget - Discretionary Overall discretionary ED spending would increase by $3.1 billion compared to FY 12 (+4.5%). ESEA = +$783 million (+3.3%) Excludes RTTT since all funding proposed for higher ed Preschool =+$750 million (new) Special Ed = +$18.6 million (+0.1%) Career/Technical/Adult Ed = +$13 million (+0.7%) Student Financial Aid = +$150 million (+0.6%) Higher Education = +$1.31 billion (+58.2%) IES = +$77.4 million (+13.0%) 43

44 $700 House Budget Cuts Nondefense Discretionary Funding Below Sequestration Budget Authority in Billions $650 $600 $550 $500 $450 $400 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 CBO Pre BCA Baseline BCA Caps Sequestration Murray Budget Obama Budget Ryan Budget 44 Sources: CEF Calculations based on CBO and OMB data

45 House 302(b) Allocations Labor-HHS-ED cut by 18.6% BELOW sequester level quadruples the sequester cuts! Allocation is 22.4% below the FY 13 CR presequester level. If all programs cut by equal %, examples of cuts: ED Total = -$12.2 Billion Title I = -$2.6 billion IDEA = -$2 billion Pell grants = -$4.2 billion Head Start = -$1.4 billion 45

46 46 The Foundation for Success Early Childhood, Elementary, and Secondary Education

47 47 Elementary/Secondary Education Program Increases (compared to FY 12): School Improvement Grants = +$125 million (+23.4%) 21 st Century Community Learning Centers = +$100 million (+8.7%) School Leadership =+$68.9 million (+236.7%) Promise Neighborhoods = +$240.1 million (+400.9%) Investing in Innovation = +$65.6 million (+43.9%) High School redesign = $300 million (new) Magnet Schools = +$2.9 million (+3.0%)

48 Elementary/Secondary Education Program Decreases Below FY 12: Impact Aid payments for federal property eliminated (-$66.9 million) 48

49 ESEA For ESEA, the Budget proposes to restructure programs based on the Administration s ESEA blueprint. It would consolidate/restructure 14 programs into eight new funding streams. In total, funding for the consolidated ESEA programs would increase by $494.2 million (+3.9%). Biggest increase ($265 million) is for STEM Innovation 49

50 ESEA New 25% set-aside in ESEA Title II to: recruit, prepare and support effective teachers and school leaders; improve educator evaluation and licensure systems and develop rigorous accountability systems for educator preparation programs; enhance the teaching and leadership professions 50

51 President s Budget - Discretionary All other discretionary ESEA programs are frozen at their FY 12 appropriated level: Title I, migrant education, neglected/delinquent, HEP/CAMP, homeless education, Impact Aid Basic Support, grants for state assessments, rural education, comprehensive centers, Native Hawaiian and Alaska Native education, Indian Education, English Language Acquisition grants. 51

52 52 Special Education - IDEA IDEA State Grants frozen Federal share of average per pupil expenditure (APPE) fell to 14.9% in FY 13 due to the sequester cuts. Lowest level since FY 2001! President's Budget restores sequester cut but freezes at FY 12 level. Federal share = 15.4% Preschool State Grants are frozen. IDEA grants for infants and families = +$20 million (+4.5%) National activities cut by $1.4 million (-0.6%).

53 53

54 Education, Careers, and Lifelong Learning 54

55 Career, Technical and Adult Education Perkins Act Career/Technical Ed State grants are frozen at FY 12 Level. $100 million carved out for a competitive CTE innovation fund Funding is based on the Administration s Blueprint for Transforming Career and Technical Education

56 Career, Technical and Adult Education Adult Ed State grants are frozen. Of the $595 million, $74.7 million is set-aside for English Literacy/Civics Education State Grants. Adult Ed National Leadership Activities increased by $3 million (+26.5%) Library Services and Technology Act funding is cut by $6.4 million below FY 12 (-4.1%). Museum Services Act is increased $2.1 million above FY 12 (+0.7%)

57 The Gateway to Opportunity Higher Education 57

58 58 Pell Grants Maintains the FY 12 discretionary level of $ billion. Coupled with automatic mandatory funding, the Pell maximum award increases by $140 to $5,785. A Pell grant surplus of $9.797 billion in FY 13 is carried over into FY 14. If FY 14 appropriation is maintained at FY 13 level, produces another surplus of $4.889 billion which would be carried over into FY 15. If FY 15 appropriations level maintained at FY 13, CBO projects a $793 million FY 15 shortfall. FY 16-FY 23 have projected yearly shortfalls of $6-7 billion.

59 Student Loans Current 3.4% interest rates on subsidized Stafford loans set to double on July 1 The budget proposes to change to market-based rates. New rates would be equal to the 10-year Treasury note rate plus 0.93% for subsidized loans, 2.93% for unsubsidized loans, and 3.93% for PLUS loans. Interest rate would be fixed for each individual loan. Also proposes expanded eligibility for the Pay As You Earn plan. CBO says combined plan saves $3.1 billion over 11 years (FY 13 - FY 23). 59

60 Student Loans 60 House-passed bill, HR 1911, also switches to market rates. Stafford loans (subsidized and unsubsidized): 10-year Treasury note plus 2.5 percent, capped at 8.5 percent. PLUS loans (graduate and parent): 10-year Treasury note plus 4.5 percent, capped at 10.5 percent. Interest rate changes every year on each individual loan. CBO says bill saves $3.7 billion over 11 years (FY 13 - FY 23). Democrats proposed a 2-year extension of 3.4% subsidized loan interest rate paid for by closing tax loopholes.

61 Student Loans Mandatory savings in Budget proposed to be used for Pell grants: Adjust guaranty agency loan rehabilitation compensation. Saves $2.6 billion Revise Perkins loans expand loan volume, eliminate in-school interest subsidy, raise interest rate. CBO projects that raises $9.23 billion over ten years. 61

62 Other Student Financial Aid Federal College work-study = +$150 million (+15.4%) SEOG is frozen. $190 million to replace TEACH with the Presidential Teaching Fellows program. Mandatory spending. 62

63 Higher Education - Aid to Students TRIO and GEAR-UP both frozen. Graduate Assistance is frozen. 63

64 Higher Education - Aid to Institutions Aid to HBCUs, HSIs, other Minority-Serving Institutions frozen. International Education = +$6.9 million (+9.3%) Teacher Quality Partnerships consolidated into ESEA. New Programs: Race to the Top: College Affordability and Completion fund = $1 billion First in the World = $247.2 million under FIPSE; i3 for higher education 64

65 Forging Success Educational Research, Statistics and Improvement 65

66 Institute for Education Sciences Program Increases: Research, development, and dissemination = +$12.5 million (+6.6 %) Statistics = +$14.0 million (+12.9%) Research in Special Education = +$10 million (+20.0%) Statewide data systems = +$46.9 million (+123.2%) ED would also use a portion of i3 funds to support the proposed Advanced Research Projects Agency-Education (ARPA-ED). 66

67 Institute for Education Sciences Program Decreases: National assessment (NAEP) = -$5 million (-3.9%) National Assessment Governing Board (NAGB) = -$1 million (-11.5%) Programs Frozen: Regional Educational labs Special Education Studies 67

68 Education-Related Programs Meeting the Human Needs of America s Children 68

69 High Quality Preschool $75 billion over 10 years in mandatory funds to states to provide high-quality preschool to all children from low and moderate income families. State match starts at 10% rises to 300%. Paid for with tobacco tax increase $750 million in discretionary funds for Preschool Development Grants to states to strengthen their capacity to provide high-quality preschool to all four-year-old children so that they will be prepared to leverage the mandatory funds. $20 million increase for IDEA Infants and Toddlers grants

70 Children s Programs Head Start (in HHS) = +$222.2 million above FY 12 (+2.8%) The budget proposes $1.4 billion for new Early Head Start Child Care Partnerships. Child Care Development Block Grant (in HHS) = +$200 million over FY 13 (+8.8%) There is also $3.4 billion for the mandatory portion (Child Care Entitlement (CCE)) = +$414 million (+14.2%) Will serve an additional 100,000 children 70 70

71 Children s Programs Child Nutrition: mandatory funding increases by $1.13 billion over FY 13 (+5.8%) million children served by School Lunch 14 million served by School Breakfast CHIP mandatory funding increases by $70 million to serve 8.3 million children. Most low-income entitlements serving children are exempt from sequestration including CHIP, Child Nutrition, Child Tax Credit, Child Care Entitlement, Medicaid, SNAP

72 72 Questions?