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Every several years, Congress reauthorizes the Higher Education Act (HEA) and the Elementary and Secondary Education Act (ESEA), also known as the No Child Left Behind law. These bills establish national goals for improving the nation’s kindergarten through college (K-16) public school system and provide direction and federal funding for both public and private, non-profit educational institutions. They address:

• Teacher training
• Expanded use of information technology
• Improved education access for non-traditional students or individuals on welfare seeking training
• Academic intervention that furthers student education
• Advanced educational initiatives

Elementary and Secondary Education Act

The most recent ESEA reauthorization contained four primary guidelines: (1) stronger accountability to ensure academic results; (2) increased flexibility and local control; (3) expanded options for parents; (4) an emphasis on teaching methods that have been proven to work.

Specific goals in the legislation include:

• Improving the academic achievement of disadvantaged students
• Preparing, training, and recruiting high quality teachers and principals
• Establishing programs to create smaller student to teacher ratios.

The bill is considered a significant deviation from existing federal policy because it provides states significantly more control over education policy. At the same time, the bill requires states to establish standards for school districts and schools, which must make "adequate" yearly progress. Schools that fail to make progress will be held accountable.

Higher Education Act

In 2008, the Higher Education Opportunity Act of 2008 (P.L. 110-315) was overwhelmingly passed by Congress and signed into law in August. The Higher Education Act was last reauthorized in 1998 and had expired in 2003, making P.L. 110-315 five years overdue.
The Higher Education Opportunity Act aims to improve higher education by addressing the issues of affordability, quality, and accountability, reforming the federal financial aid application process, enhancing transparency in the student loan sector, helping more military veterans and their families attend college, increasing grant aid for the neediest students, enhancing programs to strengthen the college pipeline, and promoting teacher preparation programs.

The key provisions of the Higher Education Opportunity Act include:

• Requires the top five percent of colleges that have the greatest cost increases for their sector to take steps to hold costs down;
• Replaces the complex, 7-page Free Application for Federal Student Aid (FAFSA) with a 2-page “EZ-FAFSA”;
• Bans lenders from offering gifts to college officials as a condition of making student loans, and requires colleges to adopt a code of conduct regarding student loans;
• Helps service members, veterans, and their families attend and pay for college by providing interest-free deferral on student loans while service members are on active duty, in-state tuition rates for service members and their families who move to a new state due to military service, and new college scholarships of up to $5,000 for children and family members of service members who have died since 9/11; and
• Allows low-income students to receive Pell Grants year-round, expands eligibility for the Academic Competitiveness and National SMART Grant programs, and expands Federal loan forgiveness for a wide variety of professions, including civil legal aid lawyers, prosecutors, public defenders and teachers;

The House and Senate continue to work on the Fiscal Year 2009 appropriations bills, with neither the House nor Senate having passed one of the annual spending bills.

Boost for STEM Education

The America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act (or America Competes Act) was enacted to elevate America's global economic competitiveness with improved education initiatives in the areas of science, technology, engineering and mathematics (STEM). Many of the provisions included in the Act evolved from recommendations in the influential 2005 report by the National Academies, "Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.”
In general, the Act emphasizes increasing the number of schoolteachers qualified to teach science, and it helps finance college programs to produce more of them. The legislation also encourages universities to educate professors to more effectively communicate their work to the public. It also requires universities to train scientists to conduct their research ethically.

Department of Education

The America Competes Act authorized $151-million in new competitive grants for university programs that prepare schoolteachers in science, math, and "critical" foreign languages. Eligible programs include those that award students bachelor's degrees and teaching certificates in STEM fields. The Act also included a new grant program to provide $125-million for programs that award master's degrees and teaching credentials to "science professionals." The bill also authorized competitive grants to states to promote better "alignment" of elementary and secondary education "with the knowledge and skills needed to succeed" in college courses.

National Science Foundation

The America Competes Act authorized large increases for a select number of science-education programs involving universities, such as a 14-fold expansion, to $140.5-million by 2010, of the NSF's Robert Noyce Scholarship Program, which provides money to undergraduates who agree to work as science teachers in schools after they graduate. Funding for the National Science Foundation's Math and Science Partnership program was doubled to encourage universities to work with elementary and secondary schools to improve science teaching. The measure also doubled the STEM Talent Expansion Program, which gives universities grants to increase their production of graduates with science degrees.

The Act also issued a number of other directives to the National Science Foundation, including one to finance programs at universities that award professional science master's degrees for students intending to work in industry. Another provision authorized a pilot program to help younger scientists land NSF grants. The legislation also expanded the agency's support for high-performance computing.

Department of Energy

The America Competes Act authorized $300 million for the Department of Energy to establish the Advanced Research Projects Agency for Energy (ARPA-E) – a unit modeled after a similar, successful agency in the Defense Department – to finance innovative research to develop new sources of energy.

The legislation also authorized grants to young scientists to help them begin careers at universities and the Department of Energy's national laboratories, and it established the agency's first graduate research fellowships.

White House Office of Science and Technology Policy

The America Competes Act established a President's Council on Innovation and Competitiveness, similar to the existing President's Council of Advisers on Science and Technology.

The American Recovery and Reinvestment Act of 2009

The President signed the American Recovery and Reinvestment Act of 2009 (The Recovery Act) on February 17, 2009 (P.L. 111-5).  The $787 billion bill includes $500 billion in spending and $287 billion in tax cuts. The American Recovery and Reinvestment Act provides $311 billion in appropriations, including the following breakdown of critical investments:

• Investments in Infrastructure and Science - $120 billion
• Investments in Health - $14.2 billion
• Investments in Education and Training - $105.9 billion
• Investments in Energy, including over $30 billion in infrastructure - $37.5 billion
• Helping Americans Hit Hardest by the Economic Crisis - $24.3 billion

Investment in Education

The Recovery Act included significant additional one-time funding increases in several key areas, and most funds are available for expenditure over the next two years. In general, most states and school districts will receive one half to two thirds of Recovery Act education funds by the end of summer 2009, and can expect to receive the remaining Recovery Act funds by fall 2009. 

Congress provided Recovery Act funding through two methods.  A little over half ($53.6 billion) of the total provided to the Department is through the State Fiscal Stabilization Fund (SFSF), a separately authorized program created by Congress for the two fold purpose of saving education jobs and promoting reform.  The remaining funds, roughly $44 billion, were appropriated for currently authorized Federal education programs.

Significant Funding Boost

Within the SFSF, which provided funding for public elementary, secondary and post secondary education, and, as applicable, early childhood education programs and services, there is also funding for innovative programs that are designed make America leaders in 21st century education.  The Race-to-the Top fund provides $4.4 billion in competitive grants to States on the basis of their plan for dramatically improving student achievement and closing achievement gaps.

The What Works and Innovation Fund provides $650 million in competitive grants to (local education agencies) LEAs and partnerships between non-profit organizations and LEAs that have made significant progress in improving student achievement, or have demonstrated significant improvement in other areas, to expand their work and serve a models of best practices.

Title I

The Recovery Act also provided $10 billion in additional FY09 funds for LEAs for schools that have high concentrations of students from families that live in poverty.  In addition to Title I grants, the Recovery Act provides $3 billion for school improvement grants.  These grants are designed to help States turn around low performing Title I schools that have been identified for improvement, corrective action or restructuring.

IDEA

The Recovery Act provided $12.2 billion for State formula grant programs authorized by IDEA, including $11.3 billion for Part B grants to States, $400 million for Part B Preschool grants, and $500 million for Part C grants for Infants and Families.

Rehabilitation Act

The Recovery Act included $540 million for the Vocational Rehabilitation (VR) State Grants program, authorized under Title I of the Rehabilitation Act of 1973, as amended.  The VR State Grants program provides grants to States to help individuals with disabilities, especially those with the most significant disabilities, prepare for, obtain, and maintain employment.

Education for Homeless Children and Youths

Included in the President’s Recovery Act is $70 million for the McKinney-Vento Education for Homeless Children and youths programs. These resources will address the educational and related needs of some of the most vulnerable members of our society, homeless children and youth.

Teacher Programs

The Teacher Incentive Fund, which includes $200 million in order for school districts and States to develop and implement innovative and performance-based compensation systems that reward teachers and principals for raising student achievement and for taking positions in high need schools.

The Teacher Quality Partnership, which received $100 million, was designed to prepare teachers to enter high needs schools and early childhood education programs.  The partnership is designed to hold teacher training programs accountable for preparing effective teachers and recruiting highly qualified individuals into the workplace.

FY 09 Omnibus Appropriations

On March 11, 2009 the President signed the Omnibus Appropriations Act of 2009 (PL 111-8) in to law.  The Act, which consists of nine regular appropriations bills for fiscal year 2009 that were outstanding from the prior congress, as well as further provisions related to Homeland Security and other matters, is the result of negotiations between the House and Senate Appropriations Committees that occurred before its introduction. 

The Act makes appropriations for education of the disadvantaged, school improvement programs, innovation and improvement, and financial assistance programs, including setting the maximum Pell grant award at $4,860 during award year 2009-2010.

The Future of Education- The President’s FY10 Budget

President Obama has indicated that improving our education system will be one of the highest priorities of his administration. Major changes in Higher Education include:

Student Financial Aid Overview

Overall, the FY10 budget would provide $46.7 billion in discretionary appropriations for the Department of Education, an increase of $1.3 billion above the comparable discretionary total for FY09.

The President's budget proposes the following for student aid programs:

Pell Grants: The budget recaps the proposal unveiled in February to provide $28.7 billion for Pell Grants in FY10, supporting a maximum grant of $5,550 to be increased annually based on the consumer price index plus one percentage point. The request would fund Pell Grants for nearly 7.6 million students. The budget proposes to make Pell Grants a full entitlement. (This would require amending the Higher Education Act to stipulate that Pell Grants are an entitlement to the individual and to remove eligibility provisions created by the College Cost Reduction and Access Act.)

The President’s budget states that the cost of this policy proposal over the adjusted baseline would be reduced by the $7.5 billion of remaining budget authority provided by the American Recovery and Investment Act, as well as by the funds provided previously in the College Cost Reduction and Access Act.

Campus-Based Aid

Academic Competitiveness and SMART Grants: The budget would cancel $511 million in unobligated balances. The budget states that “remaining balances are sufficient to meet estimated demand in these programs through the 2010-2011 academic year, when the authorizing statute specifies the program will sunset”. Congress rescinded $525 million in unneeded ACG and SMART balances in 2008 and delayed the availability of $887 million from 2009-2010.

The budget requests for the individual programs are the following:

Perkins Loans: The budget recaps the proposal unveiled in February to modify and expand the Perkins Loan program. Under the proposal, funding for the program would increase to $6 billion from the current $1 billion and the number of participating institutions would expand. Loans would be delivered in the same way as Pell Grants and Direct Loans, and would be serviced by the same private-sector companies that service Direct Loans and Federal Family Education Loans (FFEL) acquired by the Department. Loan volume would be allocated among degree-granting institutions using a method to be determined in consultation with Congress. The Administration intends for the new formula to “encourage colleges to control costs and offer need-based aid to prevent excessive indebtedness. It may also reward schools that enroll and graduate students from low-and middle-income families.”

Perkins Loan borrowers would continue to be charged the current five percent interest rate; interest would accrue while students are in school. Other terms and conditions and loan maximums would be the same as those in the current unsubsidized Stafford Loan Program. Schools would retain their share of the revolving funds, as well as amounts sufficient to cover the costs of various Perkins Loan forgiveness provisions.

Supplemental Educational Opportunity Grants (SEOG): The budget would provide $757 million for SEOG, the same level as FY09, which would generate $959 million in new aid for 1.3 million students.

Federal Work-Study: The budget would provide $980 million for this program, the same level as FY09. This funding would provide $1.2 million in new aid for nearly 800,000 students.

TEACH Grants: For budget and financial management purposes, this program is operated as a loan with 100 percent forgiveness of outstanding principal and interest upon completion of a student’s teaching service requirement. However, the Administration estimates that about 80 percent of participating students will not complete the required service, so their grants will convert to unsubsidized Stafford loans. For that reason, the budget projects that federal revenue from the program will exceed projected costs by $2 million in FY10.

The FY10 budget allocates $870 million for student aid administration. The budget estimates that the Department of Education will provide more than $129 billion in new federal student aid grants and loans to more than 14 million students and parents in FY10. It also anticipates that the Department will originate and service all federal student loans beginning in July 2010 and will service the more than $215-billion portfolio of student loans already managed by the Department.

Higher Education Programs

Graduate Assistance in Areas of National Need (GAANN): The budget would flat-fund GAANN at $31 million, supporting 700 fellowships through competitive grants to institutions of higher education.

Javits Fellowships: The budget would flat-fund Javits at $10 million, supporting 218 fellowships in 2010.

International Education Programs: The budget would fund International Education and Foreign Languages Studies (IEFLS) at $118.9 million, the same as FY09. This would include $102.3 million for domestic programs, $14.7 million for overseas programs, and $1.8 million for the Institute for International Public Policy. Within those programs, the request would fund about 463 grants to institutions of higher education, support more than 1,005 individuals through fellowships and projects, and support the participation of more than 100 underrepresented minority students in international service programs.

Key proposals in the FY10 budget that will impact Elementary and Secondary education programs include the following:

• $500 million for a new program of Title I Early Childhood Grants, which would encourage LEAs to use Title I Recovery Act funds to start or expand Title I preschool programs.
• $300 million for a new Early Learning Challenge Fund, including the President’s Zero-to-Five initiative, to help States develop of refine systems for rating and improving the quality of early learning programs.
• $10 million for the Promise Neighborhoods initiative to provide one year planning grants to non profit, community based organizations to develop plans for comprehensive neighborhood programs that provide the necessary support for children and youth from preschool through college.
• $162 million for Early Reading First to expand for high quality research-based early literacy services for preschool children.
• $370 million for an expanded Striving Readers program for adolescent literacy demonstration grants and to help school district implement comprehensive and coherent programs for reading instruction for children in the elementary grades.
• $517 million for the teacher Incentive Fund in order to strengthen the educator  workforce by providing financial awards for principals, teachers and other personnel who raise student achievement.
• $1.5 billion in Title I School Improvement Grants to help States and LEAs to develop and implement comprehensive and research based improvement plans for a growing number of schools that have been identified for improvement, corrective action or restructuring.
• $50 million for a High School Graduation Initiative to promote innovative strategies for increasing high school graduation rates, especially in the so-called “drop out factories.”

Historically Black Colleges and Universities

The FY10 Budget proposal provides significant shifts in funding for Historically Black Colleges and Universities (HBCUs) year over year, the following programs are impacted by the FY10 Budget: 

Strengthening Historically Black Colleges and Universities- Department of Education

This specific funding supports grants to help historically black undergraduate institutions to improve and expand their capacity to serve students, and to strengthen management and fiscal operations. This program funding was reduced from $323 million in FY09 to $250 million in FY10. Net reduction is $73 million.

Minority Science and Engineering Improvement- Department of Education

These funds support grants to predominantly minority institutions to help them make long-range improvements in science and engineering education and to increase the participation of minorities in scientific and technological careers.  This program received no change in funding from FY09 numbers, as the total FY10 funding is $9 million.

Economic Impact and Diversity- Department of Energy

This office is responsible for advising the Secretary on the effects of the department's policies, regulations and actions on underrepresented population groups, small and minority business enterprises, and minority educational institutions. The office develops department-wide policies, strategies and goals and establishes program priorities including supporting levels of HBCUs, ensuring that the bank deposit financial assistance program remains operational and funded to provide minority-owned financial institutions with stable deposits to assist in building economic viability for minority entrepreneurs, businesses and communities, as well as promoting and increasing prime contracting, subcontracting, and energy technology opportunities for small businesses in order that they may fully participate in the acquisition process and technology programs at DOE.  Funding for this office was reduced from $6 million in FY09 to $4 million in FY10.

Historically Black College and University Capital Financing Program- Department of Education

The HBCU Capital Financing Program provides HBCUs with access to capital financing for the repair, renovation, and construction of classrooms, libraries, laboratories, dormitories, instructional equipment, and research instrumentation. The administration's proposal would include $20.228 million in loan subsidy to HBCUs (net increase is $10 million), allowing the program to guarantee an estimated $178 million in new loans in 2010.

Community Development Fund- Department of Housing and Urban Development

Within the Community Development fund, $150 million is provided for a Sustainable Communities Initiative. The objective of this initiative is improved coordination of transportation and housing investments that result in more regional and local sustainable development patterns, reduced greenhouse gas emissions, and more transit accessible housing choices for residents. These funds will stimulate more integrated regional planning to guide state, metropolitan, and local decisions, investments, and reforms in land use, transportation and housing. A component of this fund, the University Community fund is funded at $25 million. These funds serve to assist universities in revitalizing their surrounding communities with special attention to Historically Black Colleges and Universities, Tribal Colleges and Universities, Alaska Native/Native Hawaiian Institutions, and Hispanic-Serving Institutions.  These funds will promote revitalization in communities surrounding the universities, with a renewed emphasis on energy conservation, homeownership training/counseling, and other community and economic development activities.