During his address to a joint session of Congress on Tuesday night, the President set a bold new goal for American parents and educators: by 2020 the US should again lead the world in the proportion of our population with a college degree. This week, Campus Progress was excited to see the Obama administration take the first steps toward the attainment of this goal by laying out a progressive funding plan for higher education in the 2010 budget.
The 2010 budget includes several higher education policies that will improve access and completion rates and reduce college costs while expanding, simplifying, and strengthening the programs that students rely on for grants and financial aid. Here are some of the major policy changes for Higher Education:
– Tying Pell Grant Funding to Inflation: Pell grants are currently funded through the annual budgeting process, which means that growth is unpredictable, and that it is often stagnant for years. This legislation would make Pell Grant funding mandatory, and tie future funding to a rate that is 1% above the Consumer Price Index.
– Making the Student Loan Program Reliable and Efficient: There are currently two federal systems used to distribute the same kinds of student loans: the “Direct Loan Program,” and what is nicknamed the “Guaranteed Loan Program” or FFELP. The new legislation would create all new federal student loans through the Direct Loan Program, which is much more cost-efficient and reliable for students and families. The administration estimates that a $5,000 loan made through the Direct Loan Program would cost taxpayers approximately $200 less over the life of the loan than the same loan made through the FFELP. By eliminating FFELP, we will be saving an estimated $24.3 billion which will be use to help fund need-based grant aid.
– Creating Federal-State Partnerships to Improve Access and Completion: This legislation will create a $2.5 billion fund for partnerships that aim to support students from under-served backgrounds, and improve completion rates at colleges and universities.
– Improving Education Tax Credits and the Perkins Loan Program: The American Opportunity Tax Credit was created as part of the American Recovery and Reinvestment Act (“the stimulus bill”), and offers a partially refundable $2,500 tax credit for tuition, books and other college-related expenses. This legislation would make it permanent. It also reforms the Perkins Loan program to provide more options to students facing gaps or emergencies, better target the program to those that need it most, and to reward schools that control costs and provide need-based aid.
Campus Progress looks forward to working with the administration, Congress, partner organizations, and students to support these vital reforms.
This material was created by Campus Progress, where Katie Andriulli is the Communications and Outreach Manager.
