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POTUS Announces Student Aid Bill of Rights

Today, President Barack Obama plans to unveil a “Student Aid Bill of Rights” designed to allow everyone to access and pay for quality higher education at Georgia Tech in Atlanta. An accompanying Presidential Memorandum contains several directives to federal agencies that officials say will make loan repayment easier and more equitable. While details are not fully known, it will mandate a complaint system where borrowers can log concerns and track responses “in a user-friendly way.” The Education Department will also be able to use the system to gauge loan servicer quality and the President will also ask the department to study how to address complaints against colleges, including potentially referring them to enforcement agencies when an institution makes misleading claims about job placements.

You can watch the President’s remarks at 1:30 p.m. ET.

The Administration’s Fact Sheet is here. 

The Office of Federal Relations will provide additional information as it becomes available.

Pell Grant Levels Announced

The Department of Education announced the maximum Pell grant levels for 2015-2016 today. The agency said the maximum award amount will be $5,775, which is an increase of $45 over the 2014-2015 award maximum.

The amount is affected by the Student Aid and Fiscal Responsibility Act (SAFRA), which was incorporated as part of Public Law 111-152. SAFRA provides for an automatic annual increase, based on changes in the Consumer Price Index—through award year 2017-2018—to the appropriated Federal Pell Grant maximum award. This change has resulted in a 2015-2016 maximum award of $5,775. The corresponding maximum Pell Grant eligible expected family contribution (EFC) for 2015-2016 will be 5198.

Read the announcement here.

President Obama Drops Controversial 529 Plan

President Obama has officially dropped the proposal outlined in his recent State of the Union Address that would eliminate the tax advantage of 529 investment programs after facing severe push-back from lawmakers on both sides of the aisle and parents across the country.

Per the proposal, any money earned from future contributions to 529 college savings plans would have been subject to a tax. That revenue would have offset the cost of expanding the American Opportunity Tax Credit, which gives a tax break for higher-education expenses of up to $2,500 per student. Administration officials say the majority of families that would have lost a tax break on a 529 plan would have gained a break from the expansion of the AOTC tax credit. Critics warned the proposal would inequitably tax middle-class families at a time when college affordability is a significant issue.

The director of Washington State’s 529 program, called the Guaranteed Education Tuition plan (GET), shared concerns with Obama’s proposal in a Seattle Times article, which can be viewed here. The New York Times coverage of the Administration’s backpedaling can be read here.

White House Proposes Two Years of Free Community College

In advance of his State of the Union address, President Obama is traveling to Tennessee today to announce one of his keystones of his 2015 agenda: two free years of community college.  The proposal, called America’s College Promise, is based on Republican Governor Bill Haslam, who developed and launched Tennessee Promise, which begins this year. Tennessee Promise allows any high school graduate in that state is eligible for two years of free community college tuition under the Tennessee Promise. The President’s announcement is expected to be a cornerstone of his FY16 Budget Request.

The Administration’s proposal would make community college free for any student who enrolls at least part-time and maintains a 2.5 grade point average. The plan would allow anyone admitted to a community college to attend without paying tuition, so long as they enroll in a program meeting certain basic requirements, and they remain on track to graduate in three years.Qualifying programs would be one of  two types: it would had credits that fully transfer to local public four-year colleges and universities or it would consist of training programs with high graduation rates that lead to in-demand degrees and certificates. All community college students, including those first entering community college or those going back to school, would be eligible for the program.

The White House estimates that approximately 9 million students would participate a year.

Any state participating would have to maintain funding for all higher education as well as pay 25% of the total cost. It is estimated the program could cost upwards of $15 billion per year. It is unclear how it would be paid for, but that information is expected to be made clear in the President’s Budget Request for FY16 on February 2.

Typically, the President would do these visits to promote new initiatives after the State of the Union and before the release of the President’s Budget Request. However, the President will be making a state visit to India after the State of the Union, and so promotion for big initiates is happening now in what the Administration is calling a Spoiler Alerts.

The President is expected to formally announce the America’a College Promise at 1 pm Eastern. In addition to Governor Haslam, the President will be joined by both of Tennessee’s Republican Senators, Bob Corker and Lamar Alexander. Senator Alexander is the Chairman of the Senate Health Education Labor and Pensions Committee.  Watch the announcement live here.

The Office of Federal Relations will continue to track and update information on this initiative as it becomes available.


FY15 Appropriations Released

Last night, House and Senate Appropriators unveiled a $1.1 trillion spending package that is a combination of all but one of the Fiscal Year 2015 (FY15) appropriations bills rolled into an omnibus for the remainder for FY15, plus a continuing resolution (CR) funding the Department of Homeland Security through February 2015. The FY15 appropriations package, dubbed the “Cromnibus,” would provide new funding for all government agencies and programs, except the Department of Homeland Security, and is designed to gain bipartisan support and avert both a government shut down or another continuing resolution, as was seen in FY 2014. The current CR runs through tomorrow (December 11, 2014). 

The deal is a victory for appropriators, who have insisted that spending caps set under the 2013 budget agreement would allow them to move most of the annual measures for FY15. The Homeland Security stopgap portion is an effort by Republicans leaders to force a showdown with the White House on immigration in the new Congress, when Republicans will control both chambers of Congress.

The Cromnibus will move as HR 83, a previously considered piece of energy legislation. By using a previously considered bill, House and Senate leadership is trying to overcome Senate procedural hurdles so that measure could be cleared as early as Friday. Regardless, with the current stopgap funding expiring on tomorrow, the House will likely pass a two- or three-day CR to guarantee there is no shutdown before the Senate takes action and sends the “cromnibus” to the President.

For domestic agencies, flat funding is the norm, with some spending tradeoffs made to build political support. For example, the bill’s education programs are almost level funded at $70.5 billion, only $100 million less than last year. Democrats, however, will be pleased with level funding of $8.5 billion for Head Start and $22.5 billion for Pell grants, an amount that would raise the maximum grant award by $100 to $5,830.

Overall, Appropriators said the entire Labor-HHS-Education section of the spending bill would contain $156.8 billion in discretionary money, roughly the same level enacted last year. The title is always among the most contentious of the annual spending bills because of the wide reach of the programs under its jurisdiction and has become even more of a lightning rod since passage of the health care overhaul in 2010.

Additionally, the bill would provide $100 million, a $1.6 million increase, for the Office of Civil Rights, which is responsible for investigating Title IX complaints of inappropriate campus response to sexual violence. Moreover, the Student Aid Administration received a $230 million increase from last year to $1.4 billion with part of that funding going to increased enforcement and data collection under the Clery Act. The Committee commended the Education Department for its emphasis on campus sexual assault prevention.

The Defense Department, however, would see its base budget rise $3.3 billion over current funding to $490.2 billion, an amount still $500 million less than what was requested by the Pentagon.

Of note in the Cromnibus:

  • National Institutes of Health received $30.1 billion, which is $150 million more than FY14.
  • National Science Foundation received $7.34 billion, which is $172.3 million above the 2014 enacted level. NSF’s MREFC received $200.8 million.
  • The Department of Education was cut by $166 million overall. Pell grants, however, received a net increase for ED of $137 million increasing the maximum award to $5,830. Federal Work Study received an increase of $15 million. The Student Aid Administration received an increase of $230.924 million. Race to the Top was eliminated.
  • National Aeronautics and Space Administration (NASA) received $18.01 billion for which is $363.7 million more than the 2014 enacted level.
  • National Oceanic and Atmospheric Administration (NOAA) received $5.4 billion, which is $126.4 million more than the 2014 enacted level.  Big winners at NOAA were Weather, which received $90.8M, which is $9.6M above the FY14 enacted level. Climate accounts remained relatively level with previous funding. Sea Grant received level funding of $62 million. NOAA Cooperative Labs and Institutes received $60 million, which is level funding. The bill provides $60 for Climate Competitive Research, Sustained Observations and Regional Information, the same as the FY14; $38M for Regional Climate Data and Information; $8.5M for Integrated Ocean Acidification, which is $1.5M above the FY14 enacted level; $41.3 for Sustained ocean observations and monitoring, which is comparable to the FY14 enacted level
  • National Weather Service operations received $954.2 million for, which is $526,000 above the 2014 enacted level.
  • The US Geological Survey received $5 million in additional funding Early Earthquake Warning funding on the Pacific Coast.
  • The Department of Defense’s S&T programs generally enjoyed increases in funding (6.1: $2.279 billion (+$112 million over FY14); 6.2: $4.605 billion (-$38 million below FY14);  6.3: $5.530 billion ($155 million above FY14)

The House is expected to pass the measure on Thursday and send to the Senate. The Senate is expected to pass it Thursday or Friday. The President is expected to sign it into law Friday.

Federal Relations will continue to update information on the Cromnibus as it move through the Congress and becomes law.