The House Budget Committee has approved its fiscal year (FY) 2013 budget resolution and it is headed to the floor this week. The budget resolution sets broad overall spending policy, based on a variety of program assumptions. The Senate leadership has already announced that it is not planning to pass a budget resolution this year, making the House legislation more a statement of policy than a realistic legislative vehicle. However, the resolution will guide a variety of spending decisions to be made by the House majority, potentially setting the stage for a high-profile, high-stakes conflict with the Senate later this year, likely after the elections.
The House resolution cuts non-defense discretionary spending by more than $1 trillion over 10 years below the Budget Control Act (BCA) spending caps agreed to last summer. This category of spending encompasses virtually all the programs of interest to community colleges and their students. The budget calls for a $19 billion reduction in discretionary funding in FY 2013 (roughly a 2% cut), as well as reducing individual and corporate tax rates, increasing defense spending, and restructuring a number of the large entitlement programs, including Medicare and Medicaid.
Now that the House Budget Committee has approved its bill, a number of disturbing details are emerging. According to H. Rept. 112-421, funding for higher education programs would be reduced sharply. Key changes include the elimination of
- In-school interest subsidies for undergraduate students.
- Student aid eligibility expansions made by the College Cost Reduction and Access Act of 2007 (CCRAA), including the automatic zero EFC and income protection allowance increases (IPA).
- Pell Grant eligibility for less-than half-time students.
- Automatic increases in the Pell Grant maximum above $5,550.
- All mandatory funding for the Pell Grant program (currently estimated at $105.8 billion from SAFRA, BCA and prior year appropriations bills).
- Administrative fees for the Pell Grant and campus-based aid programs.
- Mandatory funding for the College Access Challenge Grants ($150 million in FY 2013).
The bill also would
- Impose an undefined maximum income for Pell Grant eligibility.
- Allow the interest rate on subsidized Stafford loans to double on July 1, from 3.4% to 6.8 % (bills have been introduced to prevent this from happening).
- Eliminate funding for the TAACCCT grants ($500 million each in FYs 2013 and 2014).
These cuts to education and job training programs would be in addition to the 8% to 9% cut that is already scheduled to go into effect as a result of the 2011 sequestration agreement. AACC is particularly disappointed to see that the Community College and Career Training Grant program has been targeted for elimination.
Again, because of the nature of the budget process, and the budget resolution itself, it is important to understand that the House legislation would not necessarily entail or produce any of the cuts described above. However, it is an extremely disappointing statement about the priority of programs of central interest to community colleges.
Laurie Quarles, Legislative Associate