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 Congress Wraps Up FY 2012 Funding Package 


Congress has approved final FY 2012 appropriations legislation, a nine-bill “megabus” that provides $915 billion to fund education, workforce training, and many other community college priorities. The House–Senate compromise legislation was developed largely behind the scenes and entailed major concessions from all sides.

Negotiators rejected many of the deep cuts proposed by House Republicans in their draft DOL–HHS–ED legislation, but some of their Pell Grant eligibility cuts were included in the legislation. To offset the $1.3 billion Pell Grant shortfall while preserving the current $5,550 maximum, which was a top AACC priority, the bill will temporarily eliminate interest subsidies during the 6-month grace period on undergraduate student loans. New students entering college after July 1, 2012, who lack a high school diploma or GED, so-called ability-to-benefit (ATB) students, will no longer be eligible for any federal student aid. It is estimated that approximately 1% of community college students are ATB students. Current ATB students will still be able to access student aid.

Additionally, the bill will limit students to 12 full-time equivalent semesters of Pell eligibility in contrast to the current 18 semesters. Also, the calculation for the minimum Pell award was altered, eliminating grants for anyone who qualifies for less than 10% of the maximum award. The legislation will also reduce the family income level at which a student would automatically receive a zero expected family contribution, from $30,000 to $23,000.

According to the Congressional Budget Office, these changes in Pell eligibility are projected to save approximately $11 billion over 10 years. Despite their extent, it is quite possible that deeper cuts will be considered in the coming years, as Congress reckons with explosive program growth at a time of significant budget constraints.

All ED programs other than Pell Grants will be subject to an across-the-board cut of 0.189%. Most of the federal student aid programs were level-funded (prior to the imposition of the across-the-board cut), but TRIO received a slight increase from last year’s funding level, from $827 million to $840 million.

Funding for minority-serving institutions, another AACC priority, was largely restored from the drastic cuts proposed in the House draft bill. The megabus provides Title III program funding as follows:

  • Strengthening Institutions: $80.6 million.
  • Tribally controlled institutions: $25.7 million.
  • Alaska Native and Native Hawaiian-serving institutions: $12.8 million.
  • Historically Black colleges and universities: $227.9 million.
  • Predominantly Black institutions: $9.2 million.
  • Asian American and Native American Pacific Islander-serving institutions: $3.1 million.
  • Native American-serving nontribal nstitutions: $3.1 million.

The Developing Hispanic-Serving Institutions (Title V) program will receive $100.4 million in FY 2012. These totals all represent small decreases from FY 2011 funding levels.

Similarly, funding for Perkins Career and Technical Education state grants was level-funded (prior to the 0.189% across-the-board cut), an accomplishment given that the administration proposed an 11% reduction and that tech prep funds were eliminated in FY 2011. Funding for job training programs under the DOL’s Employment Training Administration was cut dramatically in the House bill, but the final bill was kinder to these programs, although it still cut overall funding for Training and Employment Services by $149 million (4.5%). The bulk of this cut came from the dislocated worker funding stream and the Workforce Innovation Fund. Training for veterans remains a priority, and Congress approved $265 million for the Veterans Administration for Employment and Training Services, an increase of $9.3 million.

Although no one in Washington particularly wants to contemplate the prospect, the next budget cycle begins soon enough, with the scheduled release of President Obama’s FY 2013 budget on February 6.

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