FEDERAL BUDGET STATUS AS OF MARCH 15, 2005

 

STUDENT FINANCIAL ASSISTANCE

The President�s proposed budget for 2006 totals $406.6 million in combined state formula-allocated education aid to Montana (this number includes all grade levels).� This number is up slightly from 2005, but the increase comes mainly from a projected increase in federal student loans of $14.3 million.� Excluding student loans, federal support is projected to actually decline in Montana by $1.36 million.� Some highs and lows for the state include:

  • An increase of $2.6 million in Pell grants (totaling $52.1 million)
  • No changes forecast for our Federal Supplemental Educational Opportunity Grants ($2.3 million) or Federal Work Study ($3.5 million)
  • The elimination of new funds for Perkins loans (last contribution was $461,000)
  • The elimination of� $180,000 in Leveraging Educational Assistance Partnership (LEAP).� This money is normally combined with our MHEG and MTAP programs to increase total need-based aid.
  • The elimination of money for GEAR UP.� If this occurs, no new grants would be awarded and our grant is currently up for renewal.
  • The elimination of money for Byrd Honors Scholarships.� Last year, we received in excess of $120,000.�

 

Reauthorization of the Higher Education Act also looms as a possibility for this year.� HR 507 is very similar to the bill introduced, but not acted upon last year.� A few highlights include:

  • Allows for year-round funding for Pell grants and additional aid to those students who complete a rigorous high school curriculum.
  • Reduces student loan origination fees.
  • Increases information to students and families and makes education more accessible to non-traditional students.
  • Makes consolidation loans variable.
  • Increases some loan limits.
  • Makes permanent some teacher loan forgiveness programs introduced last year.
  • Changes (reduces) funding for some guarantors and lenders.

 

CARL D. PERKINS FEDERAL GRANT

The President�s FY 06 budget calls for the elimination of the Perkins Vocational and Technical Education Act of 1998. �This occurs at the same time Perkins reauthorization legislation is being considered in both the House and the Senate.� On March 9, 2005, the House Committee on Education and Workforce passed H.R. 366 to reauthorize Perkins legislation.� On the same day, the Secretary of Education, Margaret Spellings, sent a strong letter to Representative John A. Boehner, Chairman of this same committee, in opposition to H.R. 366.� On March 10, 2005, the Senate passed S. 250 on a 99 to 0 vote to reauthorize Perkins.� These events demonstrate that the will of Congress to eliminate Perkins is questionable.��

 

Some of the key bills related to the reauthorization include: H.R. 366 and S. 250� which maintain current funding; H.R. 366 which reduces administration funds from 5% to 2%; and S. 250 which maintains 15% administration funds to be divided between administration and state leadership.

 

Both the House and the Senate have bills to reauthorize the Workforce Investment Act:� H.R. 27 �Job Training Improvement Act� and S. 9 �Lifetime of Education Opportunities Act of 2005.� Issues related to this legislation include:

�        Require a percentage of Perkins funding to be re-directed to support one-stop administration and management.� If Perkins administration funds were cut from 5% to 2%, this additional levy would further diminish the state�s ability to provide effective management of the grant

�        WIA Plus � US Department of Labor amendment to HR 27 to add Perkins to a list of programs governors could choose to block grant.� If Perkins remains, it is likely the administration will recommend it to be added to the list of programs that can be block granted under WIA

�        Community-Based Job Training Act would provide $250 million to two-year colleges on a competitive basis through US Department of Labor

 

HIGHER EDUCATION ACT (HEA)

Community College Access Grant program would provide $125 million for concurrent enrollment and articulation between two and four- year institutions

 

Note:� Both the Community-Based Job Training Act and the Community College Access Grant would replace Perkins at postsecondary level if Perkins were eliminated as requested in the President�s FY06 budget proposal.

 

UPWARD BOUND & TALENT SEARCH PROGRAMS

The Bush Administration budget targets 932 Upward Bound and 469 Talent Search programs for defunding at the end of the �05-�06 year.� Last year, Upward Bound and Talent Search placed 74,100 high school seniors into higher education nationally.� Each program serves students considered educationally disadvantaged by virtue of their parents� low income status, their potential for being a first generation college student, and/or veteran.�

 

Within Montana, defunding the programs would terminate 6 Classic Upward Bound projects, 1 Upward Bound Math and Science project, 1 Veteran�s Upward Bound project, and 3 Talent Search projects.� The total impact of defunding the Montana programs would lead to an estimated 700 seniors being denied pre-college services annually (out of the total 3,366 served by TS and UB). The programs have been successful in the state:

�  An average 84 percent of all 2004Upward Bound high school seniors statewide enrolled in postsecondary education this past fall semester.

�  An average 54 percent of all 2004 TS high school seniors statewide enrolled in postsecondary education this past fall semester or completed a GED.