Obama's 2016 Education Budget Request Focuses on College Costs

President Obama on Monday unveiled his $4.066 trillion budget for the 2016 fiscal year, reflecting Democratic priorities on spending and taxes.

The budget blueprint for higher education focuses on increasing affordability through a combination of tax breaks and subsidies to make the cost of college less of a barrier to attending. The plan fleshes out earlier proposals to make community college free for millions of students, ensure that the maximum Pell Grant award keeps pace with inflation, and extend the income-based loan repayment option Pay As You Earn to all student borrowers.

The president's budget provides new details on its $60.3 billion plan for tuition-free community college, Inside Higher Ed reported. The program would be available for students who maintain a 2.5 GPA and have adjusted gross incomes below $200,000. The matching grants in the program would be doled out to participating states based, in part, on enrollment levels and graduation and transfer rates.

The budget plan calls for an increase in spending on Pell Grants that would allow the maximum award to increase to $5,915 for the 2016-17 academic year. The maximum grant for the upcoming year is $5,775. The administration also wants to see several changes to Pell Grants, including more stringent requirements on the academic progress of recipients as well as limits on Pell money that goes to students who repeatedly enroll in programs without earning any academic credits.

The administration also calls on Congress to streamline and scale back some of the benefits associated with federal income-based repayment programs. The changes would result in $14.6 billion in savings over the next 10 years that the administration is proposing be redirected to the Pell Grant program.

The budget blueprint would simplify and expand the nation's higher education tax credits. The White House says the moves would cut taxes for 8.5 million families, simplify taxes for the more than 25 million families and students who claim education tax benefits and provide students working toward a college degree with a benefit of up to $2,500 a year for five years.

The proposed budget would also simplify the Free Application for Federal Student Aid, stripping more than two dozen questions from the form, including ones related to assets and untaxed income.

In a more unexpected move, the budget plan includes a proposal to count military aid in the federal share of the 90/10 rule, which requires for-profit colleges to receive at least 10 percent of their revenue from nonfederal sources to be eligible to receive federal student aid. The idea has been embraced by some Democratic lawmakers, but it too is unlikely to advance in a Republican-controlled Congress, according to The Chronicle of Higher Education.

In a conference call with reporters on Monday, Secretary of Education Arne Duncan argued that the president's plan would help more students graduate from college, reducing income inequality and strengthening the economy.

The president's budget faces an uphill climb in Congress, though, reported the Chronicle. Republican leaders have already dismissed Obama's community college and tax reform plans as too costly. Even before the budget was released, lawmakers from both parties forced the president to jettison his plan to raise revenue by taxing withdrawals from 529 college-savings plans.

 

Related Links

President Obama's 2016 Budget – U.S. Education Department Fact Sheet

http://www2.ed.gov/about/overview/budget/budget16/budget-factsheet.pdf

Inside Higher Ed

https://www.insidehighered.com/news/2015/02/03/obama-seeks-boost-higher-education-spending-and-proposes-some-loan-reforms-have

The Chronicle of Higher Education

http://chronicle.com/article/Obamas-2016-Budget-a-Focus/151601