Obama Administration Releases 2014 Budget Proposal
April 11, 2013
The Obama administration released its blueprint for the 2014 fiscal year budget on Wednesday.
The proposal would invest $71 billion in discretionary funding for the U.S. Department of Education, a 4.5 percent increase over the FY 2013 pre-sequester level.
The 2014 budget would fully fund the Pell Grant program for the 2013-14 academic year and increase the maximum award from $5,645 to $5,785 in 2014-15. It would expand access to the work-study program and make permanent the American Opportunity Tax Credit.
The president’s proposal would bolster the popular Income-Based Repayment (IBR) option to ensure that loan repayments for all student borrowers do not exceed 10 percent of their discretionary income. In addition, the proposal would lower the payment cap on federal student loans and prevent the taxation of debt forgiven through program.
The administration would prevent the scheduled increase of interest rates on subsidized student loans, from 3.4 to 6.8 percent. Under the proposed plan, interest rates would be linked to market rates moving forward. Rates on newly-issued federal student loans would be based on the U.S. Treasury 10-year borrowing rate in the year the loan is issued plus a fixed margin depending on the type of loan.
Obama’s budget would also provide $1 billion for a new Race to the Top ” College Affordability and Completion competition tied to state higher education policies and practices and $260 million for a First in the World fund that would make competitive awards in an attempt to encourage innovations to boost post-secondary attainment rates and decrease costs.
The House and Senate already have approved their own separate budget resolutions and appropriators have scheduled oversight hearings aimed at setting allocations to federal agencies. The late release of the budget means the plan is unlikely to have much impact on the work already underway in Congress unless Obama and Republican leaders can strike a larger deal that encompasses taxes and spending, reports CQ.
Related Links:
President Obama’s 2014 Budget Proposal for Education
CQ
https://www.cq.com/doc/news-4252257
Inside Higher Ed
Inside Higher Ed
Michelle Cormier Mott
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