Education Budget

On March 1, 2013, federal agencies were directed by the White House budget office to cut spending for the remainder of the 2013 fiscal year, through Sept. 30. The cuts, known as “sequestration” in Washington parlance, apply evenly to almost every program, so agencies do not have much leeway to protect certain programs at the cost of others. Now, two-and-a-half months later, the big question is how the cuts are affecting people on the ground. The answer: We have anecdotes, but no firm numbers.

Last week, the New America Foundation’s Education Policy Program published an issue brief on the recently completed (and two months late) fiscal year 2013 budget, with an early analysis of how the 2014 budget process is likely to affect education programs. One careful reader noticed that the explanation about sequestration failed to mention two lesser-known education programs: the TEACH Grants and Iraq-Afghanistan Service Grant programs.

The former provides tuition aid to prospective teachers, but it converts to a loan if the student fails to complete four years of teaching to high-needs students after graduation. The latter provides tuition aid to the children of military parents who died during military service after September 11. Both programs are affected by across-the-board spending cuts implemented last year.

Although sequestration was meant to apply uniformly to most education programs, slicing evenly program by program, there were some exceptions. Pell Grants, as we’ve reported, were exempt, and student loans were subject only to a fee increase to reduce costs. And it appears that cuts will be larger for TEACH Grant and the Iraq-Afghanistan Service Grant than for other programs.

How much larger will the cuts be?

Recall that in accordance with the Budget Control Act of 2011, the failure of an appointed “supercommittee” to find $1.5 trillion in deficit reduction over 10 years triggered the execution of across-the-board spending cuts in mid-fiscal year 2013. The final size of the cuts was 5.0 percent cut for education programs funded through appropriations, and 5.1 percent for those funded on the so-called mandatory side of the budget. (Both TEACH Grants and Iraq-Afghanistan Service Grants are considered mandatory funding.)

For the Iraq-Afghanistan Service Grant program, though, the reduction will be 10.0 percent. For the TEACH Grant, it will be 7.1 percent. Therefore, the maximum Iraq-Afghanistan Service Grant will drop from $5,645 (the program is meant to match the size of the maximum Pell Grant) to $5,081 next year. The maximum annual TEACH Grant drops from $4,000 to $3,716. Those reductions affect the first disbursement that occurs after March 1, 2013, which in most cases means the 2013-14 school year, and the reductions are effectively permanent, so they’ll remain at that lower level thereafter.

Why did sequestration impose larger reduction for these programs than for others? And why 10.0 percent for one and 7.1 percent for the other? The reasons remain unclear, and the U.S. Department of Education has not offered much explanation. Some media reports have suggested that the White House is working to limit the impact of sequestration by moving money around and restoring some funding under its budget authority – but thus far, there’s no word from the White House that such flexibility options were the case for these Department of Education programs. We’ll keep an eye out for a good explanation over the coming weeks and months.

And the confusion isn’t limited to these programs. The president’s fiscal year 2014 budget request, which usually includes spending levels for the prior two years, didn’t even incorporate final, post-sequester fiscal year 2013 spending into its budget tables, for the Department of Education or other agencies. So one thing is clear: The government still isn’t able to provide much evidence around sequestration’s implementation. In spite of anecdotal stories about children losing access to Head Start and special education and Title I services being cut across the country, there’s not yet a comprehensive understanding of how sequestration is affecting education programs.

For more on last year’s budget, check out our issue brief, Federal Education Budget Update: Fiscal Year 2013 Recap and Fiscal Year 2014 Early Analysis.

Today, the New America Foundation’s Federal Education Budget Project released Federal Education Budget Update: Fiscal Year 2013 Recap and Fiscal Year 2014 Early Analysis, an issue brief that explores the 2013 and 2014 budgeting processes and their implications for federal education programs. The brief outlines the key benchmarks Congress and the president reached, and provides a simple, comprehensive resource to understand the broader budget picture.

As the brief notes, the fiscal year 2013 budget is now complete, and the 2014 appropriations process is officially underway. But the complex circumstances of 2013 – including a temporary funding measure that Congress passed to hold funding steady at last year’s level (continuing resolution), and then an across-the-board 5.0 percent spending cut (sequestration) applied to most federal education programs – have made it challenging to track the vital figures in appropriations spending. That’s why many education stakeholders might be surprised to discover this: Next year’s budget could bring even more pain than sequestration has.

Sequestration was a product of the Budget Control Act of 2011 (BCA), a broader deficit reduction bill passed as a compromise to raise the federal debt ceiling. According to the law, when a congressionally appointed “supercommittee” of legislators couldn’t agree on $1.5 trillion in deficit reduction over 10 years, the BCA ensured most of that would happen anyway – through sequestration in 2013, and through lower spending caps from 2014 through 2021.

Sequestration was applied indiscriminately to virtually every program funded by the federal government – a poorly targeted, mid-year cut. However, the spending caps laid out by the BCA will force federal appropriations spending even lower next year than sequestration forced it this year. Instead of $984 billion in total appropriations spending, the post-sequestration total for 2013, the law caps appropriations at $966 billion next year.

Importantly, the spending cap for next year is only an aggregate one. Whereas the sequester in 2013 applied evenly to every program, the 2014 cap instead means that Congress will have to make difficult choices as it drafts spending bills. Lawmakers are supposed to appropriate not more than what the cap allows (though they may pass a law to override that limit) but within the broad category of discretionary spending, the law does not limit funding for any one program (think Head Start, Title I, and Pell Grants).

Some policymakers have opted not to make those hard decisions, at least so far. Both President Obama’s 2014 budget request and the budget resolution passed by the Democratic Senate for 2014 ignore the overall spending cap, and instead revert to the BCA spending caps set out before the supercommittee’s failure ($1.058 trillion in 2014). The House, meanwhile, stuck with the post-sequester cap in its own budget resolution.

Any joint budget resolution between the House and Senate is still a mystery; in fact, for the past several years, Congress has elected to stick with the BCA limits rather than pass a joint resolution at all. But if lawmakers vote to exceed the cap, they’ll also have to vote to override the BCA, because the BCA takes precedence over a non-binding budget resolution. If, on the other hand, lawmakers stick within the BCA limits, federal education programs will be fighting for a share of an even smaller pie than was provided in 2013.

Click here to read the full brief

State pre-K funding shrunk by over half a billion dollars from the 2010-11 to the 2011-12 school year. That was the largest one-year decrease in the last 10 years, leading the National Institute for Early Education Research (NIEER) to declare it the "worst year in a decade” for high-quality pre-K access across the United States.

The New America Foundation’s Education Policy Program released an issue brief detailing the completion of the fiscal year 2013 appropriations process and the start of 2014 budgeting. The brief explores congressional budget actions over the past year and describes their effects on federal education programs.

Correction: An earlier version of this post erroneously reported the total number of Head Start teachers with bachelor's degrees as 44 percent. Of the Head Start teachers subject to a 2007 requirement that half earn bachelor's degrees, 62 percent of Head Start teachers have bachelor's degrees as of 2013.

In addition to the president’s fiscal year 2014 budget request, released earlier this month, information on the administration’s education agenda can be gleaned from the new Congressional Justifications documents from the Departments of Education and Health & Human Services.

The Congressional Justifications typically contain details on the president’s latest proposals, but they also include a wealth of information about existing programs. According to the documents, Head Start and Early Head Start declined in enrollment between 2012 and 2013, before an across-the-board budgetary cut resulted in the elimination of seats in some centers around the country. Meanwhile, funding for each program increased slightly before the implementation of this year’s federal sequester.

Much of the discussion around the President’s 2014 education budget has centered on proposed initiatives for universal pre-K and a $1 billion Race to the Top competition for college affordability and completion.

Compared to these bold new proposals, K-12 education seems to have drawn the short straw. The U.S. Department of Education could see some new or expanded programming for K-12  – additional money for the Promise Neighborhoods program, a new competitive grant competition for high school redesign, and an expanded School Turnaround Grants program – but nothing like what it has outlined for very young and adult learners.

The lack of banner initiatives for K-12 belies the attention that the Department has paid to the issue of teacher professionalism and evaluation over the past year. In fact, the dearth of new proposals may actually underscore the importance of changes to a reintroduced $5 billion proposal to transform the teaching profession – a proposal that was fleshed out today as the Blueprint for RESPECT (Recognizing Education Success, Professional Excellence, and Collaborative Teaching).

We would be remiss not to mention that issues of teacher evaluation and accountability have stirred a lot of public attention this year. September’s Chicago teacher strike and a recent federal lawsuit by Florida teachers on use of student scores for untested subjects have made teacher evaluation and dismissal practices a subject of national debate. Bill Gates’ Washington Post op-ed earlier this month advocated for the use of multiple measures for evaluation (including student surveys and observations by veteran teachers), as well as policies that increase collaboration rather than competition amongst teachers. Accountability measures are here to stay, but  Gates argues that the focus should shift towards how to use them in a way that increases the number of effective teachers.

In last year’s budget, the administration proposed using $5 billion from the failed American Jobs Act for a competitive grant program to “reshape the teaching profession.” The initiative as originally conceived was accountability-heavy; it suggested that state or district reforms could include making teacher training programs “more selective and accountable” and “ensuring that compensation is tied to performance.” Other possibilities included reforming tenure to “raise the bar, protect good teachers, and promote accountability” and strengthening teacher autonomy “in exchange for greater accountability.”

While not enacted, the American Jobs Act proposal did launch the RESPECT project, the Department’s attempt to engage in a national conversation on the teaching profession. This project facilitated conversations on the teaching profession across the nation and provided districts and teachers with a way of submitting feedback to the Department. Over the last two years, the Department has held 360 roundtables with 5,700 educators and solicited feedback from national teacher organizations, like the National Education Association.

Given the administration’s focus on effective teaching and school leadership, we weren’t surprised when this part of the American Jobs Act initiative returned in the 2014 budget request as $5 billion in mandatory funding to underwrite the RESPECT Project. But we were surprised by some changes to the proposal. Perhaps as a result of the conversations started by its namesake, the language used in the current budget proposal is strikingly transformed from the 2013 request.

After a year of conversations with teachers, the Department is now thinking – or at least speaking – differently. See for yourself below: “accountability” and “tenure” have been replaced, literally, by “shared leadership and responsibility for student outcomes.” Compensation system reforms are now designed to “attract and retain top talent.” Reforms could include creating “conditions in schools that support effective teaching, including by providing teachers greater autonomy… and time for collaboration.”

The system reforms envisioned in the two versions of the proposal are largely the same, but the 2014 RESPECT version is couched in the language of talent development and teacher support, rather than accountability and consequences. Those in the Department may have recognized that implementing evaluation systems doesn’t have to mean identifying winners and losers in teaching careers. Rather, these new systems can spur the development of a profession that relies on collaboration, data, and talent development to increase student achievement.

The strong shift in budget justification language, in addition to the release of the Blueprint today, signal a credible change in the way that the Department is addressing the issue of teacher quality and retention. Regardless of whether the RESPECT project is funded, it will be fascinating to see how this new direction influences other competitive grant programs, like the Teacher Incentive Fund, and whether it can ultimately facilitate changes to strengthen the teacher profession.

Alan Simpson and Erskine Bowles, of the famed Simpson-Bowles commission (officially the National Commission on Fiscal Responsibility and Reform) that the Obama administration tapped to generate ideas to reduce federal budget deficits, are out with a new wide-ranging proposal. Titled A Bipartisan Path Forward to Securing America’s Future, the report was published by the Moment of Truth Project, which is itself affiliated with the Committee for a Responsible Federal Budget, an organization previously housed at New America.

The report includes higher education reforms that they say will create $35 billion in savings through 2023. These reforms mirror some of the ideas outlined earlier this year in the Education Policy Program’s report, Rebalancing Resources and Incentives in Federal Student Aid. Unlike the latest Moment of Truth Project report, though, the New America Foundation report argues that the savings these proposals generate should be reinvested fully in more effective and higher-quality postsecondary education aid. (The Path Forward proposal reinvests most, but not all of the savings into higher education aid.)

One way that Path Forward finds big savings is through eliminating the in-school interest rate subsidy, which defers accrued interest on the borrowers loans until after graduation. This is basically identical to New America’s proposal to eliminate Subsidized Stafford loans.

According to the Moment of Truth Project report, the subsidy is poorly targeted and that money can be better spent by funding the Pell Grant program. The authors argue that income-based repayment is a far better benefit to struggling borrowers, something we made the case for in Rebalancing Resources and Incentives. The deficit reduction report writes:

Another $15 to $20 billion could be generated through a number of more targeted changes such as adopting the President's proposal to reform Perkins loans, lowering Guaranty Agency Compensation Rehabilitation loans, repealing Grad PLUS loans, equalizing loans for dependent and independent students, creating a two-tiered income-based repayment system, and reducing or discontinuing funding for underperforming for-profit schools.

The authors go on to note that such reforms would fix the Pell Grant funding cliff, something we also accomplished in the Education Policy Program report. The authors further note that "by providing mandatory funding to cover much of the projected shortfall in the Pell Grant program, this option would limit the pressure on the Appropriations Committee" to make deep cuts in discretionary programs or to decrease the benefits Pell provides. In 2014, Congress was pleasantly surprised by a Congressional Budget Office estimate that showed a surplus had accumulated in the program over the past several years, permitting lawmakers to flat-fund the program at 2013 pre-sequester levels. Still, costs of the Pell program are expected to increase rapidly over the next several years, demanding a long-term solution.

The report also endorses a proposal first offered by the Education Policy Program’s Jason Delisle. Recently highlighted both in President Obama's fiscal year 2014 budget proposal and in a bill proposed by Republican Senators Coburn, Burr, and Alexander, the plan would interest rates on federal student loans to the rate of 10-year Treasury notes, plus a mark-up. As the commission notes, this addresses the interest rate problem more gradually than a bump from 3.4 percent to 6.8 percent – and it would permanently resolve the annual debate over setting the rates by creating a long-term policy subject to the market, not lawmakers’ whims and political interests.

In the Education Policy Program paper Rebalancing Resources and Incentives in Federal Student Aid, we recommend nearly all of these fixes as part of a larger reform to make federal student aid more equitable and rational. And we did this in a budget-neutral way – that is, we used savings found in some programs to increase funding for other programs, or to create completely new ones. While the new Simpson-Bowles report would use some of the savings to fund the looming Pell Grant program shortfall, the authors would also redirect a portion of the savings to deficit reduction.

Our proposal included a broad array of reform proposals, covering loans, grants, tax expenditures, transparency, and other federal aid issues, and it is meant to be seen as an entire package, not a menu of options, because each component of aid affects the others. We stand by that belief, but we are pleased to see other groups arrive at the same conclusions that we did in reforming the federal student aid system: Policymakers can better spend the significant resources they have already committed to federal student aid programs to benefit students, taxpayers, and other education stakeholders.

Although the deadline for all students to achieve proficiency in math and reading has been lifted in most states by No Child Left Behind (NCLB) waivers, 2014 test anxiety is high as ever. That’s because the 2014-15 school year is the first time 45 states and Washington, D.C. will be fully implementing the Common Core State Standards – including new tests that will be used as part of high-stakes accountability systems for schools and, in many cases, teachers and students. But when the time comes, will states stay the course? Practical concerns along with escalating political arguments already threaten the emerging system of common standards and assessments.

As I wrote previously, Alabama became the first state to exit the Common Core test consortia, opting instead to administer ACT-based assessments. By 2014, Alabama will likely not be alone in its choice. ACT is a well-established player that has spent decades building an organization with a reputation for providing valid, reliable assessments. Conversely, the state consortia are upstarts, attempting to build next-generation assessments and a precarious, multi-state structure to support and sustain the effort simultaneously. Naturally, states are left with many unanswered questions. How much will the new tests costs, and what are the technical requirements? Will the tests accurately reflect a student’s readiness? And will the assessments even be completed on time? In his smart take on the issue, Bellwether Education Partner’s Andy Smarick writes, the ACT “is the ‘Plan B’ that many states – concerned about the reliability and cost of the consortia-developed tests – have been looking for. It enables a state to remain committed to tough standards and rigorous assessments without putting all of their eggs in the basket of a fragile multi-state entity.”

But this kind of pragmatic concern isn’t the only threat to the common standards. While the Common Core is a state-led initiative (I repeat, the Common Core is a state-led initiative), the effort has been supported by private and corporate philanthropy and by the federal government. Specifically, the requirement to adopt the common standards to compete for Race to the Top funding is at the heart of increasingly polarized and politicized arguments against the Common Core. In their words, “Obamacore” amounts to a “nationalized curriculum” and “leftist indoctrination” that has been “forced on state governments” and “imposed on the children of this nation.”

Reasonable individuals easily dismiss most of these arguments. But reasonable arguments are often overshadowed, especially when national politicians and parties start getting involved. Just last week, the Republican National Committee adopted an anti-Common Core resolution, echoing these same divisive arguments.  And President Obama frequently touts that his administration “convinced almost every state to develop smarter curricula and higher standards, all for about 1 percent of what we spend on education each year” – adding credibility to their claims.

The problem may be about to get worse. As noted in our Key Questions on the Obama Administration’s 2014 Education Budget Request, federal funding for the assessment consortia is set to expire before the tests are fully launched. To provide continued support, President Obama’s latest budget includes a $9 million competitive grant initiative that could finance some of their ongoing work. The other $380 million of the “Assessing Achievement” program would provide states with formula grants for their current assessment programs, although leftover funds could go toward Common Core implementation.

However, a significant change would occur in fiscal year 2015: Assessing Achievement formula funding would be available “only to States that have adopted college- and career-ready standards that are common to a significant number of States” (emphasis added). While Race to the Top included a similar requirement, that program was a competition, where states could opt-out. NCLB waivers also require states to adopt college- and career-ready standards, but they do not have to be common ones. The Assessing Achievement program would mark the first time federal formula funding – typically available to all states – required adoption of common standards. If enacted, this requirement will undoubtedly add fuel to the “Obamacore” fire. On the heels of the president’s budget request, Sen. Chuck Grassley (R-Ia) is calling for the federal government to eliminate all Department of Education funding that supports or prioritizes the Common Core – and he doesn’t even mention the Assessing Achievement program.

What can we make of these threats to the Common Core? To date, most of its political detractors have been contained outside of the mainstream and have had little success gaining traction or passing legislation to reverse Common Core adoption. Will the RNC resolution, Grassley’s letter, or potential changes in federal funding have a greater impact?

On the other hand, the pragmatic concerns about how the new standards and assessments will be implemented are just that – pragmatic. Few could fault Alabama’s decision to choose the ACT over PARCC and SmarterBalanced. All three of the developing testing systems could prove to be a great improvement over current assessments, measuring competencies better aligned to postsecondary work and providing more useful information to students, their teachers, parents, and policymakers.

The important difference between the practical and political critiques is that states deciding to use the ACT system are not necessarily backing away from their commitment to the Common Core altogether. Yes, the assessment consortia should do as much as possible to allay the concerns of wavering states. And yes, policymakers and stakeholders should closely monitor all of the emerging for-profit and non-profit ventures to ensure their assessments, curricula, textbooks, and other resources accurately reflect the new standards. But in the end, any damage done to the Common Core from these pragmatic objections to the consortia is far less severe than what would happen in the unlikely, but not out of the question, case that “Obamacore” goes mainstream. Common Core supporters would do well to distinguish between the two. 

While poring over the president’s fiscal year 2014 budget request, we noticed several subtle, but critical, shifts in the way that the administration addresses teacher preparation grants and regulations.

Just as in the fiscal year 2013 budget request, the administration is proposing to phase out the current TEACH Grants program in favor of a $190 million Presidential Teaching Fellows program. What follows is our attempt to read the tea leaves in the U.S. Department of Education’s proposed budget.

TEACH grants, started in 2008, provide $4,000 a year to eligible undergraduate or graduate students who agree to teach a high-needs subject in a high-needs school for at least four years within the first eight years after they graduate. In the 2013 budget, the Department projected that a large number of grant recipients – perhaps as high as 75% – will not fulfill the service requirement and instead will see the grants converted to Unsubsidized Stafford loans. The 2014 budget justification does not cite this figure, indicating only that a “significant” number of recipients will not fulfill the requirements, and that the Department anticipates about $17 million in revenues from converted grants.

In last year’s Presidential Teaching Fellows proposal, the administration would have provided formula grants to states to improve teacher preparation program performance and finance scholarships of up to $10,000 for students in the last year of an effective education program. Scholarship recipients would commit to teaching a high-needs subject in a high-needs school for at least three years out of six following graduation.

This year’s budget request includes the same framework for granting scholarships, but the provisions for improving teacher preparation programs have been softened. Previously, the Department would have required states to “withdraw approval of programs persistently identified as low-performing,” noting that 38 states and D.C. have not yet identified any low-performing or at-risk teacher training programs. Programs would be given technical assistance to improve before having their approval revoked after a given number of years.

Now, funding is contingent on states’ willingness to “hold teacher preparation programs accountable for results, including withdrawal of approval for programs persistently identified as low-performing” – a subtle difference, but an important one. Rather than revoking approval, states would be required to “establish and enforce a timeline for withdrawing financial support” from schools and alternative preparation programs that have received technical assistance but have not improved in a given number of years. And rather than focus on the closure of schools that produce ineffective teachers, the 2014 budget proposal also has new language that encourages states to “facilitate the broad adoption of practices employed by [high-quality] programs” to broaden the share of teachers prepared using high-performing methods.

This language shift may be the result of the stream of conversations around teacher preparation program accountability that occurred after the last budget release. At the end of February in 2012, ED released a draft set of federal regulations to join the TEACH grant eligibility to teacher preparation reporting under Title II of the Higher Education Act. Submitted for consideration under a negotiated rulemaking process, the regulations would have classified teacher-prep programs in four categories – high-performing, satisfactory, low-performing, or at-risk – based on new indicators including student learning outcomes, employment levels, and satisfaction surveys from recent graduates and schools that hire them. Students attending schools rated in the bottom two categories would not be eligible for federally-funded TEACH grants.

The negotiated rulemaking process fizzled out without a consensus  in April, so ED has been left to write regulations governing teacher preparation programs and TEACH grants on its own. These new rules were initially expected by last fall but thus far are still in progress. In the wake of this slow-down, those on the inside are not optimistic that significant regulations will move forward this year.

Nonetheless, in February the Council for Accreditation of Educator Preparation (CAEP) released a draft set of accreditation standards for teacher preparation schools that provides for increased use of outcome-based measures. The standards have spurred feedback, particularly from the American Association of Colleges for Teacher Education (AACTE), which objects to the creation of a “gold standard” designation for top programs and provisions for the use and interpretation of outcome data.

It remains to be seen whether the revised language in the 2014 budget will move the conversation around teacher preparation towards a feasible outcome for all stakeholders. In the meantime, a few states, including Louisiana and Tennessee, have already implemented systems for tracking student outcomes for graduates of teacher preparation programs. Furthermore, the National Council on Teacher Quality (NCTQ) has partnered with U.S. News & World Report to release a ranking of quality of teacher training programs in 2013. Even if the Department ends up dragging its feet, it’s clear that the push to hold teacher preparation programs accountable for their graduates’ achievements will go on.