House GOP FY2012 Budget Proposal Would Reduce Pell Grant to Pre-Stimulus Levels
House Budget Committee Chairman Paul Ryan (R-Wis.) released a fiscal year (FY) 2012 budget proposal -- known as a budget resolution -- Tuesday that would reduce Pell Grant award levels to pre-stimulus levels as part of an effort to reduce the deficit by $1.65 trillion over a period of ten years.
"The President’s budget recognizes that Pell spending is on an unsustainable path and recommends a few reforms to start to get control of the program’s costs," Ryan’s proposal states. "This budget takes the necessary next steps to ensure Pell spending is brought under control and targeted to the truly needy instead of being captured in the form of tuition increases. Recent studies have demonstrated that increases in Pell grants appear to be matched nearly one for one by increases in tuition at private universities."
The House Republican FY2012 proposed budget resolution is unlikely to gain enough support to pass in the Democrat-controlled Senate, and some Republicans have indicated that such cuts are perhaps too deep. The budget resolution sets self-imposed and non-binding spending levels for Congress, meaning that Congress is under no requirement to abide by its parameters.
The House Republican budget would achieve savings by making major cuts to non-security discretionary spending. Programs funded by discretionary spending levels are subject to the annual appropriations process and generally see changes in operating budgets from year to year. Republicans have also called for cuts in mandatory spending, or spending mandated by law and dictated by the number of eligible participants.
The Pell Grant program pulls funding from both mandatory and discretionary spending. Recent stimulus legislation has effectively increased the baseline for award levels by increasing the discretionary base maximum and designating specified mandatory-based annual increases. The Republican budget would return the Pell, now at a $5,500 maximum award level, to its pre-stimulus level.
Ryan cites 2005 research that explores whether increases in the Pell Grant award prompt increases in tuition rates at universities. The research found little evidence of such a correlation for in-state tuition at public universities, but did find a correlation at private institutions and in out-of-state tuition for public universities.
Rep. Ryan’s proposal also calls for more oversight in the Pell Grant program and seeks to impose new regulations and consolidation in job-training programs.
"This budget advances improved oversight and accountability for all job-training programs and the Pell program by tracking the type of training provided, the cost per student, employment after training, and whether or not trainees are working in the field for which they were trained," the proposal states. "These programs should also track beneficiaries’ participation levels in federal support programs (e.g. welfare and [the Supplemental Nutrition Assistance Program] SNAP) before and up to five years after training to determine if the training led to self-sufficiency."
The Department of Education has already taken up efforts to more closely monitor for-profit, distance learning and nondegree programs. The partial final rules on gainful employment published on Oct. 29 would significantly alter the rules affecting the addition of new programs and impose new reporting and disclosure requirements. These modifications and new provisions are applicable to all schools that offer any nondegree programs of study, the eligibility of which would connote Gainful Employment. All nondegree programs regardless of school type or educational level are subject to the partial Gainful Employment requirements that become effective July 1. In addition, almost all degree programs at for-profit schools are also subject to gainful employment caveats.
Rep. Ryan’s proposal also addresses consolidation of job training programs that could have implications for the Perkins Career and Technical Education (CTE) program.
"This budget advances reforms to increase job-training outcomes across the board. It improves accountability by calling for the consolidation of duplicative federal job-training programs into more accountable, targeted career scholarship programs," the proposal states.