On Wednesday, President Obama signed the final version of the $410 billion 2009 Fiscal Year omnibus budget bill. The bill bundles together nine spending bills to fund every cabinet department for the remaining six months of the 2009 fiscal year except Defense, Homeland Security and Veterans Affairs, which were passed last fall. The bill includes some increases for student aid programs, including the Pell Grant program.

The bill also included some $5.5 to $7.7 billion for earmarks, which Obama criticized when he signed the bill. He said that earmarks need not be inherently evil if they are simply transparent requests for help in areas of legitimate need.

To ensure this moving forward, Obama set the following reforms:

• Earmarks must have a legitimate and worthy public purpose - if the administration evaluates an earmark and determines that it has no legitimate public purpose, then we will seek to eliminate it, and we'll work with Congress to do so.
• Earmarks that members do seek must be aired on those members' Web sites in advance, so the public and the press can examine them and judge their merits for themselves.
• Each earmark must be open to scrutiny at public hearings, where members will have to justify their expense to the taxpayer.
• Any earmark for a for-profit private company should be subject to the same competitive bidding requirements as other federal contracts.
• An earmark must never be traded for political favors.

"In my discussions with Congress, we have talked about the need for further reforms to ensure that the budget process inspires trust and confidence instead of cynicism," Obama said. "So I believe as we move forward, we can come together around principles that prevent the abuse of earmarks."

What's in the FY09 Omnibus Bill

Federal Pell Grants
The bill includes nearly $17.3 billion for Pell Grants. The funding provided in this bill, combined with funding in the recently enacted economic stimulus package, will provide a maximum Pell Grant of $4,860 for the 2009-10 award year. As a result of the CCRAA, Pell Grant funding now comes from two sources - regular appropriations bills (discretionary funding) that provide for a maximum grant and an automatic add-on (through mandatory funding) that boosts the final maximum award. For the next two award years there is a third factor in determining the Pell Grant maximum award - money provided by the recently-passed Stimulus bill. For the 2009-10 award year, the maximum award will be $5,350 when you combine funding from all three sources.

How is that determined? First, the Omnibus Appropriations bill that the House will take up this week provides for a $119 increase in the maximum award to bring the 2008-09 maximum to $4,360; this is the appropriated amount. Next, the automatic CCRAA add-on is $490, bringing the maximum award to $4,850. Then, the latest wrinkle is added in--i.e., the $500 increase provided by the Stimulus bill--bringing the grand total is $5,350.

ACG and SMART Grants
The bill defers $887 million from unobligated balances under the Academic Competitiveness and SMART grant programs. These funds are not needed to pay ACG and SMART Grant awards in the 2009-10 award year and will be used to offset additional costs in the Pell Grant program.

FSEOG, Perkins, LEAP, and Other Aid
The bill would provide $1.9 billion for federal student aid programs including Federal Supplemental Educational Opportunity Grants (FSEOG), Perkins Loans, and the Leveraging Educational Assistance Partnerships (LEAP) programs. The bill provides funding at FY 2008 levels (no increases or cuts) for:

• FSEOG ($757.465 M)
• Perkins Loans FCC ($0 Note: there has not been new FCC funds for several years now)
• LEAP ($63.852 M)

The bill provides increased funding for the following programs:

• Perkins Loan Cancellations is increased $2.837 M to $67.164 M for FY 2009
• Javits Fellowships is increased $157,000 to $9.687 M for FY 2009
• Graduate Assistance in Areas of National Need (GANN) is increased $1.488 M to $31.030 M for FY 2009
• Byrd Honors Scholarships is increased $358,000 to $40.642 M for FY 2009;
• Child Care Access Means Parents In School is increased $500,000 to $16.034 M for FY 2009
• Thurgood Marshall Legal Education Opportunities is increased $105,000 to $3 M for FY 2009

Federal Work Study
The Stimulus bill provides an increase in the FWS program next year of $200 million bringing the total to $1,180.492 M. The bill directs the Department to provide the same funding in FY 2009 for the Work Colleges program from the Federal Work-Study Program's funding.

TRIO and GEAR UP
The bill provides small increases for the TRIO and GEAR UP programs.

• TRIO is increased $19.911 M to $848.089 M for FY 2009
• GEAR UP is increased $9.789 M to $313.212 M for FY 2009

Posted 03/13/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.