President's Budget: Higher Ed Implications

Noah Sudow

President Obama released his proposed budget today, which included numerous interesting things on the higher ed front.„ While it's unsure how viable this budget is, given that both chambers of Congress are controlled by the opposing political party and the President is entering lame duck season, it is interesting to note that there are a few proposals that build off issues important to the Republican education leaders.

Here's a quick rundown of highlights of the President's budget related to higher ed affordability:


First - the things that Congress may see some merit in (or not completely disagree with):

  • Simplify the FAFSA- this is a main tenant of the House HEA reauthorization proposal and also similar to the separate bill that Senator Alexander has proposed.„Ι Like that bill, the President is proposing tying the Federal Student Aid to information in federal tax returns.„ However- the President isn't going as far as the Senate bill, proposing to cut it by only 30 questions (roughly a third of the current FAFSA), whereas Alexander would have only a postcard FAFSA.
  • Fully fund Pell grants and continue to increase it based on inflation.
  • Creating a simple and better income-driven loan repayment program.„ The President proposes making the PAYE initiative the only repayment program.„ While Congress may disagree on this program of choice, they will agree on only having one income-based repayment system and simplifying student aid wherever possible.
  • Simplifying and expanding the college tax benefits for higher ed- While Congress isn't likely to expand the tax benefits (or anything that would require an increase in revenue), again the Republicans have been interested in simplifying higher ed tax benefits and introduced bills in the past related to this.


Second, here are the new programs for affordability that may not be too welcome in Congress:

  • America's College Promise- the President proposed funding the new free community college program in year one at $1.3 billion, but has a 10 year price tag of $60.3 billion.
  • The College Opportunity and Graduation Bonus: A new program to give colleges and universities a bonus for graduating Pell grant recipients on time.„Ι The President is proposing $647m this year and $7 billion total over the next 10 years.„ While it's an interesting concept- not sure Congress will be supportive of a new program.