Budget Deal That Averted a Federal Shutdown Largely Spares Education, Obama Says

April 10, 2011

With only an hour to spare, lawmakers reached agreement late Friday on a plan to finance the federal government for the remainder of the fiscal year, which ends September 30.

The deal, which would cut $38.5-billion from the previous year's budget, would avert a government shutdown that would have occurred at midnight on Friday if the parties had failed to reach agreement. The government has been operating at fiscal 2010 levels for six months, under a series of short-term spending bills passed by Congress.

Details of the spending bill are still being negotiated, so it remains unclear how education and research programs will fare in the compromise. But President Obama said in a speech Friday that the bill largely spares his top priorities, including education and medical research.

"We protected the investments we need to win the future," he said.

According to the White House blog, the bill would maintain the Pell Grant maximum at $5,550, the same level as this year, and make "strong investments" in the National Institute of Standards and Technology, National Science Foundation, and the Energy Department's Office of Science, "even though we will no longer double the funding of key research and development agencies."

By maintaining Pell at a $5,550 maximum, the bill ensures that colleges won't have to backtrack on their financial-aid offers to families for the coming academic year.

"The budget deal finalizes financial-aid packages, allowing millions of families to breathe a sigh of relief," said Rich Williams, a lobbyist for the U.S. Public Interest Research Group.

The president did not say which tradeoffs he made to preserve Pell Grant funds, though an Associated Press article said that the bill would make $500-million in cuts through "reforms to the Pell Grant program." In his budget for the 2012 fiscal year, President Obama proposed ending year-round Pell Grants.

Republicans in the U.S. House of Representatives had sought deep cuts to both science and education, passing a bill (HR 1) in February that would cut the maximum Pell Grant by 15 percent, or $845, and eliminate dozens of education programs. Their bill would also have reduced spending on the National Institutes of Health to 2008 levels and set the National Science Foundation's budget $150-million below its 2010 level.

During debate on the House floor in February, lawmakers adopted an amendment that would temporarily bar the Education Department from enforcing its controversial "gainful employment" rule. The rule, which the department is expected to finalize in the next couple of months, would cut off federal aid to programs in which borrowers have low loan-repayment rates and high debt-to-income ratios.

On Saturday, The Huffington Post and the Higher Ed Watch blog reported that the gainful-employment provision was not included in the agreement reached Friday. But opponents of the proposed regulation were continuing to fight for the provision, with the president of the Association of Private Sector Colleges and Universities urging his members to contact lawmakers over the weekend.

Lawmakers are expected to vote on the compromise bill this week. To keep the government running until then, they passed a short-term spending bill that expires on Friday.