Duncan Defends Cost and Direction of Education Budget to Congress

February 25, 2010

Secretary of Education Arne Duncan began his public defense of the Obama administration's education budget Thursday on Capitol Hill as he responded to a series of expected criticisms from Republicans about the plan's cost. He then faced pointed questions from as many fellow Democrats who were worried about the budget's direction.

During more than two hours of testimony before the House Budget Committee, Mr. Duncan repeatedly explained that the plan to increase federal education spending by 7.5 percent at a time of severe budget constraint reflected the administration's firm belief that education is key to the nation's long-term economic success.

Republicans, led by Rep. Jeb Hensarling of Texas, warned that the scale of the proposed increase would mean higher taxes for families who are already struggling to find enough money to pay for college. And the Democrats questioned whether the administration's proposed new emphasis on competitive grants would hurt the neediest students, from elementary school through college.

"I'm very disappointed," Rep. Gwen Moore, a Democrat from Wisconsin, said of President Obama's plan to seek no increase in the $910-million budget for TRIO programs, which help guide financially needy students into and through college.

Such an approach will undercut the president's goal of having the United States be atop the world by 2020 in the share of its residents with college degrees, Ms. Moore said. She added, "It's going to be a direct hit on" historically black colleges.

Mr. Obama proposed this month a $3.8-trillion federal budget for the 2011 fiscal year that includes $77.8-billion in total Education Department spending, making education the most prominent exception to the administration's promise of a net freeze on nondefense discretionary spending.

Pell Grant Increase

The president's plan includes making the Pell Grant, the main federal aid provided to low-income college students, an entitlement that receives an automatic budget allocation each year to meet the number of students who qualify.

Mr. Obama also proposed increasing the grant's maximum per-student value each year by the rate of inflation plus one percentage point, and providing more-favorable repayment options for students taking federally subsidized loans.

The president's budget was widely praised by higher-education leaders. The complaints from Ms. Moore, however, reflected the concerns of a segment of activists who say the effectiveness of expanding Pell Grants will be undercut if the tradeoff shortchanges TRIO's ability to help low-income and minority students understand basic facts about applying to and succeeding in college.

The lack of guidance and money must be recognized together as "the two obstacles to real opportunity" to enroll in and graduate from college, Maureen Hoyler, executive vice president of the Council for Opportunity in Education, a coalition of more than 1,000 colleges and service agencies, said in an interview.

In the hearing, Mr. Duncan said he recognized the need. Mr. Obama's plan would give TRIO its current budget, Mr. Duncan said, and then allow it and other programs to compete on the basis of merit for more money from a $2.5-billion College Access and Completion Fund that the president has proposed.

That competitive approach generated a series of complaints to Mr. Duncan from Democrats concerned about a possible decline in federal support for the neediest schools and students at all educational levels.

Much of Mr. Obama's suggested increases in spending on education, including money for the Pell Grant and the College Access and Completion Fund, would come from his proposed elimination of the bank-based system for distributing federal student loans. Mr. Obama has proposed that college students rely solely on the Education Department's direct-lending system, a change that the nonpartisan Congressional Budget Office has estimated would save taxpayers $87-billion over 10 years.

Senate Delays

The House of Representatives passed legislation last September to end the bank-based system. Senate leaders haven't yet acted, concerned they will need to use a legislative tool known as reconciliation—in which a bill that reduces overall federal spending can be approved with a simple majority of 51 votes rather than the 60 necessary for cloture—to get enough votes to pass the student-loan measure. But reconciliation can be used only once each budget cycle, and Senate leaders are waiting to see if they also need to use it to pass health-care legislation.

Supporters of the bank-based system have warned that the continuing delay in Senate action may cause problems for colleges trying to prepare for the coming academic year. Rep. Cynthia M. Lummis, Republican of Wyoming, told Mr. Duncan on Thursday that the University of Wyoming is "caught in the crossfire" over the proposal to end the bank-based system. The university, she said, is unsure how to proceed and what to tell its students as it waits for Senate action.

Mr. Duncan has said that most colleges are already making the transition to direct lending on their own, with few or no problems, and he told Ms. Lummis that department officials were ready to work with any institution having such problems.

In an interview, the director of student financial aid at the University of Wyoming, David L. Gruen, expressed surprise at the congresswoman's comments at the hearing. The university has "everything in place to switch to direct lending beginning with this summer session in May," Mr. Gruen told The Chronicle.

The Republican critics on the committee also included Rep. Jim Jordan of Ohio, who repeatedly asked the secretary for salary figures for Education Department officials. The department's average annual salary is about $100,000, Mr. Duncan said. Mr. Jordan complained that the figure is twice that of the average teacher salary, and said the proposed budget would increase the department's 4,000-member work force by about 10 percent.

The department's budget director, Thomas P. Skelly, told the congressman that much of that increase represented workers who will help manage the student-loan program as part of the plan to end the bank-based system, which would save the government $87-billion. "It's a small investment with a big return," Mr. Skelly said.