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Education Included in Consolidated Appropriations Bill

December 21, 2009

In a rare Sunday session, the Senate gave final approval to the Consolidated Appropriations Act of 2010 this week, including funding for Labor, Health and Human Services, and Education programs. Congress has now completed most of its annual appropriations duties, despite the lack of action on at least two big issues: health care and student loans. The bill provides funding for the current fiscal year, which began October 1.

Under the compromise reached between the House and Senate (HR 3288), the maximum Pell Grant rises to $5,500 this year. Most education programs receive level funding, with notable increases in several programs benefitting minority-serving institutions. The Fund for the Improvement of Postsecondary Education (FIPSE) receives $159 million, up almost 20 percent from 2009, but more than $100 million of that is earmarked by Congress for specific projects. Research dollars are up at both the National Science Foundation and the National Institutes of Health. Americorps will get a 37 percent increase.

No funding is provided, however, for Perkins Loan cancellations. This means that while borrowers will still receive these benefits, institutional revolving loan funds will not be reimbursed for their losses. The failure to cover these benefits is probably tied to the administration's plans to completely overhaul the Perkins Loan program, now stalled along with its other proposals for major changes to the student loan programs, awaiting resolution of the health care debate. Under the administration proposal, existing Perkins Loan revolving funds held by institutions would be gradually liquidated, with assets returned to the federal government and institutions according to their historical contributions to the funds. Institutions should make sure to keep good records of all transactions, including loan cancellations, which impact Perkins fund balances, to ensure proper distribution of assets in the future, if such legislation is enacted. (Note that ED officials have suggested in recent public statements that, given the delay in passing the reforms, any changes to the Perkins Loan program are likely to be delayed a year and would not take effect before 2011.)

A chart comparing 2009 appropriations, the Obama budget request for 2010, and the House and Senate bills, is available from Inside HigherEd.

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Anne Gross
Vice President, Regulatory Affairs
202.861.2544
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