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Federal Education Budget Limited by Spending Caps

June 29, 2015

Both the House and the Senate Appropriations Committees have approved their respective versions of the FY16 Labor, Health and Human Services, Education and Related Agencies funding bills, with significant cuts to Department of Education (ED) funding in each.

Appropriators are bound by budget caps for both defense and non-defense spending for FY16 under the Budget Control Act of 2011, a 10-year bipartisan budget deal. Although lawmakers agreed to temporary relief from the caps for FY14 and FY15, Republicans have been pushing through plans for FY16, which begins on October 1, 2015, under the limited spending framework set in 2011—despite pressure from Democrats and the Obama administration.

Republican budget writers worked with a discretionary spending allocation for the House bill that is $3.7 billion below the FY15 enacted level, with $2.8 billion of that cut from ED programs. In the Senate, the allocation is $3.6 billion below the FY15 level, with $1.7 billion taken from ED.

Government officials and higher education associations including NACUBO quickly pushed back against the bills. Office of Management and Budget Director Shaun Donovan recently wrote in a White House blog post, "House Republicans are proposing to shortchange students, workers, our nation's health, and the economy by cutting overall funding for the Departments of Labor, Education, and Health and Human Services by roughly $15 billion, or 9 percent, compared to the President's Budget."

NACUBO joined the American Council on Education (ACE) and 15 other higher education associations in a letter expressing concerns with the Senate plan. It states, "While we appreciate the difficulty posed by working at funding levels well below what is necessary, this bill simply fails to prioritize the investments necessary to spur real economic growth and promote a better educated citizenry. We hope that, rather than be satisfied with the approach taken in this bill, members will work in meaningful ways to increase the overall allocations for discretionary spending and provide sufficient funding for the critical programs funded in this bill."

The FY16 Labor, Health and Human Services, Education and Related Agencies appropriations bills set the following markers, which are not final numbers but reflect possible outcomes for FY16.

  • Pell Grants: Both the House and Senate bills would increase the maximum Pell Grant award by $140 to $5,915 for the 2016-17 academic year.
  • Pell Surplus: Both House and Senate appropriators would tap into the Pell surplus, a move that concerns higher education advocates because it threatens the financial health of the Pell Grant program in future years.
  • Campus-based Aid: The House bill would level fund Federal Work Study (FWS) and Supplemental Educational Opportunity Grants (SEOG). However, the Senate bill would cut FWS and SEOG by $40 million and $29 million, respectively.
  • Increased funding for the National Institutes of Health: The House bill would fund NIH at $31.2 billion, an increase of $1.1 billion over the FY15 level and $100 million over the administration's FY16 request. The Senate subcommittee-passed version would fund NIH at $32 billion.
  • Policy Riders: Both the House and Senate, in language accompanying their respective spending bills, would prohibit ED from moving forward with regulations on a number of topics, including establishing a college ratings system, setting new rules on teacher preparation, defining "gainful employment" and "credit hour," and requiring state authorization of higher education programs.

The White House objects to these spending plans and major budget negotiations are expected to take place in the coming months. NACUBO expects Congress will strike an omnibus budget deal and send it to the president for his approval sometime in the fall.


Liz Clark
Senior Director, Federal Affairs