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Over the weekend, Congress passed a $1.1 trillion FY15 federal budget, funding the federal government through September 30, 2015. House and Senate appropriators unveiled the details of an omnibus spending package on December 9, but the lame-duck Congress nearly forced a government shutdown as partisan bickering as well as intra-party squabbles over the spending package delayed passage. Lawmakers ultimately approved the measure and President Obama has indicated he will sign the bill before the current stopgap spending bill expires.

The Pell Grant maximum award will increase by $100 to $5,830 in the FY15 budget (academic year 2015-16). The increase is based on automatic mandatory funding provided in previously enacted legislation.

However, many education advocates are critical of a FY15 budget maneuver that reduced overall funding for the Pell Grant program by $303 million. NACUBO and other higher education associations criticized the plan when the idea was floated to move as much as $2 billion from the Pell Grant program to other domestic spending priorities. Because the Pell Grant program is currently running a surplus, this transfer of funds has no immediate impact on the maximum award. The funding shift could impact the health and stability of the Pell Grant program in the foreseeable future.

The FY15 budget also restores eligibility for some ability-to-benefit students. Congress eliminated such eligibility in FY12. Students had been able to qualify for Pell Grants and other federal student aid programs if they passed a federally-approved test, met state requirements or completed six credit hours successfully. The FY15 legislation would enable ability-to-benefit students who are first enrolled in career pathway programs on or after July 1, 2014, to be eligible for aid, including Pell Grants.

FY15 funding for a number of other Department of Education programs remained level or was increased. Funds for Federal Work Study will grow by $15 million and TRIO programs will see a $1.5 million increase. Funds for historically black colleges and minority-serving institutions will also see a slight increase. The Department of Education's Office for Civil Rights budget will receive an additional $1.6 million.

The legislative language also overrules a recent ED policy change that disallowed the use of income from endowments funded with Title III or Title V monies for student scholarships. The language specifies that such uses are authorized at least until the Higher Education Act is reauthorized, and that past uses of such funds fall within the letter of the law.

Research agencies fared relatively well, given current limitations on domestic discretionary spending. The National Institutes of Health will receive an additional $150 million; the National Science Foundation will see an increase of $172 million. The Department of Energy Office of Science is level-funded as is the National Endowment for the Humanities.

The Internal Revenue Service faces a $350 million budget cut. Republican lawmakers frustrated by recent scandals and regulatory actions are pushing back by drastically limiting the IRS' budget. The agency has already faced a number of budget cuts in recent years—and a resulting reduction in force. With further limitations, many are concerned about the implications for taxpayer and tax practitioner services. 


Liz Clark

Vice President, Policy and Research


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