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January 23, 2014

Congress Passes FY 2014 Budget; What You Need to Know

In stark contrast to last year's bitter budget standoff between House Republicans, Senate Democrats, and President Obama that shut down the federal government for 16 days in October, Congressional budget negotiators reached an agreement last week that specifies funding priorities and allocations for the federal government through Sept. 30, 2014.  Striving to avoid another government shutdown and its harmful effects to the still-fragile U.S. economy, House and Senate budget negotiators have been wrangling over how to allocate money across government programs since mid-December, when Congress passed a broad budget bill setting top-line funding levels.

The $1.1 trillion budget was signed into law by President Obama last week, but what might it mean for you and higher education?

H.R. 3547 - Consolidated Appropriations Act, 2014

Introduced by U.S. Rep. Lamar Smith (R - TX), H.R. 3547 lays out the funding priorities and allocations for the remainder of FY 2014.  Among the provisions most important to student loan borrowers and their families:

  1. National Institutes of Health - Will receive $1 billion more for the current fiscal year compared with the 2013 fiscal year, in which automatic across-the-board cuts eliminated $1.55 billion from its budget.  FY 2014's budget allocation would allow the agency to continue funding current research projects and begin about 385 additional research studies and trials, according to Senator Tom Harkin, a Democrat who leads the appropriations subcommittee that oversees federal spending on health, education, labor and pension programs.  (Source: Inside Higher Ed).
     
  2. Changes to the Pell Grant Program - H.R. 3547 would fund the Pell Grant program at FY 2013 levels, but increases in mandatory spending are expected to bump up the maximum award next year by $85, to $5,730.  The legislation would also require the Education Department to provide Congress with more information about enrollment and graduation rates for Pell Grant recipients.  (Source: Inside Higher Ed).
     
  3. National Research Council Studies on Regulatory Burden, Innovation Grants - Congressional appropriators set aside $1 million for a National Research Council study on the impact of federal regulations and reporting requirements on colleges and universities.  Appropriators also allocated $75 million for the Obama administration’s “First in the World” initiative, which would give grants to colleges pursuing innovative strategies aimed at improving educational outcomes and efficiency.  (Source: Inside Higher Ed).
     
  4. Loan Servicing Changes - The agreement clarifies that there will be funding for the nonprofit student loan servicers, whose mandatory funding Congress eliminated in December when it passed a compromise deal on the overall funding level  for the federal budget.  The agreement also directs the Education Department to harmonize its standards for evaluating its largest servicers -- Sallie Mae, Nelnet, Great Lakes and Pennsylvania Higher Education Assistance Agency -- with its metrics for its several dozen smaller, not-for-profit servicers. The agreement orders the Department to report to Congress by March 31 on how it plans to streamline its loan servicing evaluation standards.  (Source: Inside Higher Ed).
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