Today the President unveiled his budget proposal for FY 2009. The detailed appendix of the President’s FY 2009 budget for the Department of Education and other departments is now on line at: http://www.whitehouse.gov/omb/budget/fy2009/pdf/appendix/edu.pdf

Once again, the President requested the elimination of the Federal Perkins Loan Program as well as the “recall” of all federal funds held in the revolving funds of participating institutions, which it claims will save $1.12 billion in FY 2009. (Page 359) The budget document says, “The program is duplicative of the larger and more broadly available Federal Family Education Loan and Direct Loan programs. The Perkins Loan account records amounts recalled from Perkins Loan institutions and subsequent repayments on outstanding Perkins Loans, as well as reimbursements of institutional funds to participating schools.” The budget says that 504,000 students received $1.103 billion in Perkins Loans in FY2008 (10/1/07-9/30/08).

The FY 2009 request includes nearly $19 billion in combined discretionary and mandatory funding for the Pell Grant program to support awards to 5.8 million students and increases the maximum award to $4,800. The Pell Grant discretionary increase ($2.6 billion) proposed for 2009 reflects updated cost estimates for the program as well as a small increase needed to restore the discretionary share of the maximum Pell Grant to $4,310. The 2009 requested increase sets the Pell Grant program on a 5-year path to a $5,400 maximum award as implemented by the College Cost Reduction and Access Act (CCRA).

The budget also would support almost $75 billion in new guaranteed and direct student loans.

The Federal Supplemental Educational Opportunity Grants (SEOG) Program has also been proposed for elimination by the President. The program provides need-based grant aid to eligible undergraduate students to help reduce financial barriers to postsecondary education. According to the Department, “Federal funding allocations are awarded to qualifying postsecondary institutions under an outdated statutory formula, and individual SEOG awards are not optimally allocated based on a student's financial need.”

The FY 2009 budget includes $2.1 billion for Higher Education Programs. The request provides level funding of $885.2 million (discretionary and mandatory funding) in order to maintain college preparation and college student support services in the Federal TRIO Programs, as well as $303.4 million for the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) and $1.17 billion for Work Study.

This afternoon the Department of Education will hold a briefing detailing more specifics in the FY 2009 budget proposal, which COHEAO staff will attend.

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