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Department of Education Tips Its Hat on Planned Sequesters, but Still Little Information Available

July 25, 2012

Members of the Senate Appropriations Subcommittee on Labor, Health & Human Services (HHS), and Education huddled today with Secretary of Education Arne Duncan and several school officials for a hearing to examine how sequestration – the automatic, across-the-board budget cuts coming in January – might affect education programs. Virtually everyone agreed: The impact on schools would be severe. Still, education stakeholders have been asking how sequestration might affect schools, and until this past week they lacked good estimates of those effects.

First, a quick review: Last summer, Congress passed the Budget Control Act, which required lawmakers to form a congressional “supercommittee” and hammer out a deal to reduce the deficit by at least $1.2 trillion over 10 years. The committee failed, and Congress didn’t pass any other deficit reduction package by its deadline, so federal agencies will be required as of January 2, 2013 to cut funding they will be allocated in a forthcoming fiscal year 2013 appropriations bill (Congress hasn’t passed the bill yet) by a uniform percentage. The supercommittee failure also triggered lower limits on future appropriations bills for the next eight years.

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The automatic, across-the-board cuts are known as sequesters. Congress has previously used the device to enforce budget agreements, but in most cases, lawmakers have voted to “turn off” the sequesters before they take effect, rendering them moot. It’s still unclear whether Congress will pass a bill cancelling the cuts, or whether the president would sign such a law.

Perhaps most valuable for schools trying to plan ahead is the guidance that Deputy Secretary of Education Anthony Miller issued late last week to chief state school officers. That memo says that four programs – Title I grants, School Improvement Programs, special education Part B state grants, and Career, Technical, and Adult Education – that are funded though “advance appropriations” will actually be exempt until the 2013-14 school year. In other words, these programs have already been allocated a big chunk of fiscal  year 2013 funding ahead of time and that funding is now exempt from the sequester in January.

That means schools will be spared cuts to those programs – which comprise most of the largest funding blocks in the Department’s discretionary budget – until the 2013-14 school year. Other federal programs will feel the cuts as soon as January 2013. As Deputy Secretary Miller said, schools will not have to lay off teachers or postpone hiring for the upcoming school year – and lawmakers have some time to find another workaround to the pending cuts.

There is one exception to the delayed effects of sequestration for education programs.  The Impact Aid program, appropriated $1.2 billion in fiscal year 2012, is not funded with advance appropriations. It will therefore see the effects of sequestration as early as this fall. As one witness at today’s hearing pointed out, for some school districts Impact Aid makes up a huge portion of their budget. For those schools, funds will be affected for the 2012-13 school year, and the cuts would place a substantial hardship on those districts.

Stakeholders were also interested to hear Secretary Duncan give his best estimates of the Department’s plans for sequestration in today’s hearing. Pell Grants, he confirmed, would be exempt from sequestration. Other programs wouldn’t be so lucky. The Department will not have leeway to pick and choose which programs will be cut. The law is written such that virtually all Department programs will face across-the-board cuts. The Department’s current estimates, using a Congressional Budget Office estimate, is that the agency’s programs will be cut by 7.8 percent compared approximately to what they received in fiscal year 2012. That translates to $1.1 billion less for Title I grants, and $900 million less for special education state grants.

Chairman of the Subcommittee Tom Harkin released his own report ahead of the hearing. The report uses the same 7.8 percent estimated across-the-board cut to predict expected cuts to a variety of Department of Education programs, including $41.6 million from the school improvement grant (SIG) program, almost $90 million from the federal Impact Aid program, and $76.1 million from federal work-study grants for college and graduate students.

There are too many unknowns at this point to make accurate claims about the impact sequestration would have on school districts – for one, only the Senate Appropriations Committee and House Appropriations Labor-HHS-Education Subcommittee have passed fiscal year 2013 appropriations. So we don’t yet know from what level programs will be cut. And Congress may yet cancel the sequester in favor of a more generous budget for fiscal year 2013 (that could happen in the lame duck session Congress will hold between the elections and the 2013 presidential inauguration). But Secretary Duncan’s testimony and Deputy Secretary Miller’s issuance give the first inside look at the planning for sequesters happening inside the U.S. Department of Education.

Friday News Roundup: Week of July 16-20

July 20, 2012

Mississippi schools to seek $320 million more in 2014

New Jersey’s Rutgers University raises in-state tuition 2.5 percent despite protests

South Carolina Senate overrides veto of $10 million for teachers

Audit: Colorado tuition up, state stipend decreases

Mississippi schools to seek $320 million more in 2014
The Mississippi State Board of Education this week released its official request to legislators for the amount of funding public K-12 schools will require in the 2014 fiscal year. The formula, known as the Mississippi Adequate Education Program, requires the Board to request the full funding amount required under its calculations from lawmakers. However, legislators have often under-funded the formula. In the current 2013 fiscal year, for example, public schools received $2.04 billion, $251 million less than required by the formula. For next year, the Board has requested $2.34 billion – $321 million, or 16 percent, more than was provided this year. Legislators say it is too soon to say whether the state will be able to afford that. However, they are also likely to wait for the results of a commission appointed to review the funding formula and offer recommendations for improvement. More here…

New Jersey’s Rutgers University raises in-state tuition 2.5 percent despite protests
Rutgers University students went before the Rutgers Board of Governors and staged protests outside the board’s regular meeting this week to request a tuition freeze for the 2012-13 academic year, but without results. The board voted to raise tuition and fees for in-state students by 2.5 percent for the academic year beginning this fall. The tuition hike comes in spite of the fact that state funding for the school was held constant at 2012 levels this year; legislators cut funding for the school precipitously in recent years, and institutions are still struggling to make up the difference. The increase means New Jersey students will be charged $13,073 in tuition and fees this year, $318 more than last year. Room and board will also increase by 1.9 percent, up to an average of $10,970, or $206 more than last year. Graduate students and out-of-state undergraduate students also saw their costs rise – in-state graduate students will pay 2.5 percent more per credit hour, and out-of-state students will be charged a 4 percent increase, $910 more than last year. University officials said they plan to find $20 million to cut from the school’s budget over the next year to hold down costs. More here…

South Carolina Senate overrides veto of $10 million for teachers
The South Carolina Senate voted this week to restore $10 million in the state’s fiscal year 2013 budget that had been vetoed by Governor Nikki Haley. The funds will help compensate school districts for a state-required teacher salary bump this year. Without the state dollars, lawmakers said, districts would be required to raise property taxes to cover the mandatory two percent salary increases. Governor Haley stated that she vetoed the provision because it offered only one-time funding; the veto left intact $39 million for the salary increases that are paid for with recurring funds. The $10 million newly-restored dollars, meanwhile, came from an education innovation fund created in 1984 with a one-cent addition to the state sales tax, and would not necessarily be funded every year. More here…

Audit: Colorado tuition up, state stipend decreases
An audit of Colorado colleges released this week found that students are paying more in tuition since lawmakers began to decrease funding for a stipend program that provides money directly to students, rather than to institutions. The audit found that the recession slowed the implementation of the 2006 policy, called the College Opportunity Fund. Since the start of the recession, students’ stipends have dropped as the state struggled to keep up with its expenditures in the face of falling revenue. The per-credit hour stipend decreased from $80 in fiscal year 2006 to $62 in 2011; at the same time, institutions raised tuition in part to accommodate for lost state funding, up from $6,660 to $8,530 on average. Student enrollment also grew by about 24 percent, while state spending dropped from $272 million in 2006 to $269 million in 2011. Although the law requires the state department of higher education to request the full funding amount needed including inflation and enrollment increases, the department has not done so in recent years because of budgetary considerations. More here…

Friday News Roundup: Week of July 9-13

July 13, 2012

Corbett signs bill to help troubled Pennsylvania school districts

Nevada school district: Race to the Top money not worth the effort

Kansas Board of Education recommends $440 million increase in base state aid to schools

Arizona governor opposes initiative to make education sales tax permanent

Corbett signs bill to help troubled Pennsylvania school districts
Pennsylvania Governor Tom Corbett signed into law this week a bill that helps financially distressed school districts balance their budgets. Under the new law, the state secretary of education will appoint a chief recovery officer to districts deemed in “financial distress” to work with local school boards to create a recovery plan. Should the board approve the plan, the district will be eligible for interest-free loans from the state. Under the law, districts may go to new lengths to save money. The financially-distressed districts are allowed to cancel or renegotiate contracts that did not involve collective bargaining agreements; close schools and eliminate positions for professional employees or transfer those faculty members; hire teachers without certain certifications at the Secretary’s discretion; and convert schools to charter schools if that would save money. More here...

Nevada school district: Race to the Top money not worth the effort
The Clark County School Board in Nevada this week announced its decision not to compete for the new district-level federal Race to the Top grants because they argue that the costs and restrictions associated with the grant far outweigh the potential benefits. One board member said that Clark County, with 309,000 students and a $2 billion annual budget, is eligible for a maximum grant of only $6 million. Given that the grant requires creating a “personalized learning environment” for every student in a 10,000-student pilot program with an expectation that the program will expand to more students at the completion of the pilot program, the size of the award was not expected to cover the potential costs. Implementing a comprehensive teacher, principal, superintendent, and school board evaluation system by the 2014-2015 school year also seemed too challenging and costly given the size of the grant. Board members said they would instead pursue funding with fewer requirements attached. More here...

Kansas Board of Education recommends $440 million increase in base state aid to schools
Kansas’ State Board of Education has submitted a recommendation for a $440 million increase in base state aid to school districts. In the 2008-09 school year, base state per pupil expenditure was $4,438 per pupil, but in the face of a significant drop in state revenue, legislators cut that number to $3,838 dollars for the 2012-13 school year. Under Kansas law, the base state aid level is set by law at $4,492 per pupil for 2012-13, and the Board of Education’s recommendation would restore aid to those levels. The legislature will take the recommendation under consideration in next year’s 2013 legislative session, but many dismissed the proposal out of hand.  Governor Sam Brownback has not yet broadcast his feelings about the recommendation, but Republican lawmakers cited the anticipated expense of implementing the new federal healthcare law as costing dollars that would have otherwise gone to the school districts. More here...

Arizona governor opposes initiative to make education sales tax permanent
Arizona Governor Jan Brewer announced Monday that she opposes making permanent a temporary two-year sales tax that directed funding to K-12 schools, although she fought for the initial implementation of the temporary tax. Most of the approximately $1 billion collected each year from the 1 cent surcharge automatically is directed towards K-12 funding, with the remainder targeted to scholarships for higher education, children’s health insurance, and infrastructure projects. Brewer stated that she opposes any initiative that bypasses the legislature and instead automatically allocates funds. Proponents of the initiative say that voters don’t trust the legislature with their money, and would rather allocate it directly to K-12 education spending. The measure may not make it on the ballot this November due to a technical legal question about its filing, but proponents of the initiative claim that internal polling shows a substantial majority of Arizona voters would support the measure if it does. More here...

Event Summary: Jobs are Not Enough

July 12, 2012
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The Asset Building Program hosted an event Wednesday, July 11 to release the July/August issue of the Washington Monthly. The issue focuses on the importance and applicability of the asset building agenda in the lives of all Americans. Utilizing the magazine's focus as a frame for the event, our panelists tackled critical themes such as savings as a path to higher education, the importance of life-long savings mechanisms, the role of federal policies in promoting prosperity, and a growing political divide between young and old Americans.

Federal Education Budget Project Announces Updates to Education Funding Database

July 9, 2012

The New America Foundation's Federal Education Budget Project (FEBP) this week published an update to its education funding database, www.edbudgetproject.org. The update includes the most recent data available for virtually all of the nation’s institutions of higher education. The FEBP database features information on federal funding, student demographics, and student achievement for all 50 states and nearly 14,000 school districts, as well as more than 7,500 institutions of higher education. FEBP is the only centralized source of these data available to the public, the media, and education policymakers.

Updated higher education data for the 2010 school year include:

  • Price of attendance by institution;
  • Spending on federal aid programs and number of recipients, including Pell Grants, Stafford Loans, PLUS Loans, Perkins Loans, Work Study, and Supplemental Education Opportunity Grants, by state and institution;
  • Average federal, state, local, and institutional grant and loan aid per student as well as percent of students receiving such aid by state and institution;
  • Enrollment by institution and state, including demographic breakdown by race/ethnicity and gender;
  • Student outcomes, including graduation and retention rates, federal student loan two-year default rates, trial three-year cohort default rates for 2006 through 2008, and federal student loan repayment rates by state and institution, where appropriate; and
  • Net price by institution for students from families who make $30,000 annually or less for 2009 and 2010.

The FEBP website enables users to view and download education data profiles for states, school districts, and institutions of higher education. Users can conduct custom comparisons of similar states, districts, and institutions to better understand how federal funding, student outcomes, and student demographics vary and interact across the nation. These dynamic comparisons can be used to answer a number of education policy questions.

To view the higher education data in FEBP, click here.

Asset Building News Week, July 2 - 6

July 6, 2012
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The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include anti-poverty initiatives, access to financial services, and inequality.

Friday News Roundup: Week of June 25-29

June 29, 2012

New California budget crafted to persuade voters to support Gov. Jerry Brown’s tax hike

Kansas colleges and universities told to prioritize budget requests

Insolvency threat to New York school districts

Louisiana state-run colleges work out budgets including nearly $66 million less from general fund

New California budget crafted to persuade voters to support Gov. Jerry Brown’s tax hike
California Governor Jerry Brown this week signed into law a fiscal year 2013 budget that relies on voters to approve new taxes that will fund public services, including education. If the tax hikes are not passed in November, the budget triggers $6 billion in automatic cuts, targeted to public education and other programs. A significant portion of those cuts would come from K-12 education -- $5.4 billion -- and a portion of the remainder from community colleges. Additionally, under a provision added in negotiations in the legislature, school districts would have the option to cut costs by shortening the school year from 175 to 160 days per year for two years. The University of California and California State University systems could also each face a $250 million shortfall mid year if the tax increases are not approved, and those school systems could be forced to raise tuition during the 2013 academic year to cover the costs.  If the tax hikes are approved, though, 89  percent of the additional funding provided will be concentrated in K-12 schools and 11 percent in community colleges. More here...

Kansas colleges and universities told to prioritize budget requests
The Kansas Board of Regents this week asked the state’s colleges and universities to revise their original fiscal year 2013 budget requests to reflect their priorities in building and renovating facilities. According to the Board, the original requests were unrealistic, totaling over $160 million, and were unlikely to pass the legislature. The Board is planning to meet with universities next month to identify top-priority projects and rewrite the budget proposals.  Ideally, Board members have indicated, the requests will reflect schools’ greatest academic needs and will be supported by the institutions’ records of using funds for capital improvements.  Large requests include $30 million toward a medical school building at Kansas University, $16 million for technical colleges, and $15 million to expand the Kansas Technology Center at Pittsburg State University. More here...

Insolvency threat to New York school districts
A group of business experts in New York says that nearly one-third of New York school districts will use the entirety of their cash reserves within the next two years unless significant changes are made to state policies. While some lawmakers have criticized school districts for maintaining too large of a “rainy day” fund, that concern seems to be disappearing at an alarming rate -- 81 percent of the districts surveyed stated that they would burn through their cash reserves within five years. A cap on state property taxes and increasing pension costs are partially to blame for the current squeeze. Michael Borges, executive director of the state Association of School Business Officials, the group that conducted the survey, says that New York state laws make it difficult to negotiate with teachers unions to lower schools’ personnel costs, although in many school districts, payroll accounts for more than half their budget, and benefits and health insurance account for nearly another quarter. One option the group has suggested would decrease state funding for special education programs, which in New York far exceeds the federally-mandated level of state funding. More here...

Louisiana state-run colleges work out budgets including nearly $66 million less from general fund
The Louisiana state legislature and Governor Bobby Jindal this month reached an agreement to cut nearly $66 million from Louisiana state-run colleges’ general fund for the 2013 fiscal year that begins July 1. Higher education and health care are the only two categories that are not protected from budget cuts by the state constitution. Once the Board of Regents signs off on the budget, the state’s higher education fund will drop to $993.6 million from $1.6 billion just four years ago. And not all universities face equal cuts; while the University of New Orleans will face an 18 percent cut from fiscal year 2012 levels, the State University of New Orleans faces a 24 percent cut. Schools’ considerations for how to deal with the shortfall run the gamut from tuition hikes to bigger class sizes to staff and faculty layoffs. A two-year-old state law permits institutions to increase tuition by as much as 10 percent annually provided the school meets certain performance criteria; some schools will likely elect to implement the full tuition hike for the 2013 academic year. More here...

Friday News Roundup: Week of June18-22

June 22, 2012

Mississippi’s public colleges seek $72 million more

Pennsylvania state House panel acts to restore college spending cuts in budget

New Mexico state spending on special education to drop by $7M

New Jersey Democrats introduce budget, but some lawmakers threaten not to vote

Mississippi’s public colleges seek $72 million more
Mississippi Commissioner of Higher Education Hank Bounds this week asked the state’s College Board to consider additional funding for public colleges in fiscal year 2014. Next year’s 2013 budget will cut spending for state universities by $32 million below 2012 levels, meaning schools will receive $670 million for the fiscal year beginning July 1. According to the schools, though, they will require $72.4 million in additional funds in the following year to increase compensation for faculty and cover increasing pension costs. Bounds stated that Mississippi’s salaries for university faculty members have dropped below those at other schools in the region. As a result, as much as $40 million of the additional funds would be directed to instructor salaries. Legislators will begin writing the fiscal year 2014 budget this fall. More here…

Pennsylvania state House panel acts to restore college spending cuts in budget
Pennsylvania lawmakers are working this week to complete the state’s fiscal year 2013 budget. State universities may be spared the deep budget cuts they faced last year. The budget, which totals $27.7 billion, eliminates a 30 percent funding cut Governor Tom Corbett had recommended for three state universities – University of Pittsburgh, Penn State University, and Temple University – and a 20 percent cut for 14 other state colleges. Instead, all of those schools will receive the same funding level as in fiscal year 2012. The agreement between the governor and the House would also provide $25 million in additional funding for the Educational Improvement Tax Credit, which received $75 million in funding in 2012. A spokesman in the governor’s office said the change is due to higher-than-expected revenue intake. The total spending level in the House plan matches that in the Senate budget passed last month, and exceeds the governor’s proposal by over $500 million. More here…

New Mexico state spending on special education to drop by $7M
According to New Mexico’s Public Education Department, the state’s spending on special education in fiscal year 2013 will drop by over $7 million from fiscal year 2012 levels due to decreases in the reported number of special education students. The state’s total enrollment has not shifted much over the past year, so officials are chalking at least some of the cost reductions up to improved data reported by school districts. School districts in the state receive funding based on student enrollment, with an additional per-student amount tacked on for each reported special education student or English language learner. The state began an audit of student enrollment in special populations last year, examining nine school districts and one charter school in-depth to determine whether their reporting numbers were accurate. After the audit, for which the results were released last week, state officials reported $4 million in questionable or undocumented spending of special education funds, in violation of state laws requiring that special education funds be used for specific purposes. More here…

New Jersey Democrats introduce budget, but some lawmakers threaten not to vote
Democrats in the New Jersey state Assembly this week introduced a fiscal year 2013 budget proposal totaling $31.7 billion. The 2013 budget has been controversial this year in large part because of conflicting views on taxes – Republican Governor Chris Christie wants to cut income taxes, while Democrats in the legislature would provide tax credits based on taxpayers’ property taxes. But Christie’s proposed reorganization and consolidation of several of the state’s universities has also played a part in the turmoil. The plan seems likely to pass the legislature since tweaks brought anticipated costs down from over $1 billion to $40 million. But nine Democrats this week signed a letter to the Speaker threatening to withhold their votes unless Christie’s higher education plan is delayed until later this year. The Democrats’ slim majority in the Assembly means they need those lawmakers’ votes to pass a budget.  More here…

Friday News Roundup: Week of June 11-15

June 15, 2012

University of Alabama System poised to raise tuition

Georgia’s zero-based budgeting program to focus on education

North Carolina Senate budget plan spends less on K-12 than House proposal

Louisiana colleges poised to raise tuition

University of Alabama System poised to raise tuition
The Finance Committee of the University of Alabama System Trustees this week issued its tuition recommendations for the 2012-13 school year. Under its proposal, in-state students would pay between 7 and 8.6 percent more in tuition and fees this coming fall than they did in the 2011-12 school year, the fifth consecutive year in which the system raised tuition and fees for students. System officials say that legislative cuts have necessitated the tuition hikes. Tuition would increase by 7 percent to total $4,600 per semester at the University of Alabama; 8.5 percent, bring tuition and fees to $4,200 per semester, at the University of Alabama at Birmingham; and 8.6 percent, making tuition and fees $4,397 per semester, at the University of Alabama at Huntsville. Though the Finance Committee has already approved the tuition hikes, the full board still needs to approve the measure. More here…

Georgia’s zero-based budgeting program to focus on education
Georgia Governor Nathan Deal recently signed a law shifting the state to “zero-based budgeting.” Zero-based budgeting will require legislators to carefully study spending for all programs and budget from scratch. Typically, legislators only closely examine programs identified for spending cuts or increases. Supporters hope the new budgeting process will reveal and eliminate waste in government spending. Though the bill only required legislators to scrutinize 10 percent of state programs in fiscal year 2013, they will be required to examine 25 education programs in 2014, including nutrition programs, Regional Education Service Agencies, and agricultural education. The state’s school funding formula is exempt from zero-based budgeting next year because a separate commission, appointed two years ago to review the formula and make recommendations to the legislature, is slated to offer its recommendation before the 2013 legislative session begins. More here…

North Carolina Senate budget plan spends less on K-12 than House proposal
The North Carolina state Senate’s fiscal year 2013 budget proposal would spend $127 million less than the House proposal and allocate less funding to education. The Senate proposal spends less on education than the House budget largely because it does not include one-time funds where the House did. Whereas the House proposal provides school districts with $259 million to fill a funding shortfall created by the loss of federal stimulus dollars a few months from now, the Senate budget does not. The Senate bill also spends less on community colleges, though it would spend more than the House on state universities. Governor Bev Perdue issued a statement denouncing the Senate budget because it declines to include her – or any – proposed new revenue sources; she had previously proposed either a three-quarter cent sales tax increase or a tax on video sweepstakes. More here…

Louisiana colleges poised to raise tuition
The Louisiana Community and Technical Colleges Board of Supervisors voted this week to approve a 10 percent tuition increase across its 16 campuses for the 2012-13 school year. Louisiana’s schools have collectively seen $360 million in budget cuts over the past four years, and the Community and Technical Colleges system will likely see a $21 million decrease in state funding from the current 2012 levels in fiscal year 2013. But schools will not be eligible for the approved 10 percent tuition hike – or any increase – unless they can meet the benchmarks set forth in the state’s 2010 GRAD Act. The GRAD Act requires colleges to meet 52 targets, including improved graduation and retention rates, before they can increase tuition by up to 10 percent. The Board of Regents will issue a ruling on whether schools are eligible to raise tuition later this month for all schools. More here…

Senate Appropriations Subcommittee Votes to Approve Fiscal Year 2013 Education Budget

June 14, 2012

The Senate took another step this week towards passing fiscal year 2013 funding for education programs when the Labor, Health & Human Services, and Education Appropriations Subcommittee voted to approve an appropriations bill for those agencies. While the subcommittee hasn’t yet made the bill text available, a summary document reveals some (though not all) key details.

Nearly all federal education programs are funded one year at time through the annual appropriations process, and the Senate Subcommittee vote is a first step in that process. Yet this action is a far cry from the end of the annual appropriations process. In fact, we’d be surprised if Democratic leaders in the Senate bring the bill to a vote before the full Senate, or if Congress manages to finalize fiscal year 2013 education funding at any point before the November elections given that the education funding bill is one of the most contentious. (Fiscal year 2013 begins on October 1, 2012, but Congress is likely to provide stop-gap funding in the meantime.) That means the Senate subcommittee bill is more like a starting point for the Democratic majority in eventual post-election negotiations on fiscal year 2013 education funding with the House of Representatives.

The Senate Subcommittee’s appropriations bill would provide overall funding of $68.52 billion to the Department of Education, a slight increase from the $68.11 billion that Congress provided the Department for fiscal year 2012. That overall spending limit is static due mainly to new spending limits Congress and the president adopted last year as part of a debt ceiling agreement. That agreement, the Budget Control Act, sets an overall appropriations limit of $1.047 trillion for fiscal year 2013. That’s just a $4 billion increase from 2012 to be shared among all federal agencies. You can track the budget and appropriations process on our background page

On the PreK-12 side, the Senate bill would provide Title I funding for economically disadvantaged students and IDEA Part B state grants for special education each an extra $100 million over 2012 levels, up to $14.6 billion and $11.7 billion, respectively. That’s not a huge increase given the size of the programs, but any increase when Congress must keep overall funding flat is good news.

Even some controversial programs would get a bump under the Subcommittee’s bill. For example, the bill would provide Race to the Top, an Obama administration favorite, with $600 million, $51 million more than in 2012. (An unspecified “significant portion” of that money will be reserved for another round of the Early Learning Challenge Race to the Top, according to a subcommittee summary.) Promise Neighborhoods, a relatively new program that provides funding for community-based interventions, would receive $80 million. That’s a $20 million increase from fiscal year 2012. And Investing in Innovation (i3) would be funded at 2012 levels ($149 million). ARPA-ED, however, an innovative research and design program the president floated unsuccessfully in both his fiscal year 2012 and 2013 budgets, would receive a portion of that funding.

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The subcommittee made some changes to higher education programs, too. One provision in the bill would ban postsecondary institutions from using federal dollars for marketing purposes or for recruiting students. Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Tom Harkin (D-IA) with Senator Kay Hagan (D-NC) proposed this change a few months ago as part of the Protecting Financial Aid for Students and Taxpayers Act, primarily targeting for-profit colleges’ allegedly-unethical recruiting practices. (It is unclear whether the appropriations bill includes language identical to the Harkin-Hagan bill or another, more comprehensive version of it.)

In acknowledgement of the national conversation around college costs and completion, the Senate panel also included a new, relatively small-scale initiative. The First in the World program, another proposal the president made in his 2012 State of the Union address but saw rejected by Congress last year, would funnel $40 million in grants to colleges and universities to attempt new cost-cutting and outcome-improving strategies.

Unlike past years, there’s no high-stakes Pell Grant funding battle with the Senate bill. In fact, Congress can cut the 2012 appropriation and still increase the grants that students will get. That’s because last year’s Budget Control Act included a supplemental $7 billion for Pell Grants for fiscal year 2013, and the Department of Education says the program wasn’t as expensive as anticipated over past years, so it’s racked up a surplus that can be spent on the fiscal year 2013 grant.

Separately, an automatic inflationary increase in the maximum grant becomes available in fiscal year 2013 (though that amount hasn’t been finalized yet and the Senate Subcommittee and the Congressional Budget Office differ on how large it will be). The 2010 Health Care and Reconciliation Act provided permanent funding for inflationary increases starting in 2013, so Congress doesn’t need to fund them through the appropriations process. Add it all up and the Senate bill funds a maximum grant of $5,645, up from $5,550 in the past few years. (A detailed table of Pell Grant funding is available here.)

Congress is still a long way from finalizing fiscal year 2013 funding for education programs. But the Appropriations Subcommittee bill at least shows where Senate Democrats’ will start negotiations this fall. Check back with Ed Money Watch throughout the budget process for more updates and analysis.

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