Reaction to President Obama’s budget for next year is rolling in from the higher ed. community, along with more details about the programs. News of the proposed expansion of Pell Grants, creation of a new community college job-training fund, and limits on student-loan interest rates has been met with general support from many association leaders. But in an election year, just how much of the wishlist will become a reality is up in the air
The Project on Student Debt, which has chronicled the rising cost of college and the financial toll it takes on students, said in a written statement that the 2013 budget, which was released yesterday, rightly makes college affordability a high priority.
As part of the Institute for College Access and Success, the Washington nonprofit noted that the budget fully funds the maximum Pell Grant of $5,635, expands access to work-study jobs, and proposes to make permanent the American Opportunity Tax Credit. “The budget also makes substantial investments in education and training at community colleges, where the vast majority of students have no student debt,” the statement says.
While keeping the interest rate on subsidized Stafford Loans at 3.4 percent, the Project on Student Debt expressed concern about proposed changes to the Perkins Loan program that would make these loans more costly for students.
Student groups are rallying to stop interest rates on Stafford loans from doubling to 6.8 percent in July. “In this economy, the last thing we should do is double the interest rates on student loans. Graduates already face high debt levels made worse by an uncertain job market,” Rich Williams, higher education advocate for US PIRG said in a statement yesterday. “Students and families need what the president offers in this budget, which is to keep interest rates low and provide more Pell Grant funding for students.”
About 8 million low- and moderate-income students take out Stafford loans each year, which do not accumulate interest while the borrower is in school. If Congress allows the interest rates to double, the increase will cost the average borrower $2,800 in additional interest and about an additional $5,000 for those borrowing the maximum $23,000 over a 10-year repayment period.
The grassroots group, Young Invincibles, also chimed in with support for the new education provisions in the FY 2013 budget.
The White House yesterday issued a fact sheet on the proposed Community College Career Fund.
The Association of Community College Trustees applauded the inclusion of the new $8 billion fund to expand partnerships between schools and the business community, calling it a “historic investment in the community college training system.”
Included in the initiative are paid internships for low-income community college students to earn credits and get experience in a high-wage, high-skill field.
Murial Howard, president of the American Association of State College and Universities, said the budget reflects the president’s commitment to investing in education. “The budget contains support for policies important to AASCU including funding for good teachers in the K-12 sector; calling on Congress to maintain the current interest rate on federal student loans; doubling the number of work-study students over the next five years; and permanently extending the American Opportunity Tax Credit,” according to a statement released today.
A version of this news article first appeared in the College Bound blog.