Holding Onto the Money: AACC Legislative Update

March 10, 2011

•David BaimeAACC Senior VP for Government Relations & Research

•Jim HermesAACC Director of Government Relations

• Laurie Quarles AACC Legislative Associate

AACC Legislative Update

•Overview of New Congress•Status of FY 2011 Appropriations•Obama Administration’s FY 2012 Budget•WIA Reauthorization•TAA CCCT Grant Program•Gainful Employment Regulations•Tax Issues•Regional Community College Summits

Overview of 112th Congress

• 87 New Republican House Members—More than 1/3 of Caucus

• Laser-Like Focus on Cutting Spending by House Republicans—New Members Not Invested In Status Quo

• Obama and Dems Forced to Respond to New Agenda

Budget Issues

•Focus So Far Limited to “Non-Security Discretionary Spending” –About 1/6th of Budget

•Earmarks Gone for Next Two Years and Maybe Longer

•Major Battles Coming and Legislative Calendar Will Be Dominated and Obstructed by Funding Issues

•Government Shutdown Seems Possible

Pell Grant Program•More Important Now Than Ever as a Result

of Tuition Increases/State and Local Cuts•> 3 Million CC Beneficiaries•> $9 Billion Received by CC Students—32%

of Total•For-Profit Presence—1/4 of all Funding•Program Cost Doubled Over Last Four

Years; Recipients Up 42%•Program Costs of Deep Concern to Both

Parties

FY 2011 Labor-HHS-Education Appropriations

• No Final FY 2011 Appropriations Bills• Five Continuing Resolutions (CR) to Date• 111th Congress Approved CR through March 4• House Passed H.R. 1 on February 19 – Massive

Cuts• Congress Approved Short-Term CR on March 2;

Expires March 18; Cut $4 Billion including LEAP • Senate Dems Introduced Full-Year CR March 4

FY 2011 Labor-HHS-Education Appropriations—House

•House Full-Year CR, H.R. 1 ▫Cuts FY 2011 discretionary programs by $61 billion▫Slashes Pell Grant max from $5,550 to $4,705▫Eliminates funding for SEOG ($ 757.5 M)▫Cuts TRIO from $853 M to $828 M▫Cuts GEAR UP from $323 M to $303 M ▫Eliminates funding for Tech Prep ($102.9 M)▫Cuts funding for Title III & Title V Programs

•

FY 2011 Labor-HHS-Education Appropriations—House

•H.R 1, Cont’d▫Cuts all new funding for WIA’s Adult,

Dislocated Workers and Youth formula programs

▫Eliminates nearly all WIA national discretionary grants

▫Rescinds $175 M in unobligated Dislocated Worker Reserve and Emergency Grants

▫Cuts NSF funding and a host of other discretionary programs

▫Eliminates earmarks

FY 2011 Labor-HHS-Education Appropriations—Senate

•Senate Democrats’ FY 2011 CR ▫Cuts spending by $6.5 billion & eliminates

earmarks ▫Provides $11 B more than H.R. 1 for education,

including $5.7 B to address Pell Grant shortfall▫Preserves Pell Grant max at $5,550▫Maintains current SEOG funding▫Restores funding for TRIO, GEAR UP, and Title

III and Title V programs (FY 2010 levels)

FY 2011 Labor-HHS-Education Appropriations—Senate

•Senate Democrat’s FY 2011 CR ▫Preserves funding for WIA but eliminates

funding for the Career Pathways Innovation Fund for FY 2011 and rescinds FY 2010 funding

▫Cuts NSF but by $284 million less than H.R. 1 cuts NSF

FY 2011 Appropriations•On March 9, the Senate voted on two

competing spending bills for FY 2011▫The House-passed CR, H.R. 1, was rejected

44-56 (All Democrats voted against; 3 conservative GOP Senators also opposed)

▫The Senate Democrats’ alternative also failed to secure the required 60 votes for passage

▫Vote 42-58 with 10 Dems voting against •Anticipate another short-term CR but final

deal

Obama’s FY 2012 Budget

•Unveiled February 14•Freezes Overall Non-Security Discretionary

Spending•Preserves Pell Grant maximum at $5,550, But

at a Price▫Would eliminate the summer Pell▫Would end the payment of in-school interest

subsidy on graduate /professional student loans

Obama’s FY 2012 Budget

•Other Important Programs:▫Most student aid programs level funded▫Perkins CTE programs would be cut by

21% (including the elimination of Tech Prep)

▫Modest increase for adult education▫No funding for CPIF ($125 M)▫Some cuts in other DOL training programs▫13% increase for NSF, increased focus on

community colleges

Workforce Investment Act (WIA) Reauthorization

•Legislation Not Yet Introduced▫Senate committee staff continue to work on

bill, say draft will be ready soon▫Funding cut in H.R. 1 creates

complications for Republican authorizers▫Recent reports used to attack system

•Basic Message: Don’t De-Fund, Reauthorize!

Community College And Career Training Program (TAACCCT) / Trade

Adjustment Assistance (TAA) Extension

• TAA Program Expanded in Stimulus Bill▫ Service industries included▫ Training funds increased▫ TAA for Communities (including TAACCCT

program) established▫ Expanded program set to expire at end of 2010;

extended to February 12 at the last minute• Further Extension Has Been Stymied

▫ House proposed legislation would pay for extension by cutting $238 billion from TAACCCT program in FY 2014

▫ Republican opposition to program

Community College and Career Training Program

• $500 Million per Year for Four Years Under Trade Adjustment Assistance Act.

▫Funded by 2010 Health Care and Education Reconciliation Legislation.

• Minimum of 0.5% of funds to institution(s) in each state, but no state distribution per se.

▫Funds not limited to serving TAA recipients but design must reflect their needs.

Community College And Career Training Program

• Individual Competitive Grants Start at about $2.5 Million over Three Years, Consortia Grants Higher▫ Institution may be fiscal agent on only one grant per year,

but may partner in other consortia ▫ Reform and innovation emphasized—no simple program

expansion

• Uses of Funds ▫ Curriculum development, equipment, faculty time, etc.▫ No real property; renovation of existing property may be

possible▫ Tuition charges not envisioned in early phase of grants

• Strong Evaluation Component

Gainful Employment Regulations

•Effort by ED to Crack Down on Programs Leaving Students Unable to Retire Debts

•Greatest Impact on For-Profit Colleges but CC Programs Impacted Too

•Extraordinary Lobbying Effort by For-Profit Colleges In Opposition

•Final Regulation Delayed▫Kline amendment blocking implementation

passed House overwhelmingly; Senate pending

Program Integrity Regulations

•Final Version Published October 29

•New Requirements Relating to “State Authorization” of Distance Education of High Concern—AACC Has Written to Hill and is Working to Modify/Annul

•New “Credit Hour” Regulatory Definition Also of Concern

Tax Issues (AOTC)

• AOTC Extended for Two Years at Close of 111th Congress—Spend Now, Pay Later

• Far Preferable to Hope Scholarship:▫Larger ($2,500) credit geared to low-cost

colleges 100% of first $2,000 in tuition, 25% of next $2,000

▫Covers “course materials.” ▫40% refundable.

• Obama Wants to Make AOTC Permanent

Tax Issues—Section 127

•Section 127 Provides up to $5,250 of Tax-Free Educational Assistance to Incumbent Workers.▫Huge benefit to individuals attending

community colleges

•Enacted Legislation Extends Sec. 127 for 2 Years; Big CC Victory

Regional Community College Summits

• Department of Education Holding 4 Regional Summits:▫ Feb. 28—Community College of Philadelphia▫March 9—Lone Star Community College, TX▫March 23—Ivy Technical College, Indianapolis▫April 15—San Diego Community College

• Breakout Sessions: ▫ Transitions to Postsecondary Education;

Developmental Education; Business Partnerships; College Affordability; Completion

• “Virtual Summit” Tentatively Set for April 27

Contact Information

•David Baime▫202-728-0200 x224, dbaime@aacc.nche.edu

• Jim Hermes▫202-728-0200 x216, jhermes@aacc.nche.edu

•Laurie Quarles▫202-728-0200 x249, lquarles@aacc.nche.edu