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Obama Requests Increase in U.S. Education Spending to Almost $70 Billion

President Barack Obama asked for almost $70 billion in education spending, a 2.5 percent increase over last year, while he cut several other agencies’ requests.

Obama’s 2013 proposal includes a three-year, $8 billion plan to shore up career programs at community colleges that would be co-administered by the Education and Labor departments. The proposed budget would also keep interest rates on federal Stafford loans for college students from doubling to 6.8 percent, according to White House documents released today.

Obama is asking to expand education programs as Republican presidential candidates call to abolish or shrink the Education Department. The budget request, which includes cuts in the Defense, Agriculture and Justice departments, indicates that education and job training remain high on the list of the administration’s priorities.

“Education and lifelong learning will be critical for anyone trying to compete for the jobs of the future,” Obama said today in the budget documents. “That is why I will continue to make education a national mission.”

Obama’s request will keep the maximum level of annual Pell Grants for poor college students at $5,635 through the 2014-2015 academic year. Congressional Republicans had proposed cutting the maximum grant by 15 percent last year.

The community college plan designates funds in the 2013 budget to establish training courses for skilled careers, develop partnerships between the schools and employers, and help state and local governments attract businesses, the Education Department said.

Can’t Afford Upgrades

Community colleges lack funds for buildings and equipment needed to teach specialized courses for highly skilled jobs, said Karen Stout, president of Montgomery County Community College in Pennsylvania, which has campuses in Blue Bell and Pottstown. The college’s budget was cut 10 percent last year, and it hasn’t had new funds for building in four years, she said.

While she would like to expand her college’s programs for health-care workers and nuclear-engineering technicians, they require equipment and specialized instructors she can’t currently afford, Stout said.

“It sounds like this program matches up exactly with those needs,” said Stout, who hadn’t seen all the details of Obama’s plan. Obama unveiled the program today at Northern Virginia Community College, in Annandale, Virginia.

For-Profit Colleges

The Coalition for Educational Success, a for-profit college trade group, said the Obama administration should “widen the impact” of its career-training program by extending it to all institutions of higher education.

“Career colleges have more students enrolled in high- growth fields” than both public and private not-for-profit schools, the Coalition said today in a statement. For-profit colleges also return taxpayer money in the form of millions of dollars in taxes annually, the group said.

Apollo Group Inc. (APOL)’s University of Phoenix is the largest for-profit college chain by enrollment.

The administration has also proposed measures to make higher education more affordable. Colleges that meet or beat the Education Department’s criteria will gain greater access to a pool of student loans and campus-based grants.

“College administrators get to decide who gets the money,” said Mark Kantrowitz, publisher of FinAid.org, a college grant and loan website. “It’s very popular with financial-aid administrators because it lets them solve problems.”

To contact the reporter on this story: John Lauerman in Boston at jlauerman@bloomberg.net

To contact the editor responsible for this story: Lisa Wolfson at lwolfson@bloomberg.net

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