Fiscal Year 2008 Budget Summary February 5, 2007
Five years ago we rose above partisan differences to pass the No Child Left Behind Act, preserving local control, raising standards, and holding schools accountable for results. And because we acted, students are performing better in reading and math. Minority students are closing the achievement gap. Now, the task is to build on the success without watering down standards, without taking control from local communities and without back sliding and calling it reform.
President George W. Bush
Section I. Summary of the 2008 Budget
Five years ago the No Child Left Behind Act (NCLB) launched a revolution in our education system by insisting that all students should be proficient in reading and math by 2014 and demanding comprehensive reforms to reach this national goal, including strong assessment and accountability systems, a highly qualified teacher in every classroom, more choices for students and parents, a new emphasis on school improvement, and the use of research-based instructional practices.
Under NCLB, States and local school districts have made enormous strides in putting these reforms in place, and the first returns are promising. The latest results from the National Assessment of Educational Progress show that we have reversed a decade of stagnation in student achievement, with scores rising significantly in both reading and math in the early grades and achievement gaps between African-American and Hispanic students and their white peers falling to all-time lows.
Now it is time to work again with a bipartisan Congress on a reauthorization of NCLB that will preserve and strengthen its core principles. The Administration has developed a reauthorization proposal that would continue efforts to close achievement gaps through high State standards and strong accountability, encourage more rigorous coursework in our middle and high schools to prepare students for postsecondary education and the workforce, give States and school districts new tools and resources to help turn around low-performing schools, and provide more options to parents with students in such schools.
In particular, both the Administration's NCLB reauthorization proposal and its 2008 budget request would focus on providing additional resources and reforms at the high school level, where too many of our schools graduate students who are not prepared for either postsecondary education or employment in the global economy, and where more than 1 million students annually leave school without graduating at all.
The 2008 request would address this basic challenge to American competitiveness and individual success by providing substantial new resources both to strengthen our high schools and to increase incentives, particularly for students from low-income families, to stay in school, work hard, and go to college.
For 2008, the President is requesting $56.0 billion in discretionary appropriations for the Department of Education, the same as the 2007 level. Discretionary appropriations for the Department have grown by $13.8 billion, or 33 percent, since fiscal year 2001.
Key increases in the 2008 budget include the following:
The 2008 request for the Department of Education provides these significant increases in key areas while helping to keep overall Federal spending on track to meet the President's goal of eliminating the deficit by 2012. In addition to these increases and continued commitment to other priorities like Reading First, State Assessment Grants, and Special Education Grants to States, the overall request proposes significant discretionary and mandatory savings. For example, the discretionary request includes the proposed elimination or consolidation of 44 programs for a total savings of almost $2.2 billion. On the mandatory side, the request would save nearly $19 billion over 5 years by reducing excessive subsidies in the student loan programs.
Discretionary and mandatory components of the request are shown below:
Total Department of Education Appropriations
The 2007 discretionary level assumes enactment of a full-year continuing resolution. Also, the discretionary spending totals exclude $1.9 billion in education assistance to areas affected by hurricanes Katrina and Rita in fiscal year 2006, and $0.2 billion in similar assistance in fiscal year 2007.
Mandatory costs, primarily for the postsecondary student aid programs, fluctuate from year to year due to changes in interest rates and other factors. The $31.9 billion reduction in mandatory costs from 2006 to 2007 largely reflects a one-time downward re-estimate of student loan costs because of changes in interest rate and consolidation loan assumptions, along with the one-time $4.3 billion appropriation in 2006 to eliminate the cumulative Pell Grant funding shortfall.
Federal funding makes up about 8.9 percent of the estimated $584 billion that America is spending on elementary and secondary education during the 2006-07 school year. The relatively small size of the Federal investment in education dictates an emphasis on promising, research- based programs that have the potential to leverage more effectively the much larger State and local share of national education spending to bring about real improvement in student achievement. This is the primary goal, for example, of the strong State accountability systems required by No Child Left Behind. Under the President's request, funding for NCLB programs would rise by $1.2 billion in fiscal year 2008, from $23.3 billion to almost $24.5 billion, an increase of $7.1 billion, or 41 percent, since NCLB was enacted.
The combination of discretionary and non-discretionary resources in the President's budget is focused on the following areas.
SUPPORTING NO CHILD LEFT BEHIND REAUTHORIZATION
The request would provide $24.5 billion to support the Administration's reauthorization proposal for the Elementary and Secondary Education Act. This proposal would provide additional resources at the high school level, encourage more rigorous instruction and coursework in our middle and high schools, make available more meaningful choice options to students in low-performing schools, and significantly increase the resources available to States and LEAs to support school improvement efforts, particularly through a stronger emphasis on fundamental staffing and governance changes in schools undergoing restructuring. These and other reauthorization changes are discussed in more detail in the section on Elementary and Secondary Education. Key parts of the request that support the reauthorization include:
POSTSECONDARY STUDENT FINANCIAL ASSISTANCE
In 2008 the Department of Education will administer over $90 billion in new grants, loans, and work-study assistance to help over 11 million students and their families pay for college. The total includes more than $15 billion in Pell Grants to nearly 5.5 million students, or 200,000 more than the 2007 level, and increases the maximum award by $550the largest increase in over 30 yearsto $4,600. Most Federal postsecondary student aid is delivered through guaranteed and direct student loans, which are expected to total $73 billion in 2008. These grant and loan programs will help millions of Americans obtain the benefits of postsecondary education and play a vital role in strengthening our Nation by providing advanced training for today's global economy.
A key finding by the Secretary's bipartisan Commission on the Future of Higher Education, which issued its final report in September 2006, was the disproportionate impact of rising college costs on low-income families. Over the past 15 years, the amount needed to attend a public 4-year college has grown to nearly half of the annual income of families in the bottom quartile of earnings.
In response, the 2008 request includes substantial new investments in need-based grants to postsecondary students from low-income families. In addition, the Administration is developing administrative and other proposals to make students and their families more aware of their eligibility for financial aid, and how best to prepare academically and financially for college. Key components of this financial aid are the Pell Grants and Academic Competitiveness Grants/SMART Grants programs, for which the request includes significant increases in 2008:
HIGHER EDUCATION PROGRAMS
In addition to student financial assistance, the request provides continuing support for institutional development at colleges and universities serving large percentages of minority students, and funds opportunities for postsecondary students to gain international expertise and training as language and area specialists. Highlights include the following:
BUDGET AND PERFORMANCE INTEGRATION
As part of the President's Management Agenda, the Administration developed the Program Assessment Rating Tool (PART) to assess and improve program performance and achieve better results. Each program receives scores for program purpose and design, strategic planning, program management, and program results, as well as an overall rating of Effective, Moderately Effective, Adequate, Ineffective, or Results Not Demonstrated (RND).
In 2006, the Department assessed 15 programs, bringing the number of programs assessed using the PART since 2002 to 89. Of these, the Administration rated 4 programs Effective, 7 programs Moderately Effective, 26 programs Adequate, 4 programs Ineffective, and 48 programs RND. Key results of the 2006 PART process included Effective ratings for the Reading First State Grants and Adult Education State Grants programs, and a Moderately Effective rating for the Title I Grants to Local Educational Agencies programthe cornerstone of No Child Left Behind.
A rating of RND typically identifies a lack of long-term goals, annual performance measures, or reliable datamanagement issues that often can be addressed by ED internally, though program statutes sometimes contribute to the problem because they do not include clear and measurable objectives, results-based accountability mechanisms, or authority to gather reliable data on program outcomes. The Department works to improve the effectiveness of its programs to the extent possible under current law, and also works with the Congress on accountability and data quality issues when statutes are reauthorized. One recent advance was the full implementation of EDFacts, a centralized information management system for K-12 education programs. EDFacts will streamline the collection of timely, accurate program performance and student achievement data and facilitate its analysis and use to improve program management.
The PART is a particularly useful tool in the effort to meet the President's goal of eliminating the deficit by 2012, and the Administration is using the PART to ensure that limited resources, in the Department of Education and other Federal agencies, are targeted toward those programs and activities most likely to achieve positive results.
In general, this means investments will continue to be made in programs receiving a PART rating of Effective, Moderately Effective, or Adequate, while most programs rated Ineffective will be proposed for elimination or reform. For programs rated RND, the Administration will generally support continued funding if the programs are likely to demonstrate results in the future. However, the Administration will propose the termination of RND programs that unnecessarily duplicate other activities or suffer from such major flaws in design or execution that they are unlikely to demonstrate improved performance in the future.
For the quarter ending on September 30, 2006, the Department achieved its first "green"rating for budget and performance integration on the President's Management Scorecard by establishing efficiency measures for all programs that have undergone a PART assessment and conducting marginal cost analyses of three programs. With the publication of the President's Budget, 94 percent of the Department's budget will have been reviewed using the PART. This includes $400 million associated with small programs for which the Department was not required to conduct a PART assessment.
For further information contact the ED Budget Service.
This page last modifiedFebruary 5, 2007(mjj).