Fiscal Year 2007 Budget Summary February 6, 2006
You've got to know math if you're going to compete in this 21st-century world.
President George W. Bush
January 9, 2006
Section I. Summary of the 2007 Budget
Four years after the enactment of the No Child Left Behind Act (NCLB), the revolutionary
changes to our education system called for by President Bush are almost implemented.
States have put in place rigorous new accountability systems and will implement reading
and math assessments covering all students in grades 3-8 by the end of the current
2005-06 school year. Improved data collection and reporting on teacher qualifications
are helping States to ensure that all teachers are highly qualified. School districts are
providing new support and assistance to low-performing schools, while making available
public school choice and supplemental educational service options to millions of
students who attend those schools.
The latest results of the National Assessment of Educational Progress (NAEP), better
known as "The Nation's Report Card," show that these changes are paying off in the
only way that counts: improved student achievement. Long-term NAEP trends show
that America's 9-year-olds have made more progress in reading over the past five years
than in the previous two decades, and the achievement gaps between African-American
and Hispanic 9-year-olds and their white peers are at an all-time low. Importantly, NAEP
also shows that students in large urban school districtsthose most likely to be served
by NCLB programshave made larger achievement gains than the national average.
Despite this progress in the early grades, NAEP results for older students provide a
reminder of the need to hold fast on the "bright line" principles of NCLBannual
assessments in grades 3-8, disaggregation of data for key subgroups, and proficiency
for all students in reading and math by 2014and the challenge of ensuring continued
US prosperity in a globally competitive, technology-based economy. The 2005 NAEP
math results for 8th-graders, for example, are both illustrative and alarming: less than
one-third of 8th-graders, and just 13 percent of low-income 8th-graders, scored at the
proficient level or above. If, as the President says, "you've got to know math if you're
going to compete in this 21st century world," US math instruction clearly needs to kick
into a higher gear, and this is a key goal of the President's 2007 Budget for Education.
For 2007, the President is requesting $54.4 billion in discretionary appropriations
for the Department of Education, a decrease of $3.1 billion, or 5.5 percent, from
the 2006 level. Even with the proposed decrease, discretionary appropriations for the
Department will have grown by almost $12.2 billion, or 29 percent, since fiscal year
Key increases in the 2007 budget include the following:
$380 million in new funding to improve math and science instruction in K-12 schools, requested as part of the President's American Competitiveness Initiative.
Nearly $1.5 billion for a renewed High School Reform proposal designed to more thoroughly extend NCLB principles to the high school level and ensure that all
students, including low-achieving students most at risk of dropping out, graduate with
the knowledge and skills needed to succeed in postsecondary education or the
globally competitive workplace.
$35 million in new funds for the Department's portion of the President's multi-agency National Security Language Initiative, which in addition to contributing to national security would help US citizens compete in the global marketplace.
$100 million for a new program of America's Opportunity Scholarships for Kids, which would provide new educational options for low-income students attending
schools identified for restructuring under NCLB.
$200 million in new Title I School Improvement Grants to build State capacity to turn around schools and LEAs identified for improvement, corrective action, or
restructuring under the Title I Grants to Local Educational Agencies program.
In addition to competitiveness, a driving theme of the 2007 request is to continue to
restrain Federal spending and stay on track to meet the President's goal of cutting the
deficit in half by 2009. The overall 2007 requestincluding both discretionary and
mandatory fundscombines fiscal discipline with strong, continued commitment to
longstanding priorities such as Title I Grants to Local Educational Agencies, Special
Education Grants to States, and Pell Grants for postsecondary students. At the same
time, the budget proposes to eliminate 42 duplicative or unnecessary programs, for a
total savings of $3.5 billion. While many of these proposals are repeated from prior
years, Congress showed in the fiscal year 2006 appropriations process that it was willing
to work with the President to achieve meaningful decreases in programs that are lower
priority or do not work well in achieving their objectives. For example, the 2006
appropriations bill contained $1.4 billion in program reductions, including the elimination
of five programs.
Discretionary and mandatory components of the request are shown below:
Total Department of Education Appropriations
(in billions of dollars)
Department discretionary spending in fiscal year 2006 included $1.6 billion in education
assistance to areas affected by hurricanes Katrina and Rita, and the Reconciliation bill
would change the funding of student aid administrative costs from mandatory to
discretionary in 2007. Taking into account these one-time changes, the President's
2007 discretionary request for education would be a decline of $2.1 billion, or
3.8 percent, from the comparable 2006 level.
Mandatory costs for the student loan programs and Vocational Rehabilitation State
Grants fluctuate from year to year due to changes in inflation, interest rates, and other
factors. The $22 billion reduction in mandatory costs from 2006 to 2007 reflects
$17 billion in lower estimated student loan costs because of changes in interest rate and
consolidation loan assumptions, the one-time $4.3 billion appropriation in 2006 to
eliminate the cumulative Pell Grant funding shortfall, and $1 billion in student loan
savings from changes in the pending Higher Education Reconciliation Act.
Federal funding makes up about 8.2 percent of the estimated $555 billion that America is
spending on elementary and secondary education during the 2005-06 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 more than $1 billion in
fiscal year 2007, from $23.3 billion to almost $24.4 billion, an increase of $7 billion, or
40 percent, since NCLB was enacted.
The combination of discretionary and non-discretionary resources in the President's
budget is focused on the following areas.
PREPARING AMERICA'S STUDENTS FOR GLOBAL COMPETITION
Despite the great promise and progress of No Child Left Behind, gaps remain in the
Federal effort to improve the performance of America's public schools, gaps that
increasingly are exposed by the rapid pace of technological change and increasing
global economic competition. To ensure a strong and prosperous America in the 21st
century, our students must possess the mathematics knowledge that is the foundation of
our Nation's long dominance in science, technology, and innovation; graduate from high
school prepared to enter college or the globally competitive workforce; and master
critical foreign languages needed both for success in the global business arena and to
ensure our national security in the war on terrorism. The 2007 request addresses each
of these challenges:
$380 million, as part of the American Competitiveness Initiative, for proposals to strengthen the capacity of our schools to improve elementary and secondary
instruction in mathematics and science while complementing High School Reform
$125 million for the Math Now for Elementary School Students initiative, modeled after Reading First, to implement proven practices in math instructionincluding those recommended by the National Math Panelthat focus on preparing K-7 students for more rigorous mathematics courses in middle and high school.
$125 million for a new Math Now for Middle School Students initiative, based on the principles of the Striving Readers program, to support research-based math
interventions in middle schools.
$10 million for a National Mathematics Panel, which will be formed in fiscal year 2006 to identify key mathematics content and instructional principles to guide the
implementation of the Math Now programs. The request for 2007 would be used
to carry out the panel's recommendations, including research and dissemination
of promising practices in mathematics education.
$5 million for an Evaluation of Mathematics and Science Programs proposal that would conduct activities to improve the quality of evaluations of Federal
elementary and secondary mathematics and science programs, as well as to evaluate such programs, with a focus on examining whether they are consistent
with the principles of NCLB.
A $90 million increase for Advanced Placement to bring a new emphasis on training teachers and expanding opportunities for students, particularly in high-poverty schools, to take high-level Advanced Placement and International Baccalaureate courses in math, science, and critical foreign languages.
$25 million for the Adjunct Teacher Corps to create opportunities for qualified professionals from outside the K-12 educational system to teach secondary-school courses in the core academic subjects, with an emphasis on mathematics
and the sciences.
$1.475 billion for the President's High School Reform initiative to support interventions and expanded high school assessment aimed at improving the academic achievement of students at greatest risk of not meeting challenging State academic standards and not completing high school. Related increases include:
$70.3 million for the Striving Readers program, for a total of $100 million to significantly expand the development and implementation of research-based interventions to improve the skills of teenage students who are reading below grade level.
$8 million for State Scholars Capacity Building under the Fund for the Improvement of Education to increase the number of States implementing State Scholars programs, which encourage high school students to complete a rigorous four-year course of study.
$60 million for Academic Competitiveness and National SMART Grants, for a total of $850 million to provide grants of up to $4,000 to an estimated 600,000
low-income, high-achieving postsecondary students who have completed a rigorous high school curriculum or are majoring in mathematics, science, technology, engineering, or critical foreign languages.
$35 million for the Department's portion of the President's multi-agency National
Security Language Initiative, to significantly increase the number of American
students learning foreign languages critical for our national security and global
$24 million for a new Advancing America Through Foreign Language
Partnerships program, which would establish fully articulated language programs
of study in languages critical to US national security through grants to institutions
of higher education for partnerships with school districts for language learning
from kindergarten through high school and advanced language learning at the
A $2 million increase for Foreign Language Assistance, for a total of almost $24 million for this existing program, to provide new incentives to school districts
and States to offer instruction in critical foreign languages, such as Arabic, Chinese, Farsi, Japanese, Korean, Russian, and Urdu, in elementary and secondary schools.
$5 million for the Language Teacher Corps, which would provide training to college graduates with critical language skills who are interested in becoming
foreign language teachers.
$3 million for a Teacher-to-Teacher Initiative that would provide intensive summer training sessions and online professional development for foreign language
$1 million for a nationwide E-Learning Language Clearinghouse to help deliver foreign language education resources to schools, teachers, and students across
A NEW FOCUS ON IMPROVEMENT IN NO CHILD LEFT BEHIND
The 2007 request will fund the sixth year of No Child Left Behind implementation. With
all the key elements of the law in placeincluding assessments in grades 3-8, strong
State accountability systems, new choices for students and parents, and highly qualified
teachersStates and school districts will increasingly focus on making the substantial
annual improvement in student achievement needed to reach the 100-percent
proficiency goal by 2014. In particular, States will need comprehensive, statewide
systems of support to help school districts turn around low-performing schools that have
been identified for improvement, corrective action, and restructuring. This challenge of
continuous improvement will only grow as more school districts themselves are identified
for improvement and corrective action. For this reason, the request includes critical
proposals for strengthening Title I school improvement, while maintaining strong support
for other key NCLB programs:
$12.7 billion for Title I Grants to Local Educational Agencies, the same as the 2006 level, to maintain support for State and local efforts to meet the rigorous
accountability and teacher quality requirements of the No Child Left Behind Act. The
request also proposes to give States greater flexibility to reserve the full 4 percent of
their Title I allocations required for LEA school improvement. Title I funding has
grown by nearly $4 billion, or 45 percent, since enactment of NCLB.
$200 million in first-time funding for Title I School Improvement Grants to support strong and effective State leadership in helping to turn around low-performing schools and school districts. States would have flexibility in using formula grants to establish or expand comprehensive, statewide systems of support for the continuous
LEA and school improvement needed to meet NCLB proficiency goals.
$408 million for State Assessment Grants to maintain statutorily required levels of support for development and implementation of the annual State assessments
required by NCLB, including the science assessments that States will implement by 2007-2008. The total includes $7.6 million for competitive grants to improve the quality and reliability of State assessments, especially for students with disabilities and limited English proficiency.
$55 million for Statewide Data Systems, an increase of $30 million, to expand support for State efforts to implement longitudinal data systems to monitor individual
student performance to improve instruction and close achievement gaps, to increase State capacity for accurate reporting and use of high school graduation rates and dropout data, and to increase the capability of States to efficiently satisfy Federal reporting requirements through systems like the Education Data Exchange Network.
$2.9 billion for Improving Teacher Quality State Grants to help States ensure that all teachers of core academic subjects are highly qualified and to strengthen teachers'
subject-matter knowledge and teaching skills.
$99 million for the Teacher Incentive Fund, first funded in 2006, to encourage States and school districts to develop and implement innovative ways to provide financial
incentives for teachers and principals. This program will help close the equity gap in access to the best teachers and principals by rewarding those that raise student achievement, help to close the gap in achievement, and work in hard-to-staff schools, subjects, or rural areas.
$1.0 billion for Reading First State Grants and $103 million for Early Reading First to maintain support for comprehensive reading instruction, grounded in scientifically based reading research, that enables all young children to read well by the end of
$669 million for English Language Acquisition to support flexible, performance-based formula grants to help ensure that limited English proficient (LEP) students learn English and meet the same high academic standards as all other students. States must use a portion of their awards to increase the size of grants to districts that have experienced a significant increase in the percentage or number of recent immigrant students over the preceding two years.
$163 million for Research, Development, and Dissemination to maintain support for ongoing initiatives critical to the success of the NCLB Act, including research on
reading comprehension, mathematics and science education, teacher quality, and cognition and learning in the classroom, as well as a new program of field-initiated evaluations of promising education products and approaches to find out what works in the classroom.
MORE OPTIONS FOR PARENTS
The 2007 request would build on the expansion of parental choice in No Child Left
Behind, which requires public school choice and supplemental educational services
options for students attending schools identified for improvement, corrective action, or
restructuring. While nearly all States and most school districts have made good-faith
efforts to implement NCLB choice options, the reality is that there are too few
alternatives in many districts for parents seeking a quality education for their children.
The 2007 request would help increase the range of these alternatives through the
$100 million for a new America's Opportunity Scholarships for Kids program, which would provide the parents of students enrolled in schools identified for restructuring under NCLBa school that has not met State progress goals for 6 or more
yearswith expanded opportunities to transfer their children to a private school or to
obtain intensive supplemental services. This proposal would complement nearly
$15 million in the 2007 request for the District of Columbia to continue funding
opportunity scholarships for low-income students in DC schools.
$26 million for Voluntary Public School Choice grants to give families better education options by encouraging States and school districts to establish or expand
public school choice programs, including those providing choice across a State or across districts. The request would support a new competition focused specifically on increasing school capacity through inter-district choice strategies. Few districts have created inter-district choice arrangements under NCLB, limiting the effectiveness of the Title I choice provisions in many areas.
$215 million for Charter Schools Grants, which would support approximately 1,200 new and existing charter schools. The request includes $15 million for the State Charter School Facilities Incentive Grants program, which assists charter schools in
obtaining facilities by matching funds from State programs that make payments, on a
per-pupil basis, to finance charter schools facilities.
$37 million for the Credit Enhancement for Charter School Facilities program to maintain assistance for charter schools in acquiring, leasing, and renovating school facilities by encouraging public and nonprofit entities to provide financing through
such means as providing loan guarantees, insuring debt, and other activities to encourage private lending.
SPECIAL EDUCATION AND VOCATIONAL REHABILITATION
The Individuals with Disabilities Education Act (IDEA) was reauthorized in late 2004 to
improve educational results for students with disabilities by more closely aligning IDEA
with NCLB in areas such as accountability for results, flexibility and reduced paperwork,
enhancing the role of parents, and research-based instruction. By demanding greater
accountability for the achievement of students with disabilities, NCLB is helping to
complete the work launched by the IDEA 30 years ago, and is producing meaningful
gains for these students in terms of reading and math performance, lower dropout rates,
and higher enrollment in postsecondary education. The 2007 request would help build
on these gains.
The request also maintains support for comprehensive and coordinated vocational
rehabilitation and independent living services for individuals with disabilities through
research, training, demonstration, technical assistance, evaluation, and direct service
programs. Consistent with the Administration's multi-year initiative to reform the Federal
government's overlapping training and employment programs, funds are not requested
for 3 vocational rehabilitation programs in this account: Supported Employment State
Grants, Projects with Industry, and the Migrant and Seasonal Farmworkers program.
These programs provide services to individuals with disabilities that can be funded by
the larger VR State Grants program.
The 2007 request for these activities includes the following:
$10.7 billion for Special Education Grants to States, an increase of $100 million over 2006, and a total increase of $4.3 billion, or 69 percent, since fiscal year 2001. The request would provide an estimated $1,535 per student for more than 6.9 million
individuals with disabilities ages 3-21.
$2.8 billion for Vocational Rehabilitation State Grants, an increase of $117 million or 4.3 percent, which represents the amount necessary to satisfy the requirement to
increase funding for the program by at least the percentage change in the CPIU for
the 12-month period completed in October 2005.
POSTSECONDARY STUDENT FINANCIAL ASSISTANCE
In 2007 the Department of Education will administer over $82 billion in new grants,
loans, and work-study assistance to help over 10 million students and their families
parents pay for college. The request would provide nearly $13 billion for Pell Grants to
more than 5.2 million students, or 60,000 more than the 2006 level. The budget also
supports $66 billion in guaranteed and direct student loans. The 2007 request for
student aid builds on a number of significant accomplishments in 2006, including the
provision of $4.3 billion in mandatory funding to eliminate the multi-year funding shortfall
in the Pell Grant program and put the Pell Grant program on a firm financial footing after
years of growing fiscal instability.
The 2007 Budget also assumes enactment of the Higher Education Reconciliation Act
(HERA), which is expected in early 2006, and which makes significant changes to the
student aid programs, including several proposed in the 2006 President's Budget.
These changes include:
New, need-based Academic Competitiveness Grants and National SMART Grants. A new program would award Academic Competitiveness Grants of up to $1,300 to
high-achieving first- and second-year undergraduate students who have completed a
rigorous high school curriculum. Third- and fourth-year students majoring in
physical, life, or computer sciences, mathematics, technology, engineering, or a
critical foreign language could receive National Science and Mathematics Access to
Retain Talent (SMART) Grants of $4,000 annually. Funded through mandatory
appropriations, the program would provide $850 million in grants to 600,000 low-
income postsecondary students in 2007, and an estimated total of $4.5 billion over
Eliminating origination fees on most student loans. These fees charged to students, currently as high as 3 percent, would be phased out beginning with a 1 percent
reduction on July 1, 2006. By July 1, 2010, fees would be eliminated in the FFEL program and reduced to 1 percent in Direct Loans, with FFEL borrowers paying a 1 percent insurance premium after that date.
Raising annual loan limits, beginning July 1, 2007, from $2,625 to $3,500 for first-year students, from $3,500 to $4,500 for second-year students, and from $10,000 to
$12,000 for graduate students.
Permanently expanding teacher loan forgiveness. The HERA permanently expands loan forgiveness for highly qualified math, science, and special education teachers
serving low-income communities, while broadening the availability of this benefit for
private school teachers.
Adding a new, 3-year deferment for active military duty for FFEL, Direct Loans, and Federal Perkins Loans disbursed on or after July 1, 2001. During the deferment
period, the government would pay the interest on such loans for borrowers serving on active duty, or performing qualifying National Guard duty, during a war or other military operation or national emergency.
Capping special allowances when student interest rate exceeds guaranteed rate. Under current law, FFEL lenders receive the higher of the student interest rate or a statutorily guaranteed rate of return, called the special allowance rate. If the student
rate is lower than the guaranteed rate, the government makes up the difference. Under HERA, for new loans made on or after April 1, 2006, when the student rate is higher than the guaranteed rate, lenders would be required to rebate the difference to the government.
Restricting excessive lender subsidies by permanently limiting the ability of loan holders to retain higher-than-standard subsidy payments of up to 9.5 percent on
loans funded with the proceeds of tax-exempt securities originally issued before October 1, 1993, while ending the practice of "recycling" loans for most loan holders.
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
$417 million for the Aid for Institutional Development (HEA Title III) programs to maintain support for institutions that help close achievement and attainment gaps between minority students and their non-minority peers, including Historically Black
Colleges and Universities and Historically Black Graduate Institutions.
$94.9 million for Developing Hispanic-serving Institutions to maintain support for postsecondary education institutions that serve large percentages of Hispanic
students. This program is a key part of the Administration's effort to increase academic achievement, high school graduation, postsecondary participation, and life-long learning among Hispanic Americans.
$106.8 million for the International Education and Foreign Language Studies (IEFLS) programs, an increase of $1 million to help meet the Nation's security and economic needs through the development of expertise in foreign languages and area and international studies. The additional $1 million is requested as part of the President's National Security Language Initiative to establish a nationwide E-Learning Clearinghouse to deliver foreign language education resources to teachers and students across the country.
ASSISTANCE TO AREAS AFFECTED BY HURRICANES KATRINA AND RITA
On December 30, 2005, President Bush signed into law the Hurricane Education
Recovery Act, which provided $1.4 billion to assist school districts and schools in
meeting the educational needs of students displaced by Hurricanes Katrina and Rita and
in helping schools that were closed as a result of the hurricanes to reopen as quickly and
effectively as possible. The Act also provided $200 million to help institutions of higher
education that were directly impacted by hurricanes as well as other colleges and
universities around the country that enrolled displaced students. In addition, the
Department has made available $30 million in unspent Federal student financial
assistance to help hurricane-affected institutions. Assistance under the Hurricane
Education Recovery Act includes:
$750 million for Immediate Aid to Restart School Operations, under which the Department is awarding funds to State educational agencies (SEAs) in Louisiana,
Mississippi, Texas, and Alabama, which in turn are providing assistance to local school districts and non-public schools to help schools resume operation in areas affected by the hurricanes. The Department announced on the day the law was signed that it would immediately release $254 million of these funds to the eligible SEAs as a "first installment" of the Restart program.
$645 million in Emergency Impact Aid for Displaced Students, which will make awards to SEAs to cover the costs of educating students enrolled in public and non-public schools who were displaced by hurricanes Katrina and Rita during the 2005-06 school year. The Department will use these funds to make four quarterly payments to SEAs based on counts of displaced students enrolled in public and non-public schools.
$5 million in Assistance for Homeless Youth to provide a separate source of funding to SEAs to address the needs of homeless students displaced by Hurricanes Katrina
or Rita. SEAs will subgrant funds to LEAs on the basis of demonstrated need, and LEAs must use their grants for activities authorized under the McKinney-Vento Homeless Assistance Act.
$190 million to help rebuild institutions of higher education and assist displaced postsecondary students in Louisiana and Mississippi. Congress directed $95 million each to the Louisiana Board of Regents and the Mississippi Institutes of Higher Learning.
$10 million for the 99 postsecondary institutions around the country that enrolled displaced students following the hurricanes.
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
Of the 74 programs in the Department assessed since 2002 using the PART, the
Administration rated 2 programs Effective, 4 programs Moderately Effective, 21
programs Adequate, 6 programs Ineffective, and 41 programs Results Not
A rating of RND often indicates that a program has management issues because it
typically identifies a lack of long-term goals, annual performance measures, or reliable
data. However, program statutes often contribute by failing to give ED the necessary
tools to demonstrate success: clear and measurable objectives; strong accountability
mechanisms or other means of ensuring participants focus on achieving results; and
mechanisms for gathering high-quality, reliable data on program outcomes. Outside of
the annual budget process, to the extent possible under current law, the Department is
working to improve the effectiveness of its programs. In addition, the Department hopes
to work with Congress to improve program statutes by clarifying program objectives and
measures and by strengthening accountability and data quality. In particular, full
implementation of EDFacts, a centralized information management tool based on the
Education Data Exchange Network (EDEN), will streamline the collection of timely,
accurate program performance and student achievement data.
The President is continuing to focus taxpayer dollars on winning the War on Terror and
protecting the homeland, and enforcing additional spending restraint elsewhere across
the Federal Government. Given this spending restraint, 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
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. For programs rated RND, the Administration
is taking a careful look to determine whether the programs are likely to demonstrate
results in the future. If so, the Administration will generally support continued funding
along with management or legislative improvements. 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.
Elementary and Secondary Education
For further information contact the ED Budget Service.
This page last modifiedFebruary 6, 2006 (mjj).