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
January 23, 2007

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:

• $1.2 billion for a reauthorized Title I Grants to Local Educational Agencies program that would more fairly distribute Title I resources to the high school level, strengthen assessment and accountability in our high schools, provide more choices to students and parents, and encourage more effective restructuring of chronically low-performing schools.

• $500 million for a reauthorized Title I School Improvement Grants program that, along with the existing 4-percent reservation of Title I Grants to LEAs funds for school improvement, would double the investment in turning around low-performing schools while ensuring that States have the resources they need to play their essential role in LEA and school improvement.

• $365 million in new funding to improve math and science instruction in K-12 schools, requested as part of the President's American Competitiveness Initiative.

• $300 million to expand private school choice and supplemental educational services options for the parents of students in Title I schools that have been identified for improvement, corrective action, and restructuring.

• A $550 increase in the maximum Pell Grant award to $4,600, a 14 percent increase that would represent the largest growth in the maximum grant in over 30 years. The request includes an additional $800 increase in the maximum Pell Grant over the next 5 years, to $5,400 in fiscal year 2012, that would enable more low-income students to attend college.

• A 50 percent increase in Academic Competitiveness Grants awarded to Pell Grant recipients in the first 2 years of college who completed a rigorous high school curriculum, from $750 to $1,125 for first-year students and from $1,300 to $1,950 for second-year students.

• $35 million 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.

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
(in billions of dollars)

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:

• $13.9 billion for Title I Grants to Local Educational Agencies, an increase of $1.2 billion, or 9.4 percent, primarily to drive more Title I funding to high schools so that they have the resources to implement the reforms and interventions that are working to improve achievement at the elementary level.

• $500 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. Funds would be evenly split between building State capacity to lead LEA and school improvement efforts and additional resources for LEAs working to turn around low-performing schools.

• $411.6 million for State Assessment Grants to maintain support for strong State assessment systems and support the development and implementation of 2 years of high school assessments that would be required by the Administration's reauthorization proposal for Title I.

• $300 million to expand private school choice and tutoring options for America's students and families, including $250 million for Promise Scholarships, a new formula program to give low-income students in restructuring schools the opportunity to transfer to private schools or public schools in other districts, or to obtain intensive tutoring; and $50 million for Opportunity Scholarships, which would award competitive grants to a broad range of entities, including municipalities, non-profit organizations, and other entities, to carry out innovative programs that give students in low-performing schools the opportunity to transfer to another public or private school or obtain intensive supplemental services.

• A $365 million increase to support the American Competitiveness Initiative by strengthening the capacity of our schools to improve instruction in mathematics and science:

  • $125 million for the Math Now for Elementary School Students initiative, modeled after Reading First, to implement proven practices in math instruction, including those that will be recommended by the National Math Panel, that focus on preparing K-6 students for more rigorous math 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.

  • A $90 million increase for Advanced Placement to provide 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.

• A $68.4 million increase for the Striving Readers program, funded for the first time in fiscal year 2005, to significantly expand the development and implementation of research-based interventions to improve the skills of teenage students who are reading below grade level.

• $1.0 billion for Reading First State Grants and $117.7 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 third grade. The request for Early Reading First, which consolidates this program with the Early Childhood Educator Professional Development program, would also help strengthen partnerships between preschool providers and institutions of higher education that provide professional development to early childhood educators.

• $2.8 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.

• $199 million for the Teacher Incentive Fund to expand support for State and local efforts to develop and implement performance-based financial incentives for teachers and principals. This program helps close the equity gap in access to the best teachers and principals by rewarding those who raise student achievement, close achievement gaps, and work in hard-to-staff schools.

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 $550—the largest increase in over 30 years—to $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:

• A $550 increase in the Pell Grant maximum award to $4,600 in 2008. This level would pay 100 percent of tuition and fees at an average public community or technical college, and 75 percent of the tuition at an average 4-year public institution. In addition, the Administration is proposing to raise the maximum Pell Grant by $200 annually from 2009 through 2012, to $5,400. All increases over the 2006 maximum award of $4,050 would be paid for with savings from the mandatory student loan programs.

• A 50 percent increase in Academic Competitiveness Grants (ACG) awarded to Pell Grant recipients in the first 2 years of college for strong academic preparation and achievement. This proposal would complement the Administration's ESEA reauthorization proposal, which calls for more rigorous coursework in the Nation's high schools, because Academic Competitiveness Grants are awarded to students from low-income families who complete a rigorous high school curriculum. ACG awards would rise from $750 to $1,125 for first-year students and from $1,300 to $1,950 for second-year students.

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:

• $402.8 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.

• $105.8 million for the International Education and Foreign Language Studies (IEFLS) programs, to help meet the Nation's security and economic needs through the development of expertise in foreign languages and area and international studies. The request includes $1 million 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.

• $828.2 million for the Federal TRIO Programs and $303.4 million for Gaining Early Awareness and Readiness for Undergraduate Education Programs (GEAR UP), which provide educational outreach and support services to help an estimated 1.6 million disadvantaged students to enter and complete college.

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 program—the cornerstone of No Child Left Behind.

A rating of RND typically identifies a lack of long-term goals, annual performance measures, or reliable data—management 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.

 Elementary and Secondary Education

For further information contact the ED Budget Service.

This page last modified—February 5, 2007(mjj).