Financial Aid

President Obama’s Fiscal Year 2010 Budget Request includes critical investments in a number of important education programs. This Fact Sheet provides a summary of those proposed investments. Congress will take these recommendations under consideration, along with its own priorities, as it works to complete the Fiscal Year 2010 appropriations process in keeping with the Budget Resolution.

The President’s Budget Request and the substantial investments in critical areas of our education system made in the American Recovery and Reinvestment Act (Recovery Act) (P.L. 111-5) demonstrate President Obama’s and Congress’ commitment to improving education. The Budget Request emphasizes a commitment to education, prioritizing current needs while setting the stage for the reform needed to help our country maintain its global competitive advantage. The Budget Request aligns with the five pillars of education reform President Obama proposed earlier this year:

1. Investing in early childhood education;
2. Challenging states to adopt better academic standards and assessments;
3. Recruiting, preparing, and rewarding effective teachers;
4. Promoting innovation and excellence in America’s schools; and
5. Increasing the number of Americans pursuing higher education.

Early Education

Zero-to-Five Initiative. The President’s Budget Request includes a strong focus on early childhood education. Part of the new Zero-to-Five initiative is $500 million for a new program of Title I Early Childhood Grants, which would encourage states to use part of the unprecedented increase in Title I Grants to Local Educational Agencies (LEAs), described below, to begin or expand Title I preschool programs. The second part of this initiative is $300 million for a new Early Learning Challenge Fund, which would provide grants for the development of State plans and infrastructure to raise the quality of publicly-funded early learning programs.

Early Reading First. The Budget Request includes $162.5 million for the Early Reading First program, a $50 million increase over the Fiscal Year 2009 level, to support as many as 52 new projects to prepare pre-school children for success in school through research-based experiences in language and literacy.

Head Start and Early Head Start. The Budget Request for the Department of Health and Human Services includes $7.2 billion for Head Start, which helps prepare low-income children for school through educational, health, nutritional, social, and other services. This funding, an increase of $122 million over the Fiscal Year 2009 level, builds on the $2.1 billion investment in Head Start included in the Recovery Act, of which $1.1 billion is for Early Head Start expansion. This investment will allow these critical programs to serve an additional 70,000 children, including 55,000 infants and toddlers.

Elementary and Secondary Education

Striving Readers. The Budget Request nearly doubles funding ($70.4 million) for the Striving Readers program, which helps to improve the reading skills of adolescents reading below grade level. The budget also includes $300 million within the Striving Readers program to fund new Early Literacy Grants, a demonstration program that would allow LEAs to test various techniques for improving reading comprehension.

Teacher Incentive Fund. Reflecting the President’s commitment to recruiting, preparing, and rewarding effective teachers, the Budget Request includes $487 million for the Teacher Incentive Fund, a $420 million increase from the Fiscal Year 2009 level. When combined with the $200 million investment in TIF made in the Recovery Act, these funds will help schools districts and states reward teachers and principals for improving student achievement and serving schools in greatest need.

Title I Grants to Local Educational Agencies. The Budget Request includes $13 billion for Title I Grants to LEAs, $1.5 billion below the Fiscal Year 2009 level, a reflection of the historic $24.5 billion investment made in the Omnibus Appropriations Act of 2009 (Omnibus) (P.L. 111-8) and the Recovery Act. These grants provide additional funding for extra academic support to help students at risk of educational failure, particularly for high-poverty areas, or to help all students in high-poverty schools meet challenging state standards.

Title I School Improvement Grants. The Budget Request includes a $1 billion increase in School Improvement Grants, reflecting a strong commitment to improving low-performing schools and ensuring that states and school districts have the resources they need to meet the standards established in the Elementary and Secondary Education Act (ESEA).

High School Graduation Initiative. The Budget Request includes a new $50 million initiative for grants to school districts for effective, sustainable and coordinated strategies to increase high school graduation rates in the high schools (and elementary schools associated with them) that produce the great majority of high school dropouts.

Charter Schools Grants. To support increased public school choice, the Budget Request includes $268 million for Charter School Grants, a $52 million increase over the Fiscal Year 2009 level and the first step in the Administration’s commitment to double funding for the program over four years as part of its school reform strategy.

What Works and Innovation Fund. First authorized by the Recovery Act, the Budget Request builds on the $650 million in initial funding, requesting $100 million for the program in Fiscal Year 2010. This program provides competitive grants to school districts and partnerships between non-profits and LEAs that have made significant gains in improving student achievement or other areas, to expand or evaluate their work and to serve as models of best practices.

Higher Education

Pell Grants. Pell Grants assist low- and middle-income students with the cost of a college education, with awards based on each family’s financial situation. The Budget Request proposes a maximum Pell Grant of $5,550 for the 2010-2011 academic year, a $200 increase over the 2009-2010 level, and proposes automatic increases in the maximum grant by indexing it to a rate equal to the Consumer Price Index plus one percentage point. The Pell Grant is currently funded through a combination of mandatory and discretionary spending. The President’s Budget Request proposes to make the Pell Grant program mandatory.

Perkins Loan. The Perkins Loan program provides low-interest loans to undergraduate ($5,500 annual borrowing limit) and graduate students ($8,000 annual borrowing limit) on a need basis at approximately 1,700 institutions. The Budget Request proposes $6 billion per year in new Perkins Loan volume, six times the current loan volume, allowing the program to reach up to 2.7 million students at as many as 2,700 additional institutions. The loans would be serviced by the Department of Education. The entire proposal would save $3.2 billion over five years.

Federal Family Education Loan (FFEL). The Budget Request increases efficiency of the federal student loan programs by eliminating costly subsidies to private lenders and making all new loans through direct lending, using low-cost, stable capital sources and private-sector entities to process loans and repayments. The Congressional Budget Office estimates that this proposal saves approximately $94 billion over ten years, which will be reinvested in student aid by expanding Pell Grants.

College Access and Completion Fund. The Budget Request includes a new College Access and Completion Fund to build partnerships to improve students’ success in and completion of college, particularly students from disadvantaged backgrounds. The Budget Request includes $500 million in Fiscal Year 2010 and proposes a $2.5 billion, five-year initiative.

Serving Special Populations Within and Beyond the Classroom

Special Education State Grants. The Individuals with Disabilities Education Act (IDEA) requires States to provide a free appropriate public education to all children with disabilities. IDEA authorizes grants to states to help pay the additional cost of providing education and services to children with disabilities, ages 3-21. The Budget Request maintains funding for these grants at the Fiscal Year 2009 level of $11.5 billion. However, Congress invested $11.3 billion in Special Education State Grants in the Recovery Act, much of which will be available in Fiscal Year 2010, providing for a real increase of billions of dollars in Fiscal Year 2010.

21st Century Learning Centers. The Budget Request includes more than $1.1 billion for 21st Century Learning Centers, which help communities establish or expand extended learning opportunities for students, such as before- and after-school programs.

Promise Neighborhoods. The Budget Request includes a new initiative to provide grants to non-profit, community-based programs to develop plans for neighborhood programs modeled after the successful Harlem Children’s Zone. These programs would combat the effects of poverty and improve outcomes for children from birth through college. The Budget Request includes $10 million for this new program.