U.S. Education Department Increases Spending in 2010 Budget, Some Unions are Concerned

The FY 2010 budget increased financial resources for Education Department

President Barack Obama’s FY 2010 budget proposal increased the Department of Education’s total spending by 2.8 percent to $46.7 billion to encourage reform in schools and cut wasteful programs, but many educational leaders remain concerned.

“This budget makes tough decisions, investing in the programs that will deliver results in student learning while ending ones that aren’t working,” Secretary of Education Arne Duncan said in a press release from the Department of Education.

The proposed budget eliminates 12 programs that the Education Department deemed ineffective, including the $66 million Even Start Family Literacy Program designed to increase literacy in needy families and single parents.  The government saved $550 million by cutting these 12 programs.

“Some programs may have made sense in the past – but are no longer needed in the present,” Obama said in the Washington Post.

Education Week reported that despite increases in funds for Title I School Improvement Grants and Title I Early Childhood Grants, the total amount of money given to districts in Title I grants decreased by 10.4 percent.

“The dollar amounts that districts build [their budgets] off of has been cut in the president’s budget,” Mary Kussler, assistant director of advocacy for American Associate of School Administrators, said.  “Districts will have to rethink their [stimulus] funds to potentially covering a short fall in Title I, lessening the potential impact of the [the stimulus].”

The MetroWest, based in Framingham, Mass., reported that education administrators of Massachusetts are concerned about the long-term needs of school districts.  “There are absolutely no guarantees what our situation will look like in fiscal year 2011,” Dick White, assistant superintendent of Pembroke Schools in Pembroke, Mass., said.

Tom Scott, the president of the Massachusetts Association of School Superintendents, said that school administrators need to determine how much to spend and how much to save.

Administrators in Los Angeles sought answers to similar questions after the initial release of stimulus money from the American Recovery and Reinvestment Act (ARRA).  State district officials wanted to spread the money between two years, while teacher unions wanted to use the funds immediately to save jobs.

The LA Times reported that Duncan said he agreed with state officials on this issue. “We want these investments to save hundreds of thousands of teachers’ jobs around the country, but also to drive real reform,” Duncan said.

The 2010 budget increased the Teacher Incentive Fund from $97.3 million to $517.3 million, in addition to the $200 million already provided by the ARRA for performance based pay.

“We would have gotten just as much change on school improvement under the stimulus if we had dropped 30 million $100 bills over the 50 states and said ‘do good things,’” Charles Barone, the director of federal policy for Democrats for Education Reform, said.

In the Washington Post, lobbyist Marc Egan of the National Education Association (NEA) said the union preferred to use funds for the Improving Teacher Quality State Grant.

“It should be used to focus on the practice of teaching and rewarding national board certification,” Dennis Van Roekel, president of the NEA, said.

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The Washington Post reported that unions are concerned despite President Obama’s promise to include teachers in the process of developing merit based pay programs.

“The administration is showing that it’s serious about paying teachers for performance,” Michael J. Petrilli, vice president of the educational think tank Thomas B. Fordham, said.  “Now the question is how ‘performance’ is defined.”

The budget proposed rewarding extra pay to teachers who increase classroom performance and to those who take on leadership roles, especially in areas of high poverty.  In the Washington Post, Duncan said that he hoped the money would encourage more teachers to work with struggling schools.

“We’re really trying to focus with laser-like focus on the lowest performing schools around the country,” Duncan said.

To show the importance of education, the United Way of America together with the American Human Development Project created the “Common Good Forecaster,” a website that shows how changing levels of education affect state social factors like income and health.

Education reform is among the top priorities of the Obama Administration, with the goal of raising high school graduation rates and making college more affordable.

“We are doing everything that we can to create jobs and get our economy moving while building a new foundation for lasting prosperity – a foundation that invests in quality education, lowers health care costs and develops new sources of energy powered by new jobs and industries,” Obama said.

Economy Affects College Decisions

High school seniors factored finances into selecting a college this year  more than ever when choosing a college by May 1st.

“We just don’t have the money,” Michael Parra a junior at Wakefield High School said in an article in the Washington Post.

Students like Parra weighed the pros and cons of their top choices, but the biggest determinant is which college offers the largest financial package.

“It’s increased my awareness of money and finances and what that all means.  I’m going to be carrying this with me for however many years,” Mary Claire Erksine a senior at Albert Einstein High School said.

What students and parents often forget is that financial aid packages are made up of mostly loans, and not scholarships.

According to the NY Times, the private student loan program totals $20 billion dollars, one third the size of federal lending programs.  Today, interest rates can range anywhere from seven to 12 percent.  Private loans average at 11 percent, while federal Stafford loan sit just below seven percent.

In 2008, Sallie Mae distributed $6.3 billion in private loans.  Sallie Mae is one of the top three leaders in the private loan industry, next to Chase and Citibank.

“Although we could narrow our range of private loan interest rates and also narrow our lending, we feel strongly that we should serve as many students as we can,” Martha Holler a spokeswoman for Sallie Mae said.

The Project on Student Loans said that the average college graduate leaves college with at least $21,900 in loans.

“The difference of rates between secured and unsecured loans is higher than I’ve ever seen.  This is one further impediment to access to post-secondary education for all but the well-to-do,” Scott White the director of counseling services at Westfield High School said in the NY Times.

College funds across the nation were hit hard after the 40 percent stock market drop affected retirement funds and property values.  The NY Times reported that many parents are dealing with these changes by taking on second jobs or decreasing restaurant and medical visits.

To see how student loan lenders rank check out the ratings of top lenders created by the founder of Student Lending Analytics, Tim Ranzetta.