Statement by AASCU President Dr. Muriel Howard in Response to President Obama’s Fiscal Year 2014 Budget

This week, President Obama submitted his administration’s fiscal year 2014 (FY 14) budget to Congress. Overall, it is clear that the president recognizes the state’s role in higher education funding and its effect on tuition at our colleges and universities. As such, AASCU is pleased with a number of tenets of the proposed budget, many of which address the financial concerns of our students before and after graduation.

We applaud the president for not proposing significant changes to the Pell Grant Program, a vital resource for low-income students to help them finance a college education. Because Pell Grants are the foundation of a student’s financial aid package, however, it is concerning that the president did not specifically address how Pell will be paid for in the out years.

We are pleased with the administration’s Pay as You Earn program, another variation of an income-based repayment plan (IBR). Further, we commend President Obama’s proposals to make payment of student loans manageable, and that the president is proposing to eliminate taxation of the amount forgiven. This would bring student loan debt under IBR in line with the tax treatment of other student loan forgiveness programs, and is one of AASCU’s key priorities set forth in our Public Policy Agenda.

Concerning interest rates, we are pleased to see the president’s proposal tied to the current market, however, there is no proposed cap on the percentage rate. While the proposed rate would keep rates low in the short-term, based on the budget assumptions, the student loan interest rate would increase to a level higher than the current 6.8 percent.

Conversely, we are concerned with the president’s proposal to eliminate funding for the Teacher Quality Partnership program, as well as the proposed elimination of the TEACH Grant. Higher education plays a critical role in teacher preparation, and must be recognized and funded as such.

AASCU is supportive of policies that strive to achieve a balanced deficit reduction and that work to eliminate the cuts imposed by the sequester in the interests of sustaining a solid investment in the nation’s future.