Risk-sharing, apprenticeships in the president’s budget

While The Trump administration’s 2020 budget proposal calls for deep cuts to discretionary spending overall, for postsecondary education it would continue to focus on efforts to improve career preparation, especially on the career and technical education (CTE) side.

But what particularly pops out from the proposal is its call on higher education institutions to share more of the financial risks of federal student loans.

“Some postsecondary programs fail to deliver a quality education that enables students to repay federal student loans — leaving borrowers and taxpayers holding the bill,” according to a summary of the budget from the administration. “A better system would require postsecondary institutions accepting taxpayer funds to share a portion of the financial responsibility associated with student loans.”

It did not include further details, but noted that the administration plans to work with Congress on these issues. Last month, Senate Republican leaders said that they also would like to see more accountability among colleges and universities to ensure students are not burdened with student loans that they cannot repay.

Focus on CTE and apprenticeships

The budget proposal for fiscal year 2020 released on Monday would level fund CTE state grants at $1.3 billion but increase funding for CTE national programs by $12.6 million, to $20 million. The latter programs help states innovate and modernize CTE programs, especially those focused on science, technology, engineering and math.

Several higher education programs would be cut or eliminated. The budget plan would slash funding for adult education state grants by $156.1 million, to $485.8 million. But it would increase funds for national leadership activities by $60 million for a fast-track pre-apprenticeship program that would focus on helping more adults meet the basic entrance requirements for apprenticeship programs. The administration also calls for legislation to double fees collected through the H-1B visa program and use 15 percent of the revenues toward job training grants through the U.S. Labor Department to support apprenticeships.

Along the same lines of helping workers more quickly get the skills they need for available jobs, the administration wants to open Pell grants for high-quality, short-term programs that result in a credential, certification or license in a high-demand field.

“This would help more Americans access education and training programs that can equip them with skills to secure well-paying jobs in high-demand fields more quickly than traditional two-year or four-year degree programs,” according to the summary.

Revamping student loans

The administration also wants to streamline income-driven repayment plans into a single plan that would cap borrowers’ monthly payment at 12.5 percent of discretionary income. Any remaining balances for undergraduate borrowers would be forgiven after 15 years. However, the administration would nix the public service loan forgiveness program and subsidized loans.

As part of the revamping, the Education Department would receive $1.8 billion to modernize student loan servicing. That effort would help increase awareness and understanding of federal student aid opportunities and responsibilities, improve operational flexibility, and enhance cost and operational efficiency, according to the administration.

“These proposals would support congressional efforts to modernize and reauthorize the Higher Education Act to be responsive to the needs of both students and employers,” the administration said in its outline.

It added that the budget also proposes to reform the federal work study program to “support workforce and career-oriented training opportunities for low-income undergraduate students, not just subsidized employment as a means of financial aid, in order to create more available pathways to high-paying jobs.”

The program would allocate funds to schools based, in part, on enrollment of Pell recipients.

“Schools could fund individual students through subsidized employment, paid internships, or other designs, as long as the placements were career or academically relevant,” the summary said. “Schools could also serve groups of students through programs and initiatives that expose students to or build their preparedness for careers.”

About the Author

Matthew Dembicki
is editor of Community College Daily and serves as publications director for the American Association of Community Colleges.