President Obama's Budget Comes Out Strong on Education

In reading some of the coverage of Obama's budget, it appears that while health care and energy reforms both received a large, and expected boost, the surprise story today is how much support Obama included for education. Here's some info on what's included from a backgrounder put out by the Education and Labor Committee:

FEDERAL STUDENT LOANS: There are two types of federal student loans: the Direct Loan Program (where loans are made directly to students by the government) and the Federal Family Education Loan Program (when loans made by private lenders are guaranteed by the federal government). Both types of loans carry the same interest rates and terms for students, but the Direct Loan program is less expensive and yields significant taxpayer savings.

President Obama proposes that, beginning in 2010-2011, all new student loans would be originated through the Direct Student Loan program. The Office of Management and Budget estimates this would save taxpayers $24.3 billion over five years and $47.5 billion over ten years by making the program more efficient.

PELL GRANT SCHOLARSHIPS: The President also proposes to index the maximum Pell Grant scholarship award to the Consumer Price Index plus one percent, which will better reflect the economic realities students and families face.

President Obama has already enacted a substantial investment in k-12 and higher education in his economic recovery plan, including a significant $500 increase in the Pell Grant scholarship for students next year. When combined with other increases enacted during the 110th Congress, by 21010 the maximum Pell Grant award will have increased by $1,500 – or 37 percent – since Democrats regained control of the Congress.