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19. Department of Education


Highlights of 2002 Funding

  • Provides a $4.6 billion, or 11.5 percent, increase in total budget authority for the Department of Education.
  • Corrects for the distortion of advance appropriations, provides a $2.5 billion, or 5.9 percent increase, for Education Department programs, the highest percentage increase of any Cabinet agency, consistent with the priority the President has placed on education.
  • Supports a $1.6 billion increase for elementary and secondary education initiatives announced as part of the President's No Child Left Behind proposal. These reforms will result in increased accountability for student performance, reduced bureaucracy and greater flexibility, a focus on proven programs, and more choices to empower parents.
  • Provides a $340 million increase in key elementary and secondary education programs in other Federal agencies, resulting in a 10-percent increase for K-12 initiatives.



Elementary and Secondary Education: Today, nearly 70 percent of inner city fourth graders are unable to read at a basic level on national reading tests. Our high school seniors trail students in most industrialized nations on international math tests. And nearly a third of our college freshmen find they must take a remedial course before they are able to even begin regular college level courses. The President is proposing a bold and ambitious approach to build a culture of achievement in elementary and secondary education. His blueprint for reauthorizing the Elementary and Secondary Education Act places accountability for improved achievement at the center of K-12 reforms. The budget provides funds to develop annual assessments of students, help States establish strong accountability systems, and expand State participation in the National Assessment of Education Progress the Nation's Report Card so that parents, teachers, and policymakers can ensure that students are improving.

19–1. Department of Education, 10.6% Average Program Level Annual Growth, 1998–2002

In addition to focusing on accountability, the President's Budget will build a solid foundation for learning by supporting key elements of reform. It provides nearly $1 billion to ensure that children can read when they enter third grade. It includes $2.6 billion for States to improve teacher quality through high-quality professional development, aggressive recruitment, and innovative retention practices. The proposal will enhance school choice with $150 million to help charter schools acquire, construct, or renovate facilities and provides alternatives for children in chronically failing or dangerous schools. The budget also increases by $62 million Impact Aid construction assistance for schools serving large numbers of military dependents or Indian children, and provides $25 million for character education.

The President's Budget increases local flexibility by streamlining two complementary programs Safe and Drug-Free Schools and Communities and 21st Century Community Learning Centers so that school districts can support drug and violence prevention activities as well as after-school programs in safe, enriched environments. It also reduces administrative burden by streamlining more than a half-dozen education technology programs into one flexible grant.

To provide additional funding to States to meet their most pressing needs in elementary and secondary education including special education States would be given the flexibility to redirect funds previously provided for the school renovation program, first funded at $1.2 billion in 2001.

Higher Education: The cornerstone of the Administration's higher education policy is an additional $1 billion for Pell Grants, increasing the maximum award for all students to provide more need-based grant aid to low-income college students. Department of Education funding for Historically Black Colleges and Universities, Historically Black Graduate Institutions, and Hispanic-Serving Institutions would increase 6.4 percent over 2001 as the first installment toward the President's goal of increasing these programs 30 percent by 2005. The budget also includes a mandatory-spending higher education initiative: expanding the existing teacher student loan forgiveness program to provide greater benefits for math and science teachers.

Disability Programs: The budget includes increased funds for special education to help States and school districts meet their obligations under the Individuals with Disabilities Education Act. As part of the President's New Freedom Initiative, the Education Department's budget also helps individuals with disabilities access the best assistive technologies of today, invests in research and development so even better technologies will be available in the future, and promotes telecommuting opportunities for individuals with disabilities.

Redirected Resources

The budget proposes to redirect resources previously provided for school renovation, first funded in 2001 at $1.2 billion. In view of the need to provide more resources for priority programs, the budget proposes to allow States increased flexibility to reallocate their 2001 funds among three authorized activities: special education, school renovation, and technology. For 2002, the budget proposes to redirect funds to help States meet their most pressing needs, including special education, help for low-performing schools, and accountability reforms.

The budget realizes $433 million in savings, to be redirected to higher priorities, by discontinuing all one-time projects from 2001 and eliminating funding for short-term activities whose purposes have been met.

Potential Reforms

The Department of Education's student financial assistance programs have been on the General Accounting Office's High Risk List since its inception in 1990. In the coming year, the Department will work to correct longstanding problems in its financial management and student aid operations, and will seek to minimize student loan defaults.

Financial Management: Since 1996, when independent audits were first required, the Department has received only one clean audit, and that was in 1997. Independent audits of the Department's records have repeatedly found major financial management deficiencies. These failed audits indicate a potential for improper use of government resources. Through investments in updated financial reporting systems, as well as better oversight and other management improvements, the Department expects to significantly increase the reliability and accuracy of its financial data. By 2002, the Department will have implemented and launched a new general ledger system and asset tracking software that will address many of the Inspector General's longstanding concerns about Education's financial management. These changes should enable the Department to earn clean audit opinions in the future.

Student Aid Management: To correct perennial deficiencies in the Department's student aid operations, the Higher Education Amendments of 1998 created the Federal Government's first performance-based organization, with the goal of modernizing student aid delivery and management. Student aid modernization is dependent on better use of efficient technologies, simplification of business processes, and seamless coordination with myriad partners in the higher education community. The Administration will ensure that the more than $50 billion in annual student aid assistance is provided in a timely and financially-prudent manner.

Default Prevention: Over the last eight years, outstanding student loan defaults have doubled from $12 billion to $25 billion, resulting in significant costs for taxpayers. During the next year, the Department will work to minimize loan defaults through continued counseling of students on their repayment responsibilities, improved early identification of problem loans, and implementation of loan management "best practices."

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