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Budget Reaction From Secondary and Higher Ed.

Proponents of high school redesign and the higher education community are digesting elements of President Barack Obama's 2014 budget that propose new programs designed to encourage innovation and better outcomes for students. While many are encouraged by efforts to funnel new money into grants to improve secondary and postsecondary education, others are skeptical and feel the document may not be more than a wish list in the current contentious political environment.

For the next fiscal year beginning in October, the administration would like to have $71.2 billion to spend on education — a 4.6 increase over fiscal year 2012. (See my colleague Alyson Klein's K-12 blog for complete coverage.)

As previewed in the president's State of the Union Address, the new budget contains $300 million to fund a competitive-grant program for high school redesign. The focus is on providing relevant, project-based instruction that emphasizes science, math, engineering, and technology. Priority will be given to rural and high-poverty districts. The grants are envisioned as partnerships between districts, and either non-profits, higher education institutions, or business.

The National Association of Secondary School Principals issued a statement of support for overall attention to education in the president's budget, but expressing dismay at the competitive grant approach, over formula funding, suggesting that it promotes inequity. The group also has concerns about the emphasis on STEM education, calling it "one priority too many," coming at the expense of needed literacy efforts.

Former West Virginia Gov. Bob Wise, who serves as president of the Alliance for Excellent Education in Washington, applauded the budget and the use of competition to spur new high school models. He said approach will encourage educators work together with employers to align high school expectations with the demands of college and career.

"The proposal highlights the importance of personalization and work-based learning," said Wise in a statement released yesterday. "Giving students the opportunity to apply what they learn in the classroom to the real world will increase student engagement and graduation rates."

While Wise and others are hopeful new education dollars with be found, he acknowledged the budget is about aspirations and that the likelihood of the parties agreeing on the funding proposals is uncertain.

The budget includes $659 million for School Turnaround Grants, many of which could go to secondary schools because they are among the lowest-performing, some educators anticipate. The president would also like to redirect $180 million to STEM education by consolidating 90 existing programs.

On the higher education front, the 2014 budget addresses college costs and completion with a $1 billion Race to the Top competition for institutions that demonstrate policies and practices to improve student outcomes without raising tuition. Another $260 million establish a new First in the World fund to encourage development of innovations that improve higher education productivity and $10 billion more in campus-based aid programs, including work study.

Investment would continue in Pell Grants for 9 million low-income students under the president's plan and 11 million students would likely take out federal student loans.

But this year's budget contains a major change in the cost of borrowing for school, basing the rate on new federal student each year to market interest rates. This summer, rates on subsidized interest loans are slated to go up to 6.8 percent, from 3.4 percent. The administration also proposes limiting repayment to 10 percent of borrower's discretionary income.

Student advocacy groups are disappointed that rates would fluctuate, offering no protection to students when rates climb. "Without a cap, this proposal falls short of the comprehensive reform to student loans we need," said a joint statement by the Young Invincibles, US PIRG, Rock the Vote and others. "We need a solution that keeps rates affordable with the risk of spiking the cost of college for future generations. Students have never taken out federal student loans without a cap on how high interest rates can go."

Campus Progress, part of the Center for American Progress, also reacted with concern over the long-term implication of changes to a market-based rate.

Critics of the administration, such as Neal McCulskey of the libertarian Cato Institute, maintain Race to the Top programs have been big on promises, small on outcomes, and huge on coercion to adopt national curriculum standards. He also argues that maintaining a "strong" Pell Grant program is part of the tuition hyperinflation problem, not the solution.

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