1. Holding Onto the Money: AACC Legislative Update March 10, 2011 David Baime AACC Senior VP for Government Relations & Research Jim Hermes AACC Director of Government Relations Laurie Quarles AACC Legislative Associate

2. AACC Legislative Update Overview of New Congress Status of FY 2011 Appropriations Obama Administration’s FY 2012 Budget WIA Reauthorization TAA CCCT Grant Program Gainful Employment Regulations Tax Issues Regional Community College Summits

3. Overview of 112 th Congress 87 New Republican House Members—More than 1/3 of Caucus Laser-Like Focus on Cutting Spending by House Republicans—New Members Not Invested In Status Quo Obama and Dems Forced to Respond to New Agenda

4. Budget Issues Focus So Far Limited to “Non-Security Discretionary Spending” –About 1/6 th of Budget Earmarks Gone for Next Two Years and Maybe Longer Major Battles Coming and Legislative Calendar Will Be Dominated and Obstructed by Funding Issues Government Shutdown Seems Possible

5. Pell Grant Program More Important Now Than Ever as a Result of Tuition Increases/State and Local Cuts > 3 Million CC Beneficiaries > $9 Billion Received by CC Students—32% of Total For-Profit Presence—1/4 of all Funding Program Cost Doubled Over Last Four Years; Recipients Up 42% Program Costs of Deep Concern to Both Parties

6. FY 2011 Labor-HHS-Education Appropriations No Final FY 2011 Appropriations Bills Five Continuing Resolutions (CR) to Date 111 th Congress Approved CR through March 4 House Passed H.R. 1 on February 19 – Massive Cuts Congress Approved Short-Term CR on March 2; Expires March 18; Cut $4 Billion including LEAP Senate Dems Introduced Full-Year CR March 4

7. FY 2011 Labor-HHS-Education Appropriations—House House Full-Year CR, H.R. 1 ▫Cuts FY 2011 discretionary programs by $61 billion ▫Slashes Pell Grant max from $5,550 to $4,705 ▫Eliminates funding for SEOG ($ 757.5 M) ▫Cuts TRIO from $853 M to $828 M ▫Cuts GEAR UP from $323 M to $303 M ▫Eliminates funding for Tech Prep ($102.9 M) ▫Cuts funding for Title III & Title V Programs

8. FY 2011 Labor-HHS-Education Appropriations—House H.R 1, Cont’d ▫Cuts all new funding for WIA’s Adult, Dislocated Workers and Youth formula programs ▫Eliminates nearly all WIA national discretionary grants ▫Rescinds $175 M in unobligated Dislocated Worker Reserve and Emergency Grants ▫Cuts NSF funding and a host of other discretionary programs ▫Eliminates earmarks

9. FY 2011 Labor-HHS-Education Appropriations—Senate Senate Democrats’ FY 2011 CR ▫Cuts spending by $6.5 billion & eliminates earmarks ▫Provides $11 B more than H.R. 1 for education, including $5.7 B to address Pell Grant shortfall ▫Preserves Pell Grant max at $5,550 ▫Maintains current SEOG funding ▫Restores funding for TRIO, GEAR UP, and Title III and Title V programs (FY 2010 levels)

10. FY 2011 Labor-HHS-Education Appropriations—Senate Senate Democrat’s FY 2011 CR ▫Preserves funding for WIA but eliminates funding for the Career Pathways Innovation Fund for FY 2011 and rescinds FY 2010 funding ▫Cuts NSF but by $284 million less than H.R. 1 cuts NSF

11. FY 2011 Appropriations On March 9, the Senate voted on two competing spending bills for FY 2011 ▫The House-passed CR, H.R. 1, was rejected 44-56 (All Democrats voted against; 3 conservative GOP Senators also opposed) ▫The Senate Democrats’ alternative also failed to secure the required 60 votes for passage ▫Vote 42-58 with 10 Dems voting against Anticipate another short-term CR but final deal

12. Obama’s FY 2012 Budget Unveiled February 14 Freezes Overall Non-Security Discretionary Spending Preserves Pell Grant maximum at $5,550, But at a Price ▫Would eliminate the summer Pell ▫Would end the payment of in-school interest subsidy on graduate /professional student loans

13. Obama’s FY 2012 Budget Other Important Programs: ▫Most student aid programs level funded ▫Perkins CTE programs would be cut by 21% (including the elimination of Tech Prep) ▫Modest increase for adult education ▫No funding for CPIF ($125 M) ▫Some cuts in other DOL training programs ▫13% increase for NSF, increased focus on community colleges

14. Workforce Investment Act (WIA) Reauthorization Legislation Not Yet Introduced ▫Senate committee staff continue to work on bill, say draft will be ready soon ▫Funding cut in H.R. 1 creates complications for Republican authorizers ▫Recent reports used to attack system Basic Message: Don’t De-Fund, Reauthorize!

15. Community College And Career Training Program (TAACCCT) / Trade Adjustment Assistance (TAA) Extension TAA Program Expanded in Stimulus Bill ▫Service industries included ▫Training funds increased ▫TAA for Communities (including TAACCCT program) established ▫Expanded program set to expire at end of 2010; extended to February 12 at the last minute Further Extension Has Been Stymied ▫House proposed legislation would pay for extension by cutting $238 billion from TAACCCT program in FY 2014 ▫Republican opposition to program

16. Community College and Career Training Program $500 Million per Year for Four Years Under Trade Adjustment Assistance Act. ▫Funded by 2010 Health Care and Education Reconciliation Legislation. Minimum of 0.5% of funds to institution(s) in each state, but no state distribution per se. ▫Funds not limited to serving TAA recipients but design must reflect their needs.

17. Community College And Career Training Program Individual Competitive Grants Start at about $2.5 Million over Three Years, Consortia Grants Higher ▫Institution may be fiscal agent on only one grant per year, but may partner in other consortia ▫Reform and innovation emphasized—no simple program expansion Uses of Funds ▫Curriculum development, equipment, faculty time, etc. ▫No real property; renovation of existing property may be possible ▫Tuition charges not envisioned in early phase of grants Strong Evaluation Component

18. Gainful Employment Regulations Effort by ED to Crack Down on Programs Leaving Students Unable to Retire Debts Greatest Impact on For-Profit Colleges but CC Programs Impacted Too Extraordinary Lobbying Effort by For-Profit Colleges In Opposition Final Regulation Delayed ▫Kline amendment blocking implementation passed House overwhelmingly; Senate pending

19. Program Integrity Regulations Final Version Published October 29 New Requirements Relating to “State Authorization” of Distance Education of High Concern—AACC Has Written to Hill and is Working to Modify/Annul New “Credit Hour” Regulatory Definition Also of Concern

20. Tax Issues (AOTC) AOTC Extended for Two Years at Close of 111 th Congress—Spend Now, Pay Later Far Preferable to Hope Scholarship: ▫Larger ($2,500) credit geared to low-cost colleges  100% of first $2,000 in tuition, 25% of next $2,000 ▫Covers “course materials.” ▫40% refundable. Obama Wants to Make AOTC Permanent

21. Tax Issues—Section 127 Section 127 Provides up to $5,250 of Tax-Free Educational Assistance to Incumbent Workers. ▫Huge benefit to individuals attending community colleges Enacted Legislation Extends Sec. 127 for 2 Years; Big CC Victory

22. Regional Community College Summits Department of Education Holding 4 Regional Summits: ▫Feb. 28—Community College of Philadelphia ▫March 9—Lone Star Community College, TX ▫March 23—Ivy Technical College, Indianapolis ▫April 15—San Diego Community College Breakout Sessions: ▫Transitions to Postsecondary Education; Developmental Education; Business Partnerships; College Affordability; Completion “Virtual Summit” Tentatively Set for April 27

23. Contact Information David Baime ▫202-728-0200 x224, dbaime@aacc.nche.edudbaime@aacc.nche.edu Jim Hermes ▫202-728-0200 x216, jhermes@aacc.nche.edujhermes@aacc.nche.edu Laurie Quarles ▫202-728-0200 x249, lquarles@aacc.nche.edulquarles@aacc.nche.edu