Higher Education Fares Well in the 105th Congress
by Edward Abrahams and Micheline Murphy-McManus
The 105th Congress adjourned on October 21 after bringing a contentious
appropriations process to a close. Congress passed only five of the thirteen
Fiscal Year 1999 (FY1999) appropriations bills as free standing legislation,
and the eight remaining appropriations bills were included in a massive
omnibus bill (HR 4328). These appropriations measures, summarized below,
provide funds to the agencies that support critical university-based programs
and research. In addition to these important spending bills, Congress also
passed the reauthorization of the Higher Education Act, an extensive piece
of legislation addressing a range of issues that impact Penn's missions
of teaching, research, and service. In general, federal programs upon which
the University relies fared well in an environment that was particularly
supportive of university research.
Congress increased the research budgets that support critical innovation
at our nation's universities, including the University of Pennsylvania.
Last year Penn's faculty received $278 million to fund federally-sponsored
research projects, and this year it is expected that the University's federal
funding for research will increase to over $320 million, an increase of
15 percent. Last year Penn ranked tenth in the nation in federally-funded
research and third in total National Institutes of Health (NIH) funding.
Federal investment in research enjoys bi-partisan support. Such funding
is viewed widely as a wise investment in better health, economic development,
and international competitiveness. Total federal support for research and
development (R&D) for Fiscal Year (FY) 1999 is expected to exceed $80
billion for the first time in history, for a total of $80.2 billion, 5.3
percent more than FY 1998. Of that amount, a relatively small portion, $17.5
billion, supports university-based basic research.
In keeping with the current favorable climate for research, the 105th
Congress gave a big boost to agency research budgets, especially the NIH
and the National Science Foundation (NSF), the two largest sources of funds
for Penn faculty. Every major R&D agency, except NASA and the Department
of Commerce, received increases well ahead of the expected 2.0 percent inflation
rate. This is good news indeed especially in the context of generally flat
federal budgets for research since 1986. Sizable increases at NIH and NSF
in FY 1999's budget suggest that Washington regards basic research as a
measure of "our strength as a nation," as President Rodin stated
last spring in testimony before the Senate Subcommittee on Science, Technology,
- The FY 1999 individual agency boosts included:
- National Institutes of Health (NIH): The NIH research budgets
received the largest dollar increase in history, a nearly $2 billion or
14.1 percent increase in its R&D budget to $14.9 billion. The NIH overall
was allocated $15.6 billion for FY 1999, putting the NIH budget on a course
toward the bipartisan Congressional goal of doubling NIH's budget in five
years. The Department of Health and Human Services, which funds NIH, awarded
approximately $208 million to University of Pennsylvania research projects
in FY 1997.
- National Science Foundation (NSF): NSF received $2.8 billion
for its R&D budget in FY 1999, $216 million or 8.4 percent more than
FY 1998. The NSF awarded Penn research projects nearly $22.6 million for
- Department of Energy (DOE): DOE received $7 billion for its
R&D programs, an increase of $714 million or 11.4 percent. The DOE
budget contains large increases for numerous programs across DOE's three
missions in energy, science, and defense. DOE awarded approximately $9.4
million to University of Pennsylvania research projects in FY 1997.
- Department of Defense (DOD): The DOD has an R&D budget of
$38.5 billion in FY 1999, a $1.1 billion or 2.9 percent increase over last
year. The DOD awarded approximately $10.7 million to University of Pennsylvania
research projects in FY 1997.
- Department of Education: The Department of Education has an
R&D budget of $231 million in FY '99, a 10.7 percent increase over
last year. The Department awarded approximately $16.2 million to Penn research
projects for FY 1997.
- National Endowment for the Humanities (NEH): The NEH was level-funded
at $110.7 million for FY 1999.
Reauthorization of the Higher Education Act
The Higher Education Act (HEA), first enacted in 1965, authorizes most
federal student-aid programs and contains numerous regulations that apply
to colleges and universities. The reauthorization of the law, which is required
every five years, becomes an occasion for Congress to examine its policies
regarding higher education generally. This year was no exception. The
Higher Education Act Amendments of 1998, signed into law by President
Clinton on October 7, contain many important provisions impacting colleges
and universities. The following are some of the changes important to the
higher education community:
- Student Financial Aid. By providing grants and loans to needy
students and families, HEA strives to make higher education accessible
to everyone, regardless of their ability to pay tuition. A recent report
issued by the Education Resources Institute and the Institute for Higher
Education Policy indicates that, with the exception of relatively small
increases in the Pell program in the past two years, the real value of
financial aid grants has declined substantially over the past twenty years.
Because the real value of federal aid dollars has declined, a greater commitment
from the federal government for student financial aid is necessary to make
college accessible to all students.
- Reauthorization of HEA this year included favorable treatment of student
aid programs. The Act authorizes an increase in the maximum Pell grant
to $4,500 for 1999-2000, a 4.2 percent increase, and provides $619 million
in funding (an 0.8 percent increase) for the campus-based student aid programs,
which include the Supplemental Educational Opportunity Grant (SEOG), College
Work-Study, and the Perkins Loan programs. These programs are a particularly
effective means of assisting students from low and moderate income families
to attend Penn and many other colleges and universities in the Commonwealth.
In addition, the legislation also lowers the interest rate that borrowers
pay on their student loans to 6.8 percent from 7.6 percent while students
are in school, and to 7.46 percent from 8.25 percent once they are in repayment.
Projections show that this interest rate reduction could save a student
with a debt of $20,000 about $1,000 over the life of the loan. Last year
Penn students received about $10 million in federal grants (including Pell,
SEOG, and federal work-study), and borrowed another $100 million in federal
- Graduate Education. The Graduate Assistance in the Areas of
National Need (GAANN) Program and the Jacob K. Javits Fellowship Program
are the only federally-funded graduate scholarships through the Department
of Education. By identifying the best students in the country in the humanities,
arts, and social sciences, the Javits Program remains one of the few free-standing
sources of support for graduate education. The GAANN Program supports students
in areas of national need such as the sciences, engineering, foreign languages
and area studies. The HEA amendments maintain the current levels of funding
for these important programs. In addition, the law establishes the Thurgood
Marshall Legal Education Opportunity Program to provide support to minorities
attending law school.
- Voluntary Early Retirement Incentives. The HEA amends the Age
Discrimination in Employment Act (ADEA) to clarify that tenured faculty,
whose principal retirement plan is a defined contribution plan, are permitted
to have the same kind of age-based early retirement incentives already
available to other employee groups.
- New Crime Reporting Requirements. The HEA extends the list of
crimes that colleges and universities must report to include manslaughter
and arson, and expands the category of "hate" crimes. In addition,
among other requirements, the campus crime provisions define "campus,"
for crime reporting purposes to include: buildings or property owned or
controlled by an institution within the same reasonably contiguous geographic
area; property within the same reasonably contiguous geographic area but
controlled by another person; and all public property that is adjacent
to a facility owned or controlled by the institution.
- Other Reporting Requirements. The Higher Education Act requires
universities to provide data annually to the Department of Education regarding
tuition, fees, and financial assistance as well as expenditures and revenues
from and for intercollegiate athletics. The Act also permits, but does
not require, disclosure of information regarding violations of alcohol
or drug-related laws or institutional policies as well as the names of
students who violate campus codes of conduct regarding crimes of violence
and serious offenses.
Dr. Abrahams is the Assistant Vice President for Federal
Relations at the University, and Ms. Murphy-McManus is a Policy Analyst
for Federal Relations.
Almanac, Vol. 45, No. 15, December 15, 1998
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