The President’s Federal budget request for the 2013 fiscal year was released earlier this week. It contained several important provisions that are expected to encompass the Student Financial Aid program, Federal research grants, and the overall higher education landscape. Among the proposed provision changes include:
- A 1.5% increase to the maximum Pell Grant award would occur. If the budget request is fulfilled, the maximum amount students would receive per year would rise to $5,635 from the previous amount of $5,550.
- Vastly increasing the accessibility and allocations related to the Federal Perkins Loan Program and shifting the responsibility of the administration of the loans to the Department of Education.
- Revisions to the allocation of campus-based aid to schools that:
- provide good value to students as indicated by whether students are able to find employment after graduating
- set responsible tuition rate policies
- admit and graduate higher proportions of low-income students
- Increase of $150 million (approximately 15%) to the Federal Work Study Program.
- A one year reprieve preventing the scheduled increase of subsidized direct loans from 3.4% to 6.8%.
- Increases in the grant allocations to the National Science Foundation programs and other agencies that are charged with scientific research.
- Creating competitive grants designed to promote the development and innovation of more productive and effective college campuses. These grants coincide with the President’s directives that call for college campuses to implement more lean operating structures.
As these Federal budget provisions continue to develop, we will continue to provide updates on the key elements.
Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.
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