The University Record, February 13, 1995
Record Special Writer
While President Clinton's $1.6 trillion budget proposes to eliminate 130 programs and cut spending $144 billion over five years, the plan continues support for many of the programs which benefit the University. The budget holds the deficit essentially level and pays for the president's middle class tax package, one-third of which benefits higher education.
The University's federally sponsored research probably will receive a boost, as the budget calls for a 7 percent increase in the government's overall funding for academic research and development. The National Institutes of Health (NIH) would receive a 4.1 percent increase, while the National Science Foundation (NSF) would receive a 7.6 percent increase for research and related activities. The NIH funding would include a 5.4 percent increase for AIDS research.
Federal sponsorship is imperative for the University's research endeavors. Last year, 69.2 percent of the University's $385 million in research was sponsored by the federal government, including 39 percent NIH-sponsored research and 12.2 percent sponsored by the NSF.
The National Endowment for the Arts and National Endowment for the Humanities, as well as the Institute for Museum Services and the Corporation for Public Broadcasting, would continue to be funded at about the same levels.
Although the president's plan eliminates funding for 41 education programs, including the Harris and Javits graduate student fellowship programs and the research library programs, most other postsecondary programs, including the international programs, would be level-funded.
Student aid would be increased under the budget plan. The maximum Pell award would increase by 12 percent to $2,620 per year. The Pell Grant program would be restructured, restricting eligibility to degree-seeking students. Students in vocational, non-degree programs would receive skill grants through the Department of Labor.
The campus-based work study, supplemental grant and Perkins loan programs would be level-funded while the State Student Incentive Grant program would be reduced.
The Federal Direct Student Loan Program would be expanded to 80 percent of total loan volume by the 1996-97 academic year and to 100 percent of loan volume by 1997-98. The Department of Education indicates that this would save an additional $5.2 billion in outlays over five years. However, some in Congress are proposing to cap the program, which has been a success at the U-M, at 40 percent of national loan volume.
The Clinton budget provides for $63 billion in tax breaks, including tax deductions for families with children in college, and penalty-free withdrawals from individual retirement accounts to help pay for postsecondary education expenses.
In the coming weeks Congress will be detailing its plan for achieving goals that include $200 billion in tax cuts and balancing the budget by 2002.
The University's Washington, D.C., office has complete details on the budget. If you have specific questions, call the office, (202) 554-0578 or send e-mail to Tom Butts, Carolyn Jecks or Bob Samors.