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DEPARTMENT OF EDUCATION
Since 2001, the Administration:
• Reformed K–12 education through the No Child Left Behind Act, which is raising academic
standards for students, improving accountability in schools and States, and expanding
parental choice. No Child Left Behind funding has increased 34 percent since 2001;
• Aligned the Individuals with Disabilities Education Act with No Child Left Behind accountability
systems to improve the quality of education for students with disabilities and ensure that all
students achieve high academic standards;
• Reformed the Federal student aid programs to make them more cost efficient and targeted
additional aid to the neediest students, including 5.2 million Pell Grant recipients in 2006; and
• Assessed 89 programs using the Program Assessment Rating Tool and used the results to
guide budget decisions and programmatic reforms.
The President’s 2008 Budget:
• Proposes reauthorization of the landmark No Child Left Behind Act;
• Provides a $1.7 billion increase for schools in low-income communities, including a $1.2 billion
increase for the core Title I program and $500 million for schools in need of improvement;
• Requests $300 million to enable low-income students in low-performing schools to transfer
to a public or private school of their choice or receive intensive supplemental services;
• Increases the Pell Grant maximum award from $4,050 to $5,400 over five years, to help over
5.4 million low-income students access quality higher education each year; and
• Exercises spending restraint by terminating 43 low-priority or non-performing programs and
redirecting funds to priorities that will deliver better results for students and families.

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DEPARTMENT OF EDUCATION

FOCUSING ON THE NATION’S PRIORITIES
Reauthorizing the No Child Left Behind Act
The central goal of the 2001 No Child Left Behind Act (NCLB) is for all students to read and do
math at grade level or above by 2014. NCLB refocused Federal education programs on the principles
of stronger accountability for results, more choices for parents and students, greater flexibility for
States and school districts, and the use of proven instructional methods. NCLB is moving education
in the right direction. Test scores are rising, and in most States, the learning gap between poor and
non-poor students, and between black, Hispanic, and white students, is starting to close. In 2007,
President Bush will work with the Congress to reauthorize NCLB while maintaining the Act’s core
principles. Highlights of the President’s plan include the following:

Title I Funding Increases
Budget authority in billions of dollars
14
13
12
11
10
9

Title I funding will
increase by $5 billion,
or 59 percent, since
President Bush took office.

Helping Schools in Need of Improvement.
The Budget provides $500 million that, along
with over $500 million reserved from Title I,
will help improve schools that have not met
their NCLB student achievement goals for
at least two years, with a particular focus on
schools that have been low-performing for five
years or more. This funding will ensure that
States and school districts have the capacity
to turn around the schools that need the most
help.

8

Enhancing Opportunities for Parental
Choice. While the Administration expects
2001
2002
2003
2004
2005
2006
2007
2008
most schools in need of improvement to turn
Source: Department of Education.
around and meet their NCLB goals, some
schools will not be able to do so quickly. The
The 2008 Budget proposes a $1.2 billion increase for Title I, the
cornerstone NCLB program. With this increase, Title I will have
President’s Budget includes $300 million
increased by 59 percent since 2001.
for two new programs to offer educational
alternatives to low-income students in
low-performing schools. Schools that have been low performing for five years or more will be
required to offer Promise Scholarships, and competitive grants will be available to communities
willing to launch Opportunity Scholarships to further expand parents’ options. These scholarships
will help parents cover some of the cost of attending the public or private school of their choice or the
cost of intensive supplemental educational services, such as tutoring.
0
7

Reforming High Schools and Improving College Readiness. NCLB provides an important framework for transforming high schools in order to prepare students for college and the workplace. However, less than 10 percent of NCLB funds go to high schools, limiting the law’s current impact.
The Budget provides $13.9 billion for Title I, a $1.2 billion increase, which devotes new funds to
high schools in proportion to the number of low-income students they educate, while also increasing
funding for elementary schools. In addition, the Administration proposes to add two tests in two new
high school grades, including an assessment of college readiness. Together with the existing tests in
reading and math in grades 3–8 and once in high school, these assessments will help parents and
teachers know how their schools are performing across all grades and how well students are being
prepared for success after graduation. The Budget provides $412 million for these State assessments.

THE BUDGET FOR FISCAL YEAR 2008

53

Ensuring our Future Competitiveness. To
remain competitive in the global economy,
every high school graduate needs strong
analytical skills in mathematics and science.
In support of this objective, the Budget
provides a $365 million increase for math
and science education programs as part of
the President’s American Competitiveness
Initiative (ACI). ACI includes an array of
research and education programs that focus
on improving the Nation’s long-term economic
competitiveness. A $250 million Math Now
proposal would support a new math program
to help elementary school teachers prepare
President Bush and Secretary Spellings visit with a teacher and students
at Parkland Magnet Middle School for Aerospace Technology, April 18,
students for rigorous coursework and a new
2006, in Rockville, Maryland.
middle school program to identify and provide
targeted services to boost achievement of middle school students who are not proficient in math.
Other ACI investments include a $90 million increase for the Advanced Placement program to train
70,000 teachers over five years, with a focus on math and science, and $25 million for an Adjunct
Teacher Corps to help recruit 30,000 professionals, especially professionals from technological fields,
over the next eight years to teach in high-need schools.

Providing Access to and Raising Quality in College Education
Access to quality postsecondary education for America’s students is crucial to U.S. economic
prosperity.
In 2008, the Federal Government will provide nearly $91 billion in financial
aid to 10.4 million students to help pay for college.
In September 2006, the Secretary’s
Commission on the Future of Higher Education offered recommendations to improve the Nation’s
postsecondary education system. It called for more resources, student aid system reforms, and
greater accountability and transparency. The Budget includes several reforms that are aligned with
the Commission’s recommendations, including the following:
Increasing Need-based Grant Aid. The Pell Grant program remains the single largest source of
grant aid, helping 5.2 million students in 2006. The Budget increases the maximum Pell award from
$4,050 to $5,400 over five years. The Administration also proposes to increase Academic Competitiveness Grants for high achieving, low-income students.
Ensuring Accountability and Transparency in Higher Education. Taxpayers, parents, and students
lack clear and comprehensive information on the outcomes of their investments in higher education.
The Budget provides $25 million for a pilot initiative for collecting and analyzing student data to
measure outcomes such as graduation rates and academic performance. The pilot would assess the
feasibility of implementing a system that would safeguard privacy of individual data.

Restraining Federal Spending
Reforming the Student Aid System. The Deficit Reduction Act of 2006 included several important
reforms to help make the Federal student loan programs more efficient while increasing benefits
to students. The President’s Budget builds on these reforms by reducing Government subsidies to
lenders and guaranty agencies that are higher than necessary while still ensuring that all eligible
students receive loans, and eliminating the poorly targeted Perkins Loan and Supplemental Educational Opportunity Grant programs. Savings from these reforms will allow the Administration to

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DEPARTMENT OF EDUCATION

increase grant and loan aid, such as larger Pell Grants and Academic Competitiveness Grants, in a
better targeted, fiscally responsible manner. With these reforms, the Administration remains committed to making both the direct and guaranteed student loan programs more efficient, in order to
continue the mutually beneficial competition that has led to better services for students and schools
and lower costs in both programs.
Terminating and Reducing Discretionary Programs. The Budget proposes to terminate 43
programs, including many that the Program Assessment Rating Tool has shown to be ineffective
or unable to demonstrate results. These terminations will save $2.2 billion, all of which will be
redirected toward priority programs, including programs that support the reauthorization of NCLB.

Department of Education
(In millions of dollars)
2006
Actual
Spending
Discretionary Budget Authority:
No Child Left Behind Act Reauthorization
Title I Grants to LEAs ..................................................................................
School Improvement Grants .....................................................................
Reading First/ Early Reading First..........................................................
Striving Readers ............................................................................................
American Competitiveness Initiative ......................................................
Teacher Quality State Grants ...................................................................
Teacher Incentive Fund...............................................................................
Safe and Drug Free Schools programs ................................................

Estimate
2007

2008

12,713
—
1,132
30
32
2,887
99
488

12,713
—
1,122
32
32
2,887
4
524

13,910
500
1,136
100
397
2,787
199
324

10,583

10,492

10,492

...................................

1,182

1,182

600

Adult Education ..................................................................................................

573

573

573

13,045

12,607

13,223

—
771
980

—
771
980

2,216
—
980

IDEA Part B State Grants 1

..........................................................................

Career and Technical Education State Grants 2

Federal Student Aid:
Pell Grants—Discretionary Funding, Legislative proposal .............
Pell Grants—Mandatory Funding
(non-add, Legislative proposal) ..........................................................
Supplemental Educational Opportunity Grants..................................
Federal Work-Study .....................................................................................

THE BUDGET FOR FISCAL YEAR 2008

55

Department of Education—Continued
(In millions of dollars)
2006
Actual

Estimate
2007

2008

Higher Education:
TRIO programs ..............................................................................................
GEAR UP .........................................................................................................
National Security Language Initiative ....................................................
Historically Black College and Graduate Institutions .......................
Hispanic Serving Institutions.....................................................................

828
303
—
296
95

828
303
—
296
95

828
303
35
296
95

All other.............................................................................................................
Total, Discretionary budget authority 3 ..........................................................

10,516
56,553

10,545
55,985

9,218
55,995

............

1,885

179

—

Total, Discretionary outlays ................................................................................

58,264

58,933

54,971

Mandatory Outlays:
Federal Direct Student Loans, Legislative proposal .............................
Federal Family Education Loans, Legislative proposal .......................
Academic Competitiveness Grants .............................................................
All other .................................................................................................................
Total, Mandatory outlays .....................................................................................

6,258
26,307
44
2,574
35,183

4,310
1,399
867
2,551
9,127

466
–222
843
2,565
3,652

Total, Outlays ...........................................................................................................

93,447

68,060

58,623

Credit activity
Direct Loan Disbursements:
Federal Direct Student Loans (FDSL)........................................................
FDSL Consolidation..........................................................................................
Historically Black College and University Capital Financing..............
Total, Direct Loan disbursements .....................................................................

12,387
19,647
42
32,076

13,153
4,523
170
17,846

14,306
4,943
249
19,781

Guaranteed Loan Disbursements:
Family Federal Education Loans (FFEL) ..................................................
FFEL Consolidation ..........................................................................................
Total, Guaranteed loan disbursements ..........................................................

45,821
72,036
117,857

50,436
27,021
77,457

56,024
31,862
87,886

Memorandum: Budget authority from enacted supplementals

1
2
3

Program level. Budget authority is $11 million less than program level in 2006 and $791 million less than program level in 2008.
Program level. Budget authority is $791 million more than program level in 2008.
Program level. Budget authority is $9 million less than program level in 2006 rather than $11 million noted above, due to rounding. The Deficit
Reduction Act of 2005 moved Section 458 Federal Student Aid funds for administrative expenses from the mandatory to the discretionary side
of the budget in 2007. For comparability purposes, this change is also reflected in 2006.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102