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U.S. Department of Education 2013 Budget Continues Investments to Strengthen Workforce and Rebuild American Economy

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The Obama Administration continues its commitment to education and an America Built to Last with the release of its 2013 budget today, building on responsible decisions that will put the nation on a path toward fiscal sustainability in the coming years. These new education investments are built around core areas that will help all Americans gain the skills and knowledge they need to help rebuild the country's economy, and they will continue to empower states, districts and schools to pursue bold reforms.

"In these tough budget times, the Obama Administration is making a clear statement that high-quality education is absolutely critical to rebuilding our economy," U.S. Secretary of Education Arne Duncan said. "If we want to strengthen the American workforce, we must continue to invest in education."

The U.S. Department of Education is requesting $69.8 billion in discretionary funding for 2013, an increase of $1.7 billion or 2.5 percent from 2012. The President is proposing a $14 billion one-time strategic investment in key reform areas, including aligning education programs with workforce demands, raising the teaching profession, and increasing college affordability and quality. These investments will ensure that continuing investments in foundational programs like Title I, IDEA and Pell Grants are able to serve students and schools well. The Department's fiscal year 2013 budget also continues commitments to existing reform efforts like Race to the Top.

Continuing proven reform efforts
Building off the success of its Race to the Top programs, the Department has proposed investing $850 million for the 2013 competition to support comprehensive state and local reforms and innovations designed to close achievement gaps and increase student achievement. A significant portion of the funds would be dedicated for early learning.

To further support innovation at the local level, the Department is proposing $150 million for the Investing in Innovation fund to develop, evaluate and scale-up evidence-based approaches to improve student achievement, raise graduation rates, and increase teacher and school leader effectiveness. A portion of these funds will be used to support the development of breakthrough learning technologies through the Advanced Research Projects Agency - Education (ARPA-ED). In addition, the Department would boost funding for Promise Neighborhoods -- up to $100 million in total -- to support the development and implementation of comprehensive community projects designed to combat the effects of poverty and improve education and life outcomes for disadvantaged students.

Aligning job training programs with workforce demands
Because we need more high-quality training programs that give students crucial skills and prepare them for the high-skill jobs that employers are looking to fill, the Administration is proposing $8 billion in mandatory funding for a Community College to Career Fund. Jointly administered with the U.S. Department of Labor, this competitive program would provide funding to develop new partnerships between community colleges and businesses in order to train and place 2 million workers in high-growth industries.

These funds would give more community colleges the resources they need to become community career centers where people learn skills that local businesses are looking for right now. In addition, employers would offer paid internships for low-income students so they could simultaneously earn credit for work-based learning and gain relevant employment experience. The fund will also support new pay-for-performance strategies to provide incentives to ensure trainees find permanent jobs and encourage companies to locate in the U.S.

In addition, the Department is proposing to invest $1.1 billion to support the reauthorization and reform of the Career and Technical Education program so what students learn is more closely aligned with the demands of the workforce, and partnerships with postsecondary education are strengthened.

Raising up the teaching profession
To help teachers receive the respect they deserve and ensure that accomplished, effective educators are guiding every student's learning, the Department is proposing $5 billion in competitive funding to provide support to states and districts as they pursue bold reforms that can help better prepare, support and compensate teachers. The funds would allow states and districts to invest in the teaching profession while helping to drive reform that would reward effectiveness and performance.

This budget also establishes a new 25 percent set aside in Title II funds, about $620 million, within Effective Teachers and Leaders state grants that would go toward creating and expanding high-performing pathways into teaching and school leadership, reducing shortages of science, technology, engineering and math (STEM) teachers, and investing in efforts to enhance the profession. In addition, the Department would invest $400 million for the Teacher and Leader Innovation Fund -- an increase of $100 million over the current level -- to support states and districts that want to implement bold approaches to improve the effectiveness of the education workforce in high-need schools.

The Department would also invest $190 million in mandatory funding for Presidential Teaching Fellows to provide scholarships to talented students who attend top-tier teacher preparation programs and commit to working in high-need schools.

Increasing college affordability and quality
The budget addresses college costs and quality through a plan that encourages shared responsibility among states, colleges, families and the federal government. The Department would invest $1 billion for the first year of a Race to the Top: College Affordability and Completion to drive reform on the state level and help students finish faster, and it would expand and reform campus-based aid programs to provide more than $10 billion in student financial aid for colleges that restrain cost increases and provide a good value, especially to disadvantaged students. As part of that package, the Department would invest $735 million in Supplemental Educational Opportunity Grants, and increase aid to $1.1 billion in federal work study and $8.5 billion in Perkins loans -- up from about $1 billion currently available in Perkins loans.

The Department is also proposing $55 million for a First in the World competition to drive innovation among postsecondary institutions, including minority-serving institutions, and help them scale up practices that work to increase college completion.

In addition, the Administration is continuing key investments in Pell grants by increasing the maximum award amount to $5,635 to support nearly 10 million students as they pursue higher education. Following up on the President's State of the Union address, the Department is proposing to freeze the interest rate on subsidized student loans at 3.4 percent -- instead of allowing it to double to 6.8 percent this summer -- and make the American Opportunity Tax Credit permanent. The AOTC provides taxpayers up to $10,000 over four years to cover expenses like tuition, fees and textbook costs.

These proposals come on top of other continued investments, including $14.5 billion for Title I College and Career Ready Students, $534 million for School Improvement Grants and $11.6 billion for IDEA Part B Grants to states.

"These investments are absolutely critical, not just for our nation's students, teachers and schools, but for our country's economy," Duncan said. "Through these programs, we can help drive reform that will ultimately strengthen the workforce and create more job opportunities -- especially in well-paying, high-demand fields."

For more information about the U.S. Department of Education's FY2013 budget, please visit: http://www2.ed.gov/about/overview/budget/budget13/index.html.


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