Education Jobs Fund Proposals in the111th Congress

Rebecca R. Skinner
Specialist in Education Policy

During the 111th Congress, both the House and Senate have considered various pieces of legislation that would provide funds to prevent teacher layoffs. These proposals have generally been referred to as proposals to create an Education Jobs Fund. The first Education Jobs Fund was included by the House in H.R. 2847, the Jobs for Main Street Act. It was not retained in the final bill. More recently, the Education Jobs Fund was included in the Supplemental Appropriations Act, 2010 (H.R. 4899) by the House, but the domestic spending provisions added by the House through amendment were not agreed to by the Senate. Ultimately, the FY2010 Supplemental Appropriations bill did not include funding for an Education Jobs Fund. On July 29, 2010, Senator Reid proposed an amendment (S.Amdt. 4567), on behalf of Senator Murray, to add the Education Jobs Fund and a state Medicaid package as a substitute amendment to the FAA Air Transportation Modernization and Safety Improvement Act (H.R. 1586). The substitute amendment is schedule for a cloture vote on August 2, 2010.

Under H.R. 2847, H.R. 4899, and S.Amdt. 4567, the Education Jobs Fund would be administered generally under the terms and conditions that applied to the State Fiscal Stabilization Fund under the American Recovery and Reinvestment Act (ARRA; P.L. 111-5, Sections 14001 through 14013). For example, funds would be distributed to states using the same formula used to distribute funds under the State Fiscal Stabilization Funds. States would then be required to distribute funds to local educational agencies (LEAs). The specific uses of funds at the LEA level have varied across H.R. 2847, H.R. 4899, and S.Amdt. 4567. Under the most current proposal, LEAs could only use funds for compensation and benefits and other expenses (e.g., support services) necessary to retain existing employees, to recall or rehire former employees, and to hire new employees in order to provide early childhood, elementary, and secondary educational and related services.

This report includes a summary of key provisions contained in S.Amdt. 4567. Estimated state grants based on the amendment's provisions are also included. It also discusses two issues related to the proposed amendment with respect to the timing of the funds and reporting requirements regarding the use of the funds. The report concludes with a brief discussion of the legislative history of Education Jobs Fund proposals during the 111th Congress.


Date of Report: August 2, 2010
Number of Pages: 14
Order Number: R41353
Price: $29.95


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Federal Student Loans Made Under the Federal Family Education Loan Program and the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers

David P. Smole
Specialist in Education Policy

The William D. Ford Federal Direct Loan (DL) program, authorized under Title IV, Part D of the Higher Education Act of 1965 (HEA), as amended, is the primary federal student loan program administered by the U.S. Department of Education (ED). The program makes available loans to undergraduate and graduate students and the parents of dependent undergraduate students to help them finance their postsecondary education costs. Several types of loans are offered through the DL program: Subsidized Stafford Loans and Unsubsidized Stafford Loans for undergraduate and graduate students; PLUS Loans for graduate students and the parents of dependent undergraduate students; and Consolidation Loans through which borrowers may combine their loans into a single loan. For FY2011, ED estimates that 24.3 million loans (not including Consolidation Loans) totaling $116.4 billion will be made to students and their parents through the DL program.

Until July 1, 2010, Subsidized Stafford Loans, Unsubsidized Stafford Loans, PLUS Loans, and Consolidation Loans were also available through the Federal Family Education Loan (FFEL) program, authorized under Title IV, Part B of the HEA. The SAFRA Act, part of the Health Care and Education Reconciliation Act of 2010 (HCERA; P.L. 111-152), terminated the authority to make new loans under the FFEL program after June 30, 2010. While new loans may no longer be made through the FFEL program, approximately $450 billion in FFEL program loans are outstanding and are due to be repaid over the coming years.

Under the DL program, which has effectively replaced the FFEL program, loans are made with capital provided by the federal government. Under the FFEL program, loans were made with capital provided by private lenders, and the federal government guaranteed lenders against loss through borrower default, death, permanent disability, or, in limited instances, bankruptcy. When both programs were authorized and making available essentially the same types of loans, institutions of higher education (IHEs) were permitted to select the program of their choice.

The loans made through the FFEL and DL programs are low-interest loans, with maximum interest rates for each type of loan established by statute. Subsidized Stafford Loans are unique in that they are only available to students demonstrating financial need. The Secretary of Education pays the interest that accrues on Subsidized Stafford Loans while borrowers are in school, during a six-month grace period, and during authorized periods of deferment. Unsubsidized Stafford Loans and PLUS Loans are available to borrowers irrespective of their financial need; and borrowers are responsible for paying all the interest that accrues on these loans.

FFEL and DL program loans have terms and conditions that may be more favorable to borrowers than private and other non-federal loans. These beneficial terms and conditions include interest rates that are often lower than rates that might be obtained from other lenders, opportunities for repayment relief through deferment and forbearance, loan consolidation, and several loan forgiveness programs.

In recent years, numerous changes to the terms and conditions of FFEL and DL program loans have been made under the College Cost Reduction and Access Act (P.L. 110-84), the Ensuring Continued Access to Student Loans Act (P.L. 110-227), the Higher Education Opportunity Act (P.L. 110-315), the 2009 technical corrections to the HEA (P.L. 111-39), and the SAFRA Act. This report describes the terms and conditions of loans currently available to borrowers through the DL program and of loans made in recent years through the FFEL and DL programs.


Date of Report: July 16, 2010
Number of Pages: 66
Order Number: R40122
Price: $29.95

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The Rise in Wage Inequality by Level of Education, 1975 to 2008

Gerald Mayer
Analyst in Labor Policy

Wage inequality in the United States has increased in recent decades. The average earnings of more-skilled workers have increased relative to the average earnings of less-skilled workers. For a period during the 1980s, the average real hourly earnings of men with less than a college education declined. Average earnings do not show how the earnings of individual workers or workers in different occupations or industries may have changed.

The increase in wage inequality has been due mainly to shifts in the relative supply of and demand for workers with different skills. Individual skills include educational attainment. From 1975 to 2008, the supply of more-educated workers increased relative to the supply of lesseducated workers. Over the period, the percentage of workers who completed at least four years of college increased steadily, while there was an appreciable decline in the percentage of workers with a high school education or less. Nevertheless, in 2008 8.8% of workers (10.6% of men and 6.6% of women) had not graduated from high school. Among workers with less than a high school education and workers with an Associate's degree or some college, the rate of improvement in educational attainment has slowed.

From 1975 to 2008, average real hourly earnings increased for workers at all educational levels. Despite the increase in the relative supply of better-educated workers, wage inequality increased between workers with different levels of education. Inequality also increased among workers with the same level of education. These findings suggest that several factors may be responsible for the slower growth in real earnings for less-educated workers and the rise in wage inequality by level of education.

Factors that may account for the relative increase in demand for skilled workers include changes in technology, shifts in the economy from goods-producing to service-producing industries, deregulation, and globalization. In addition, earnings may have been affected by the decline in unionization and lower real value of real minimum wage rates.

Policies to raise the level of real earnings or reduce inequality include both macroeconomic and microeconomic policies. Specific policies may work best in combination with other policies; for example, improving the skills of American workers may work best in combination with policies to increase the demand for workers.

The level and distribution of earnings are affected by economic conditions. Macroeconomic policies that reduce unemployment, or maintain low unemployment, can raise the earnings of less-skilled workers.

Real earnings generally rise with increased labor productivity—through higher current wages, lower prices for goods and services, or both. General policies to increase productivity may include efforts to raise both private and public saving, expand investment in human capital, and encourage the development of technology.

Wage inequality may be reduced through either direct or indirect policies. Indirect policies include efforts to expand the income-producing human capital of lower-skilled workers (e.g., education, health care, and job training). Immigration policy can also affect the supply of workers with different skills. Direct policies to reduce inequality include progressive taxation and income transfer programs.


Date of Report: July 20, 2010
Number of Pages: 35
Order Number: R41329
Price: $29.95

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The District of Columbia Tuition Assistance Grant (DCTAG) Program

Christopher S. Van Orden
Presidential Management Fellow

The District of Columbia College Access Act of 1999 (P.L. 106-98) was enacted on November 12, 1999, creating the District of Columbia Tuition Assistance Grant (DCTAG) program. The program provides grants to District of Columbia residents for undergraduate education. Grants for study at public institutions of higher education (IHE) nationwide cover the difference between instate and out-of-state tuition, up to $10,000; students may also receive grants of up to $2,500 for undergraduate study at Historically Black Colleges and Universities (HBCUs) nationwide and private IHEs in the Washington, DC, metropolitan area.


Date of Report: July 7, 2010
Number of Pages: 20
Order Number: R41313
Price: $29.95

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The Individuals with Disabilities Education Act (IDEA): Selected Judicial Developments Following the 2004 Reauthorization

Nancy Lee Jones
Legislative Attorney

The Individuals with Disabilities Education Act (IDEA) is the major federal statute for the education of children with disabilities. IDEA both authorizes federal funding for special education and related services and, for states that accept these funds, sets out principles under which special education and related services are to be provided. The cornerstone of IDEA is the principle that states and school districts make available a free appropriate public education (FAPE) to all children with disabilities. IDEA has been the subject of numerous reauthorizations; the most recent reauthorization was P.L. 108-446 in 2004. Congress is currently beginning the process of identifying potential issues for the next reauthorization. Some of the issues raised by judicial decisions include the following:

• What amount of educational progress is required to meet FAPE standards?

• What educational benefits are required to be put in an individualized education program (IEP)?

• What use of seclusion and restraints is allowed (if any) under IDEA?

• Are all settlement agreements enforceable in federal court or only those reached through dispute resolution or mediation?

• Is information disclosed in a resolution session confidential?

• What are the specific rights of a parent of a child with a disability?

• What are the rights of a noncustodial parent of a child with a disability?

• Does the Supreme Court's decision in Schaffer v. Weast correctly allocate the burden of proof in IDEA cases?

• Are compensatory educational services required for the same amount of time that the appropriate services were withheld?

• Does the Supreme Court's decision in Arlington Central School District v. Murphy correctly deny reimbursement for expert witness fees?

• Does there need to be more detailed guidance on systemic compliance complaints?

This report examines the Supreme Court decisions, and selected lower court decisions since July 1, 2005, the effective date of P.L. 108-446.


Date of Report: July 1, 2010
Number of Pages: 31
Order Number: R40521
Price: $29.95

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