The Death of LEAP?

If there ever was a federal student aid program that Rodney Dangerfield would have appreciated, it’s the Leveraging Educational Assistance Partnership (LEAP) grant program. It has never gotten any respect.

The $64-million program, which provides matching funding to states to entice them to spend their own resources on need-based financial aid, has been on the chopping block nearly every year since Congress created it in 1972. Presidents as far back as Richard Nixon have proposed killing it  -- although, at least until now, the program’s champions have always managed to save it.

This year, though, their luck may have run out. On Wednesday, President Obama delivered what is likely to be a deathblow to LEAP when he signed into law a short-term spending bill for the 2011 fiscal year that would eliminate the program. There is still, however, a short window for advocates of the program to try and come to its rescue. The Continuing Resolution lasts for only two weeks, so lawmakers could still theoretically revive the program when (or should we say “if”?) they reach agreement on a budget bill for the remainder of the fiscal year, which began in October. But given the appetite for budget cuts on Capitol Hill these days, the chance of this happening seems pretty remote.

The LEAP program (which was known as the State Student Incentive Grant program until 1998) was the brainchild of the late Sen. Jacob Javits, a liberal Republican from New York. Under the program, states must match federal support at least dollar for dollar, with funds provided through their annual appropriations. At the time of its creation, only 28 states provided need-based grants to students. Today, every state does, although some states are a lot more generous than others.

In each of his past two budget requests, President Obama has called for eliminating the program. “This program has accomplished its objective of stimulating all States to establish need-based postsecondary student grant programs, and Federal incentives are no longer needed,” the Department of Education said in its fiscal year 2012 budget summary. “State grants have expanded greatly over the years and most States significantly exceed the statutory matching requirements. State matching funds in academic year 2007-2008, for example, totaled nearly $1 billion or more than $950 million over the level generated by a dollar-for-dollar match."

When it comes to student aid, the administration is concentrating its effort on shoring up funding for the Pell Grant program, which is facing its own budget crisis. At the same time, the administration has proposed creating a new College Completion Incentive Grant program, which would provide $1.25 billion to states over the next five years to make "systemic reforms” in their higher education systems with the goal of graduating more students. With Republicans in charge of the House of Representatives, however, the chances that this proposal will be enacted are, to be generous, slim to none.

Supporters of LEAP say that the administration and Congressional leaders are being “shortsighted.” While many states are generous with their aid budgets, some award little or no other need-based aid besides what they must provide to meet the requirements of the program. Without federal pressure, these states  -- which are dealing with severe budget problems of their own -- will likely abandon these programs, student-aid advocates warn.

According to a recent article in The Chronicle of Higher Education, one such state is Arizona, where the federal government covers 51 percent of the state’s need-based financial aid budget. The Chronicle wrote:

Cutting LEAP would be devastating in Arizona, according to April L. Osborn, executive director of the Arizona Commission for Postsecondary Education…Ms. Osborn said the program was an important incentive in Arizona, where budget shortfalls in recent years have prompted the fiscally conservative State Legislature to cut student-aid programs. It’s unlikely the Legislature would have the money or the political will to replace LEAP with a state-run student-aid program, she said. Cutting LEAP, Ms. Osborn added, “will have a bigger impact than most people realize.”

It's still possible that Congress and the administration will once again grant the program an eleventh-hour reprieve. But if they don't, it won't be too long before we find out which side in this fight was right.