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President Obama’s budget proposal for the upcoming financial year 2013 would improve spending on higher education. His budget would increase the Department of Education’s spending to $69.8 billion, which is 2.5% more than the previous year.  Obama’s higher education plan would concentrate on new financial incentives to colleges and universities that keep the tuition under control. Funds will also be provided for research grants.

President is requesting billions of dollars to spend on training programs offered by community colleges. The schools that are able to help graduates to get internships and employment in their fields would receive federal help.

Obama’s 2013 budget includes a proposal for colleges and business to work together to train two million workers in industries that have high potential for growth. The budget allocates $8 billion for this purpose. Obama’s budget would also offer financial incentives to ensure that students find permanent job. It is expected that the money would also be useful for paying internship for low income college students.

President’s budget initiative would cut off federal help to for-profit colleges. Obama would pass strict rules that should be adhered by for-profit colleges. They would not be eligible for federal aid from the “Race to the Top” program or “First in the world” program. They would not also receive any research grants. For-profit colleges are coming under increased analysis of the Administration in Obama’s tenure. They have been subject to investigations by Congress.

The Pell grant award would be increased to $5,635 in Obama’s budget proposal. Over the past three decades, pell grants have not been modified according to the cost of colleges. Pell grants help more than 8 million Americans to afford college. The increase in pell grant would help more than 15 million students to pay for college.

The federal spending on the work study program is increased by 15 percent in the budget plan.  It also proposes to double the number of federal work study jobs over the next five years. The president is also requesting to defer the student loan interest rate from increasing in summer. The current interest rate on student loan is 3.4%. Obama’s proposal would prevent the interest rate from doubling to 6.8% this July.

The budget plan would expand the Perkins loan program from $1 billion to $8.5 billion per year. The interest rate would be increased from 5% to 6.8% to reform this program. It is estimated that the program would support 2,700 additional schools. Obama is also calling for a 390% increase in teacher education aid and aiming to increase the allocation from $41 million to $201 million.

This would help to train more teachers in science and math subjects. The budget proposal also offers $30 million to a new competitive grant program that would help improve teacher education programs at minority serving institutions.

The federal aid programs would be reformed in a way that it would move support away from colleges that do not succeed in keeping tuition under control  to those colleges that take reasonable steps to keep college education affordable and to offer better value.