Column by Jeff Vincent
January 31, 2002

During a late-year rush to wrap up long-pending business, the U.S. Congress took final action on several measures of importance to Vanderbilt and other universities. These included approval of appropriations bills for several federal departments and agencies that fund an array of university research grants and student aid programs. Together, they provide substantial lifeblood to the academic community.

Most of the news is very positive: In the final hours before adjourning on Dec. 20, Congress approved legislation to substantially increase funding again for the National Institutes of Health and to give healthy boosts to key Department of Defense research categories. These agencies are the two largest sources of federal grants for Vanderbilt. (In earlier weeks, lawmakers passed legislation boosting research at a number of other federal agencies important to Vanderbilt, including the National Science Foundation.)

"Increases in research investments by the federal government have ripple effects in many departments and programs at Vanderbilt," said Richard McCarty, dean of Arts and Science. "Many of our faculty are successful in competing for federal grants to support their research and the work of their undergraduate and graduate students and postdoctoral fellows. I expect that the amount of grant money coming into Vanderbilt will increase in the next several years because of these significant increases in agency budgets."

In other 11th-hour activity, Congress approved a spending bill for the Department of Education that provides increases for most student aid programs, including a 6.7 percent increase in the maximum Pell Grant.

All of these spending bills actually covered the fiscal year (2002) that began on Oct. 1, 2001; since that date, the federal government has been operating on a series of "continuing resolutions" that provided temporary funding. Congress reconvened on Jan. 23; President Bush delivered his State of the Union address on Jan. 29; and the White House is expected to [will] unveil its budget proposal for the next fiscal year (2003) in early [on] Feb. [4].

Congress had to act on these appropriations bills before leaving town, but it [postponed] a number of other legislative proposals, some of which would impact higher education, [until the current session.] After Sept. 11, the members were focused mainly on responding to the terrorist attacks and dealing with anthrax incidents that severely disrupted the regular flow of business. Ironically, among the deferred issues are proposals addressing the security of biohazardous materials used in research laboratories. Congressional leaders have pledged to take up this matter early this year.

Also postponed were a number of tax issues, including a measure that would allow individuals to "rollover" their IRA accounts into charitable and other nonprofit organizations (including educational institutions). Earlier in the session, however, Congress did approve legislation extending the same tax breaks on prepaid tuition plans to private colleges and universities as those enjoyed by public institutions.

Record Dollars for Federal R&D

Here are more details about the key appropriations bills for fiscal year 2002, including some examples of how they affect might affect Vanderbilt:

Overall, the federal investment in research and development in FY 2002 will exceed $100 billion for the first time, according to the American Association for the Advancement of Science. The total of $103.7 billion, an increase of 13.5 percent over FY 2001, represents the largest dollar increase in history and the largest percentage increase in nearly two decades, AAAS said.

Of more immediate importance to research universities were the correspondingly large increases for basic and applied research in FY 2002. The total reached $48.2 billion, an 11 percent increase, according to the latest figures from AAAS. Roughly half of the nation's basic research is performed at America's research universities.

The final FY 2002 figures for federal research are most striking when contrasted with the original budget requests from the White House last April. At that time, the Administration proposed cuts for most R&D agencies. In the intervening months, the research community - including research universities - strenuously lobbied for a greater federal investment in this area. Some of the final agency figures also benefited from a heightened interest in research involving national defense and "homeland security," especially in the areas of antiterrorism, including the threat of bioterrorism.

The larger the pool of available funding, the greater the opportunity for Vanderbilt to compete for peer-reviewed research grants. "Our faculty are very talented, and I have great confidence in their ability to attract support from federal agencies," McCarty said. The University received federal grants and contracts totaling $182.9 million in the year that ended last June 30. This sum was 84 percent of our sponsored projects funding from all sources.

The biggest dollar increase was at NIH, which stayed on track to double its budget between FY 1998 and FY 2003. The agency's annual budget was increased by 15.7 percent to $23.6 billion, and all of its institutes received at least a 12 percent increase.

Across Vanderbilt University, including both the central campus and the medical center, grants from NIH totaled $139.4 million in our most recent fiscal year, accounting for 76 percent of Vanderbilt's sponsored projects from federal sources. NIH supported more than 90 percent of the federal research funds awarded to the Medical Center, 54 percent in the College of Arts and Science, and 39 percent in Peabody College.

At the Department of Defense, basic research (the so-called "6.1" account) will increase by 5 percent to $1.4 billion. Applied research ("6.2") is slated for a very healthy 14.6 percent increase to $4.2 billion.

DOD awarded $12.2 million to Vanderbilt, or nearly 7 percent of Vanderbilt's federal funding for research in the past fiscal year. DOD funding provided 46 percent of the sponsored research in the School of Engineering and some 20 percent in the College of Arts and Science.

R&D funding for the National Science Foundation will increase by 7.6 percent to a total of $3.5 billion. AAAS notes that most of NSF's research directorates will receive increases greater than 8 percent, with the largest budget increases going to a new math and science education partnerships program. In addition, the NSF budget boosts funding for information technology research and nanotechnology research by $25 million each (to $180 million and $199 million, respectively). Somewhat less successful were NSF's Biological Sciences directorate, which will receive a 4.9 percent increase, and the Social, Behavioral and Economic Sciences directorate, which gets a 2.7 percent boost.

NSF awarded $8.5 million to Vanderbilt last year, or about 5 percent of our federal research funding. Funding from NSF provided 24 percent of the sponsored research received by the School of Engineering and 16 percent of the project support in Arts and Science.

In fact, all federal agencies received boosts in research funding in FY 2002. Other examples include NASA R&D (up 3.8 percent) and the Department of Energy R&D (up 4.9 percent). Vanderbilt receives grant funding from these and a number of other federal agencies, but to a smaller extent than the examples above.

Meanwhile, outside the arena of research in the physical sciences and engineering, the Department of Education also garnered a substantial increase in research funding for FY 2002. The budget for ED's Office of Educational Research and Improvement will increase by 16.2 percent to $443.9 million

The Department of Education grants a significant amount of research and demonstration funding to Vanderbilt, principally to Peabody College. The total in ED grants received in the past year amounted to $7.6 million, or about 4 percent of our federal total. Of this sum, $6.1 million was for projects at Peabody, or 48 percent of Peabody's sponsored projects.

Key Student Aid Programs also Boosted

It also was a good year for several of the student aid programs. The Pell Grant Program, which provides grants to financially needy undergraduate students, received a $10.3 billion appropriation which is an increase of 17.8 percent from FY '01. Individual students can now receive a maximum amount of $4,000 a year, an increase of $250.

There are 608 Vanderbilt students who receive Pell Grants.

During negotiations between Congress and the White House on this and other student aid programs, the White House took a hard line against any increase in the maximum award for Pell grants, claiming that the additional money approved by Congress would not be enough to raise the maximum award and that any new money would have to cover budget deficits caused by the increased number of students using Pell grants.

Congressional leaders were not deterred, however, and figured out a way to maintain the increase in funding. The White House had also requested that the Secretary of Education be granted the authority to reduce the size of the maximum Pell Grant award but Congress was successful in getting this language removed from the legislation.

Two of the three campus-based programs received solid, if not spectacular, increases in funding. The Supplemental Education Opportunity Grants (SEOG) program, which supplements the aid students receive from other sources and is given to students who have "exceptional" financial needs, received a $725 million appropriation, a 4.9 percent increase from FY 01. The Perkins Loan Program, which provides low-interest loans to undergraduate and graduate students, received a $168 million appropriation an increase of 5 percent over FY 2001 funding. The College Work-Study Program, which provides part-time jobs for undergraduate and graduate students, did not receive an increase and will be funded at $1.011 billion, the same as FY 2001.

Vanderbilt currently has 333 students in the SEOG program, 947 in the Perkins Loan Program, and 1,274 in the Work-Study program.

The GEAR UP Program which supports early college preparation and awareness activities for elementary and middle school students received a decrease in funding of 3 percent, or $10 million, from FY 2001. However, the total appropriation of $285 million is $58 million more than the White House had proposed. In addition, it has been reported that there will be enough additional funds for new projects.

At Vanderbilt, GEAR UP dollars are a critical source of funding for Project GRAD, a partnership with Metropolitan Nashville Public Schools, the Inner City Educational Foundation and the Ford Foundation. The project seeks to develop the educational resources and community support to make college a real possibility for inner city students. It touches some 2,500 students in Metro schools.

New Year is Loaded with Uncertainty

Many political observers believe the significant gains in research and student aid funding may be short-lived. A number of forces are creating substantial pressure to limit domestic spending: the specter of a return to federal budget deficits; the possibility of a continuing economic slump; the cost of waging war on terrorism; and the likelihood of substantial increases in future defense capabilities and readiness.

Throughout the final three months of the last Congressional session, desires for spending restraint were overshadowed by a collective will to deal quickly and effectively with the various impacts of the terrorist attacks. Notwithstanding major unforeseen events, the coming year - it also happens to be a key mid-term election year, with control of both houses of Congress in the balance - may see a return to strong partisanship and political wrangling. The White House and at least some of the Congressional leadership can be expected to seek much greater discipline on federal spending.

[W]hen President Bush unveils his proposed budget for FY 2003, it may well show real cuts in many agencies and programs. For research universities, this will intensify the need to make the case for continued federal investment in both university-based research and in the students who, through new ideas in a wide range of disciplines, will drive the social, scientific and technological changes of the future.

Dean McCarty was asked what advice he would give national policymakers as they start a new and difficult year of budged deliberations. "The budget increases approved by Congress represent a wise investment for the nation," he responded. "Each grant dollar expended is translated into improvements in technology, advances in medical sciences and increased appreciation for the world around us.

"We live in challenging times, but there is no better time than now to continue these prudent research investments in the future," he concluded.

Midge Gardner and Steve Smartt contributed to this report.