Education, Early Childhood and Workforce Committee Home

October 30, 2008

The Honorable Margaret Spellings
Secretary of Education
U.S. Department of Education
400 Maryland Avenue, SW
Washington, D.C. 20202

Dear Secretary Spellings:

On behalf of all the nation’s governors, we formally request that you waive the federal “Maintenance of Effort” (MOE) mandate in the Higher Education Opportunity Act (P.L. 110-315) for all states in the coming fiscal year or the next two fiscal years for states with biennial budgets.

When Congress imposed the MOE provision on states, it also granted the Secretary of Education the authority to waive the provision due to “a precipitous and unforeseen decline in the financial resources of a State or State educational agency.”  Given the current national and state economic crises, the nation’s governors request that you use that waiver authority now for all states. This is not without precedent.  Following the tragic events of Hurricanes Katrina and Rita, the Department used a nearly identical MOE waiver authority to quickly grant states needed flexibility. 

As you know, state balanced budget requirements will call for state officials to make very difficult budget decisions in the coming fiscal years. Governors take their responsibility to fund higher education very seriously, but the scope of the current economic decline will force states to cut spending across a wide variety of state services including health, education, transportation and public safety.  Already twenty-seven states are facing combined budget shortfalls of more than $26 billion, a number that is expected to grow in the coming months.  With the national economy not expected to recover until late 2009, states expect revenue shortfalls to continue for the next several years.

Unfortunately, the MOE mandate, which governors strongly opposed, punishes states unable to maintain spending levels for higher education by prohibiting access to all federal College Access Challenge Grant funding. This program provides need-based aid, financial counseling, debt management, interest-rate reductions, assistance to apply for free federal aid and numerous other services to low-income students.

The negative consequence of the MOE mandate will have a disparate impact on low-income students and their families by driving-up the cost of college and restricting access.  The nation’s governors are committed to providing students in their states with affordable access to higher education.  To that end, your assistance is critical if states are to succeed in their efforts during these difficult financial times.

Sincerely,