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Dead ahead: A pothole in highway construction aid?

By WTOP Staff

JOAN LOWY
Associated Press

WASHINGTON (AP) — As the summer driving season swings into full gear, states can expect a large pothole in their construction budgets if Congress doesn’t reach an agreement quickly on how to pay for federal highway and transit programs, President Barack Obama and his top officials are warning.

States will begin to feel the pain of cutbacks in federal aid as soon as the first week in August if lawmakers don’t act, Transportation Secretary Anthony Foxx said in a letter to states. That’s because the balance in the federal Highway Trust Fund is dropping and will soon go below $4 billion, the cushion federal officials say is needed for incoming fuel tax revenue to cover outgoing payments to states.

The cuts will vary from state to state but will average about 28 percent, transportation officials said. By the end of August, the trust fund’s balance is forecast to fall to zero and the cuts could deepen.

A second deadline is coming Sept. 30 when the government’s authority to spend money on transportation programs expires.

As many as 700,000 jobs could be at risk over the next year, Obama told a crowd of about 500 gathered Tuesday beneath the Key Bridge, which spans the Potomac River and joins the District of Columbia and Virginia.

Revenue from federal gas and diesel taxes continues to flow into the trust fund, but the total is expected to be about $8 billion short of the transportation aid the government has allocated to states this year. Over the next six years, a gap of about $100 billion is forecast if transportation spending is maintained at current levels.

At the same time, transportation experts and industries that depend on the nation’s highways to get their products to market are calling for greater spending on transportation to shore up aging roads, bridges and tunnels and to accommodate population growth.

“Right now there are more than 100,000 active projects across the country where workers are paving roads and rebuilding bridges and modernizing our transit systems,” Obama said. “And soon states may have to choose which projects to continue and which ones to put the brakes on because they’re running out of money.”

Already some states are cutting back on construction projects because of the uncertainty of federal funding, Foxx told reporters earlier. “I think people will see it in the traffic. I think people will see it in the condition of our roads,” he said.

The reason for the shortfall is that revenue from the federal 18.4-cent-a-gallon gasoline and 24.4-cent-a-gallon diesel tax hasn’t kept pace with transportation needs. The taxes haven’t been increased in more than 20 years, while construction and other costs have continued to go up.

The most obvious solution is to raise fuel taxes, which is what several blue-ribbon commissions have recommended and business groups like the U.S. Chamber of Commerce and the American Trucking Associations have urged. But neither political party nor the White House wants to get out front on a proposal to raise taxes in an election year. Foxx didn’t rule out Obama’s signing legislation that raises the gas tax, but he indicated the administration doesn’t believe there is enough support in Congress to pass a gas tax increase.

“We have said if Congress acts on something, we’ll keep an open mind,” Foxx said.

Instead, Obama is pushing a plan to close tax loopholes and use the revenue to pay for increased transportation spending for the next four years.

“We have a proposal we think is politically acceptable,” Foxx said.

Nearly a dozen proposals to address the problem have been floated in Congress, including several to raise the gas tax, but none have gained traction. House Ways and Means Committee Chairman Dave Camp, R-Mich., offered a similar proposal to Obama’s plan in April. But many Republicans say they’d rather offset increases in transportation spending with cuts in other government programs rather than higher taxes. And many lawmakers say they want to adhere to the trust fund’s “user pays” principle by raising money from people who most use the roads, if not through a gas tax then some other means.

Saying his plan would “support millions of jobs” by making “companies that are shipping their profits overseas” pay their fair share of taxes, Obama blamed the impasse on the GOP.

“It’s not crazy, it’s not socialism. It’s not the imperial presidency,” he said. “But so far, House Republicans have refused to act on this idea. I haven’t heard a good reason why they haven’t acted — it’s not like they’ve been busy with other stuff. No, seriously. I mean, they’re not doing anything. Why don’t they do this?”

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Associated Press writer Nedra Pickler contributed to this report.

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Follow Joan Lowy on Twitter at http://www.twitter.com/AP_Joan_Lowy

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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