IMPROVING PRODUCTIVITY AND EFFICIENCY

As States, colleges, districts, and schools face continued budget pressures, it is more important than 

ever that policymakers, educators, and other stakeholders work together to improve student learning 

and accelerate reform. The President’s budget recognizes the opportunities presented by current 

economic conditions to consolidate duplicative funding streams while making responsible 

investments in high-impact new initiatives and existing programs that are best able to produce 

significant improvements in student outcomes. In addition, the budget emphasizes the need for 

states, colleges, and universities to be more productive in reining in costs for students while 

preserving access and quality. 

Using Dollars More Effectively. Although the President is increasing total education spending, he 

recognizes that federal programs need to be efficient and productive. That’s why the 2014 budget 

request targets dollars toward efforts that provide a strong return on investment, such as the 

Preschool for All initiative; programs that include rigorous evaluation components, such as the 

Investing in Innovation Fund; and programs that leverage Federal investments to drive systemic 

reform at the State level, such as Race to the Top. 

Supporting local productivity and efficiency. The budget requests funds for programs that 

support innovative locally developed reforms that effectively use resources to accelerate student 

achievement. 

• Preschool for All ($75 billion). The budget would provide support to states to expand 

high-quality preschool for children from low- and moderate-income families, which is one of 

the best investments we can make as a nation to strengthen the workforce, enhance 

economic growth, and decrease future spending obligations. Children who attend highquality preschool are better prepared for school, less likely to be retained in grade, score 

higher on reading and math assessments in the elementary grades, and are more likely to 

graduate from high school than children who do not attend such programs. For every $1 

invested in high-quality preschool, taxpayers save an average of $7 in future costs as result of 

reductions in remedial education costs, increased labor productivity, and decreased crime

rates. 

• Race to the Top-College Affordability and Completion ($1 billion). The Department 

would use increased support for Race to the Top to fund a competition to improve college 

affordability and completion rates. This competition would provide grants to States to 

support one-time foundational investments in postsecondary reform that would reduce 

costs, with a large share of funds passed through to institutions to adopt reforms that also 

improve productivity. 

• Investing in Innovation (i3) ($215 million). Building on the overwhelming demand for i3, 

these funds will continue to ensure that schools and districts have access to innovative 

strategies and practices with demonstrated effectiveness. This model – more resources for 
activities with more evidence – helps ensure that federal funds are spent wisely. In addition, 

a portion of the funds would be set aside for the Advanced Research Projects Agency for 

Education, which would foster breakthrough developments in educational technology and 

learning systems, support systems for educators, and tools that result in improvements in 

student outcomes.

• “First in the World” competition ($260 million). This program would encourage greater 

innovation in postsecondary education to address the completion challenge and improve 

higher education productivity, build evidence of what works through rigorous evaluations, 

and scale up and disseminate those strategies that prove successful. This initiative would be 

composed of three parts:

• A competitive program modeled on i3, which would build evidence of what works 

through rigorous evaluations, and scale up and disseminate those strategies that 

prove successful. This program would include a strong emphasis on college access 

strategies for low income, minority and first generation college-goers.

• A competition to stand up new quality validation systems that can identify 

appropriate competencies, assessments, and curricula for high-need fields. This 

would support the creation and scaling of innovative, low-cost providers by giving 

them tangible student learning benchmarks and goals to work toward.

• A pay for success program tied to these new validation systems to reward providers 

that can successfully prepare students for free two-year degrees with rigorous 

demonstration of learning.

• Pay for Success. While Department funds are traditionally distributed to support reforms 

that improve student achievement, the budget would use the multi-agency pay for success

authority to experiment with a new model that would award funds after successful outcomes

are demonstrated. For example, the request would test out a pay for success model to 

incentivize the development of low-cost degrees in First in the World. This innovative 

stewardship of federal dollars would result in improved outcomes for students at a lower 

cost to taxpayers.

• Reform Campus-Based Aid to encourage value and completion. The 2014 request 

seeks to expand the Campus-based aid programs—the Supplemental Education Opportunity 

Grant (SEOG), Federal Work Study (FWS), and the Perkins Loan Program—to provide 

over $10 billion in aid to students. The President’s budget would modernize the way these 

funds are distributed to reward institutions that demonstrate a commitment to providing 

their students a high-quality education at a reasonable price, emphasize linkages between a 

student’s area of study and work-study experiences, and provide good value. These changes 
would ensure limited dollars are awarded to the institutions that will make the best use of 

them. 

• RESPECT competition ($5 billion). The Department would use these funds to award 

competitive grants to states and districts to transform the teaching profession by 

comprehensively reforming the key elements of the profession: from whom they recruit to 

how they prepare, evaluate, support, promote, and compensate teachers. In addition, the 

program would direct states and districts to develop plans to create a sustainable system for 

supporting teacher effectiveness that would continue to produce gains in student learning 

after the grant ends.