The $69.8 billion request for discretionary funding for fiscal year 2013 reflects an increase of $1.7 billion or 2.5 percent from fiscal 2012, the department said in a release.
"In these tough budget times, the Obama administration is making a clear statement that high-quality education is absolutely critical to rebuilding our economy," Education Secretary Arne Duncan said. "If we want to strengthen the American workforce, we must continue to invest in education."
President Obama proposed a $14 billion one-time investment in reform areas such as aligning education programs with workforce demands, and increasing college affordability and quality, among others, the department said.
Obama also called on Congress to make permanent the tuition tax credit and pass legislation to ensure student loan rates don't increase.
The administration also proposed $8 billion in funding for a Community College to Career Fund, a competitive program that would provide funding to develop new partnerships between community colleges and businesses to train and place 2 million workers in high-growth industries.
"Here in America, we've got the best workers and some of the fastest-growing companies in the world," Obama said Monday during a speech on the education budget at Northern Virginia Community College in Annandale, Va. "There's no reason we can't connect the two."
The budget also proposed $5 billion in competitive funding to provide support to states and school districts pursuing reforms to better prepare, support and compensate teachers. It also would establish a new 25 percent set-aside in Title II funds -- about $620 million -- that would, among other things, address shortages of science, technology, engineering and math teachers, and invest in efforts to enhance the teaching profession.
The budget also includes a $1 billion investment for the first year of Race to the Top: College Affordability and Completion, a program designed to encourage colleges and universities to minimize tuition increases.
Obama said if colleges and universities didn't curb spiraling tuition increases, they'd see a reduction of federal aid.
"These investments are absolutely critical, not just for our nation's students, teachers and schools, but for our country's economy," Duncan said. "Through these programs, we can help drive reform that will ultimately strengthen the workforce and create more job opportunities -- especially in well-paying, high-demand fields."
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