Alabama is losing $2.1 million in federal higher education funding as a penalty for cutting state support for colleges and universities too much.
The penalty was created by Congress in 2008 as a way to help keep college tuition down by trying to prevent cutbacks in state support.
To avoid losing the $2.1 million College Access Challenge Grant, aimed at boosting Alabama's college participation and completion rate, the state would have to restore $36.9 million in higher-education spending.
Gov. Robert Bentley's office said Friday it can't afford to do so and will make do without the grant.
"There simply is not enough money available to propose a $36 million increase in the budget in order to hold on to $2 million," Jeremy King, Bentley's spokesman, said in an email.
The U.S. Department of Education rejected the state's request for a waiver to a rule that makes grant money available only to states that limit how much they cut their higher-education spending. Alabama slashed that aid by 11 percent from 2005-2009, which exceeds the grant's criteria, the Obama administration told State Education Superintendent Thomas Bice last month.
King said Alabama is disappointed and hopes the administration will consider the state's fiscal stress.
"We felt a waiver of the required state match would be appropriate due to the combination of the economic downturn, the Gulf oil spill and the devastating tornadoes that have all taken a toll on the state," he said.