Finance professor Naveen Khanna said increasing the number of graduates is one of the smartest things Obama could do.

“Education is the fundamental source of any prosperity we’ve had in the past century,” Khanna said. “It’s our most serious investment for the future.”

As he laid out his plan for next year’s spending on Thursday, Obama proposed tripling undergraduate and graduate science fellowships. He said the increase in fellowships would help spur the research needed to innovate the U.S. economy.

Wolfgang Bauer, chairman of MSU’s Department of Physics and Astronomy, said his department doesn’t have enough space or enough projects to handle more graduate students. However, Bauer said he supports the concept for departments that have room for researchers.

“In a time like this, where jobs are not too plentiful, a lot of people are thinking about upgrading their educations,” he said. “For our society, right now is really the time to invest in research and technology. We can’t get out of the recession getting arbitrary jobs.”

In addition to increasing the amount of research, more fellowships would increase the number of students who attend graduate school, he said.

The budget recommendations also called for reforming student loans and tying Pell Grants to inflation, which means as overall college costs rise, so will the amount awarded in Pell Grants. The move is expected to expand the program by 75 percent over the next 10 years.

The Pell Grant is a form of student aid for lower-income students. About 7,000 students at MSU received the Pell Grant during the 2007-08 school year.

Although the budget is focused on increasing education, it also takes steps to achieve Obama’s goal of halving the budget deficit by the end of his first term.

To ensure the shrinking of the deficit, Obama proposed the “pay-as-you-go” method, which requires every dollar Congress spends be offset by a dollar less of spending somewhere else.

“It would get rid of the deficit, but is it feasible?” Khanna said. “With the stimulus package, and with the way we’re trying to save the banks, that’s all extra money going into the deficit.”

For the “pay-as-you-go” method to work, Congress must cooperate by self-regulating, Office of Management and Budget deputy director Rob Nabors said during a conference call Thursday.

“We are committed to pay-go,” he said. “The most important thing for us is to stabilize the economy and get the long-term fiscal trajectory on a more sustainable path.”