It's looking like federal student financial aid will be increased in the forthcoming economic stimulus package, at least based on the legislation presented in each house of Congress in its current form. While the House stimulus bill contains more aid for education, the Senate bill also proposes higher education tax benefits and increases in Federal Pell Grant funding.
The House bill promises:
- $15.6 billion to increase the Pell Grant by $500 to $5,350 and fully fund the increase
- $490 million to Federal Work-Study
- $12.5 billion over the course of 10 years to offer a $2,500 tax credit that will be 40% refundable for those who would otherwise make too little to qualify
- $6 billion to higher education infrastructure
- $1.5 billion to improve energy efficiency for colleges, schools, and local governments
- $39 billion to school districts and state colleges
- $25 billion to states for "high priority needs" which can include education
- a $2,000 increase in loan limits on federal Stafford Loans
The Senate bill appropriates:
- $13.9 billion to increase the Pell Grant by $281 in 2009-2010 and $400 in 2010-2011 and fully fund the increase
- $12.9 billion to create a 30% refundable $2,500 tax credit
- $61 million to Perkins Loans
- $3.5 billion to improve energy efficiency and infrastructure on college campuses
- $39 billion to school districts and public colleges
- $25 billion to states for "high priority" needs which may include education
The House bill also includes money to improve financial aid administration and further assist student loan lenders, while the Senate bill will allow computers to be counted as education expenses towards which 529 plans can be used. The bills are facing some Republican opposition, especially regarding education spending, as it's been argued that construction projects and increases to student financial aid will not directly and immediately benefit the economy. As Congress and the White House continue to hash out the details of these bills, amounts are likely to change. But for now, it appears that colleges and college students may receive a little extra financial aid from the government this year.
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