January 29, 2009

House Passes Economic Stimulus Giving Billions to Higher Education

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The $819 billion economic stimulus plan passed yesterday in the House of Representatives would shower billions of dollars to a higher education sector that is in dire need of aid. The package, passed on a 244-188 vote, would boost Pell Grant to a historic high and introduce a new $2,500 tuition tax credit.
The House’s approval of the stimulus plan came a few days after Cornell announced a series of measures — including tuition increase, budget cuts and a hiring pause — to battle its 27-percent loss in its endowment and $6 million slash in state funding on Saturday.
One of the most significant measures of the stimulus was a $15.6 billion plan that would raise Pell Grant scholarship to an unprecedented high. The maximum Pell Grant Award will rise by $500 to $5,350 for 2009-2010, and to $5,550 for 2010-2011.
There are roughly 1,800 Pell Grant recipients at Cornell, which make up about 13 percent of the undergraduate student body, The Sun reported in Sept. 2008. Nationwide, this boost is expected to benefit 7 million students, according to a press release from Rep. George Miller (D- Calif.)
At the same time, Senate committees are working on a separate version of the stimulus. The package that was approved by the Senate Appropriations Committee on Tuesday also supported a raise in Pell Grants, according to Inside Higher Ed. But the amount of $13.9 billion, which would translate into a $281 increase in the maximum rant in 2009-2010, dwarfs in comparison to the House’s stimulus package. [img_assist|nid=34553|title=Stimulus Aid for Higher Education|desc=|link=node|align=right|width=|height=0]
The House’s recovery bill would also create a $2,500 “American Opportunity” tax credit to temporarily replace the existing Hope tax credit. This new tuition tax credit comes with a price tag of $12.5 billion over ten years. Under this new plan, credit will be phased out for individuals with income of $80,000 and couples who earn $160,000.
Student loan recipients will also benefit from the financial package. The annual limit of unsubsidized loans on undergraduate students will increase by $2,000. Such a measure is not included in the Senate’s version.
The package passed by the Congress yesterday would also channel $490 million to work-study programs. About 200,000 students are expected to benefit from this measure across the nation. The Senate’s stimulus plan, however, does not specify any aid for work-study programs, according to Inside Higher Ed.
While Cornell has announced an extension in its construction pause through June 30, the House’s package would devote $6 billion for “higher education modernization, renovation [and] repair.” At the same time, the Senate’s version plans to spend $3.5 billion to enhance energy efficiency and technological infrastructure in higher education.
Apart from enhancing student aid, the economic recovery bill will also devote a significant amount of money to assist scientific research. The National Science Foundation will receive $3 billion for research, equipment and education, while the National Institutes of Health and Department of Energy is respectively allocated $3.5 billion and $4 billion for research.
The stimulus plan will also devote $4 billion for job training.