The federal government is helping out higher education.
Among aiming to create and save millions of jobs over the next couple years, infrastructure improvements, energy plans and an examination of the health care system, the Senate-approved stimulus package accounts for students in colleges and universities.
President Obama signed the $787 billion bill last Tuesday in Denver, Colorado. The recovery plan targets lowest-income students through new college tuition credit and Pell Grant increases.
Seventeen billion dollars in the stimulus will increase Pell Grant funding from $4,731 to $5,350 on July 1 and $5,550 in 2010, covering about three-fourths of the average cost of a four-year college. Eight hundred thousand more students – 7 million total – will receive funding.
Tuition tax credits will get a $13.8 billion boost raising them from $1800 to $2500 for families earning up to $180,000 per year.
“It’s an investment that will create a new $2,500 annual tax credit to put the dream of a college degree within reach for middle class families and make college affordable for seven million students, helping more of our sons and daughters aim higher, reach farther and fulfill their God-given potential,“ said President Obama in his remarks at the bill signing.
With a $150 billion, two-year investment in the nation’s school districts, childcare centers and universities, Congress doubled the Department of Education’s current budget. Last year, the Department’s budget was $60 billion. It will be $135 billion this year, and $146 billion in 2010.
Education has traditionally been the responsibility of state and local government, particularly for K-12 education. In higher education, the federal government has a bigger role.
In an economic crisis, when people seek shelter in education as a way to enhance their skills for a tight job market as well as to wait out the recession, Pell Grants can be a great help to students from low-income backgrounds.
Edward Kealy, executive director of the Committee for Education Funding, a coalition of 90 education groups, says the grants are “the right thing at the right time.“
“As a national priority they have agreed that increasing spending on education is an essential way to get out of this recession,” Kealy said. “It’s a [new] era in the rationale of federal funding in education.“
For the first time, the federal government will take part in the construction and renovation of schools, which is also traditionally the state and local governments‘ responsibility. The stimulus package includes $6 billion for higher education’s renovation and modernization building on college campuses.
A part – about $15 billion – will go toward scientific research at universities.
Critics of the bill are concerned with the federal government’s expanded role in education and the consequences of two years of vast spending.
Frederick Hess, an education policy analyst at the American Enterprise Institute, criticized whether money spent this quickly will be wisely spent.
“The bill is fundamentally flawed, in that it shovels out vast amounts of borrowed money to help subsidized states which have opted to spend funds they are unwilling to raise through taxation,” he said in an e-mail interview.
“The only responsible justification, to my mind, would be the assurance that states are using this as a one-time get out of jail free card and are assiduously revisiting outlays and revenues so that they will have their fiscal houses in order when the stimulus has played out,” Hess said. “That, of course, is entirely absent in this legislation.“
In a New York Times article, Hess said, “It’s like an alcoholic at the end of the night when the bars close, and the solution is to open the bar for another hour.“
POOJA KUMAR can be reached at email@example.com.