On February 17, 2009, President Barack Obama signed the American Recovery and Reinvestment Act of 2009- also known as the $787 billion economic stimulus package. The program is meant to jump-start the faltering economy and create jobs.
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But what does it mean for colleges, universities and the student who attend them?
Every state is going to be affected by the stimulus package differently, sources say.
Massachusetts plans to use their chunk to stall a planned $1,500 tuition increase at University of Massachusetts, while Tennessee plans to spend $470 million on public colleges, making up for cutbacks made this year and the ones expected next year.
Unfortunately, some schools will be receiving more funding than others from the stimulus package. According to this article at Insidehighered.com, New York’s prospects are a little murky. As of right now, the City University and State University of New York are expected to only receive $40 million, while the rest is going to other educational institutions like elementary, junior high and high schools.
Other money will be available at other colleges and universities, via research grants, job training money, Pell Grants, work study funds and tuition tax breaks.
So what does this mean for students? As sited from the American Association for Colleges of Teacher Education, the new economic stimulus package budget will provide the following benefits:
- Pell Grants: A $15.6 billion budget increase will raise Pell Grant maximums by $500.
- College Work Study: $200 million will be dedicated to providing more work study assistance.
- Higher Education Tax Credit: The Hope Scholarship Tax Credit, with a current maximum of $1800, will be replaced with the new Higher Education Tax Credit with a maximum of $2500.
- 529 Savings Plans: The new bill will allow parents and students to count computers as qualified expenses under 529 savings plans.
Additionally, over $53 billion will go towards a state stabilization fund that should lower the chance of job losses of school and college employees. The stimulus package is also expected to help colleges ward off steep tuition increases.