Thursday, January 29, 2009

Obama's Stimulus Plan's Relationship to Higher Education

The New York Times reported that Obama's stimulus plan, which just passed the House (with no Republican votes!), has unprecedented provisions for aid to education. This would include an increase of subsidies to private student loan lenders to keep loans available for students.

Most importantly, however, is a substantial increase to Pell Grants, which are federal grants awarded to low income students who are US citizens. Distribution of aid is determined by financial need as based on the FAFSA; expected family contributions (EFC) must be less than $3,850. Most students who receive Pell Grants have a family income of below $20,000, although families making up to $50,000 may be eligible. The maximum award per student is around $4,700. The stimulus plan dramatically increases spending on Pell Grants to $27 billion from $19 billion. This would effectively be seen as an increase of about $500 per student per year. Additionally, $490 million would go toward work study programs. Unsubsidized Stafford Loan limits would increase by $2,000 and the DOE would get $50 million for additional student aid programs.

A good resource to keep up on the events:

The front page article in the NYTimes (Thanks, Professor!)