President Obama Signs Economic Stimulus Package
Feb. 17, 2009
President Barack Obama today signed into law the $787 billion economic
stimulus package passed last week by Congress, providing significant
funding increases for student aid, research, and aid to states to ease
budget cuts to colleges and schools.
The House passed the American Recovery and Reinvestment Act of 2009
(H.R. 1) Feb. 13 by a vote of 246–183, with the
Senate following later that evening with a vote of 60–38.
The legislation provides some $17 billion in new funding for
the Pell Grant Program—an amount that will erase
the current budget shortfall and allow for an increase in the maximum
award from the current $4,731 to $5,350 in 2009 and $5,550 by 2010. This
will be the largest increase in the maximum grant in the history of this
essential program. Also included is a $200 million increase in
the Federal Work-Study Program.
The package includes a new American Opportunity Tax Credit, which
replaces and expands the current Hope Scholarship Tax Credit for two
years. At a cost of nearly $14 billion over 10 years, this new tax
credit will cover up to $2,500 (up from the current $1,800) of the cost
of college tuition and other course-related expenses (including books
and supplies) per year for the first four years of college. Forty
percent of this credit will be refundable, opening the credit to
students from lower-income families who do not pay taxes. Finally, this
tax credit will be available to taxpayers up to a much higher level of
income than currently, beginning to phase-out at $80,000 ($160,000 for
married couples filing jointly).
Also included is some $16 billion for research through several
federal agencies, including the National Institutes of Health ($10
billion), the National Science Foundation ($3 billion) and the
Department of Energy ($2 billion). Universities are likely to receive a
large portion of such funding, and some of it—including $1.5
billion of the funding designated for NIH—can be used for research
infrastructure.
For public two- and four-year colleges and universities, the bill
contains $54 billion in the State Fiscal Stabilization Fund, some $39
billion of which is intended to backfill state budget cuts to elementary
and secondary schools, and public colleges and universities during 2008
and 2009. The bill requires states to maintain their support for higher
education institutions in FY 2009, FY 2010, and FY 2011 at least at the
level that was provided in FY 2006, although waivers from this
requirement are permitted in certain circumstances. The only vestige of
higher education infrastructure support is contained in a portion of the
Stabilization Fund reserved to allow governors to address the need for
“other government services,” which the bill stipulates could
include public and private infrastructure projects.
In a statement released
Friday evening after the Senate vote, American Council on Education
President Molly Corbett Broad said, “Despite the bill's
elimination of a key provision for funding campus infrastructure
projects at the Department of Education, we recognize and appreciate the
historic resource levels for higher education provided by Congress and
the Obama administration . . . The challenge is now ours to take this
confidence placed in us and help America regain its economic footing. I
can assure you that we are up to the task and that our colleges and
universities will put these new resources to work
immediately.”
For more information on the new law, see the following:
House Committee on Education and Labor
Secretary Arne Duncan Visits Wakefield High School,
Arlington, VA (video)
The Final Stimulus Bill
Inside Higher Ed (Feb. 13, 2009)
Colleges and Students Cheer Congress's Economic-Stimulus
Deal
The Chronicle of Higher Education (sub. req.) (Feb. 13,
2009)
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