By AP Education Writer Justin Pope
February 8, 2009
DURHAM, N.C. – The stimulus plan emerging in Washington
could offer an unprecedented, multibillion-dollar boost in
financial help for college students trying to pursue a degree
while they ride out the recession.
It could also hand out billions to the states to kick-start
idled campus construction projects and help prevent tuition
increases at a time when families can least afford them.
But cuts of $40 billion for state and local governments in
the Senate version were a big disappointment for college leaders.
House-Senate negotiations will determine whether education
aid to the states is relatively modest or massive — and
how much gets directed to high-need institutions for building
projects, versus elite universities that would benefit if the
final package spends more of the money on scientific research.
Students are big winners. Both the House and Senate bills
call for the largest-ever funding increase for Pell Grants,
the government's chief college aid program for low-income students.
It will take much of the proposed $15.6 billion increase in
the House version (slightly less in the Senate) just to erase
the existing funding shortfall and meet the surging demand
as the economy sours and more students enroll.
But the package would also increase next year's maximum award
by up to $500, to $5,350, starting July 1. That's the biggest
increase in history and would cover three-quarters of the cost
of the average public four-year college.
Most Pell recipients come from families earning less than
$40,000. And supporters note the new Pell dollars would be
spent almost immediately — students can't save them — while
also paying off down the road.
"Long-term, if we want a better economy, we need more
people going to college," Education Arne Duncan told The
Associated Press last week.
College leaders meeting in Washington this week for the American
Council on Education's annual meeting will be grateful for
the student aid boost. But they'll be closely watching how
Congress bridges the huge gaps between how much the House and
Senate versions propose spending to bail out state budgets
and prevent drastic education cuts.
The House bills calls for $79 billion to prevent cuts to local
school districts and public higher education. But it's not
yet clear how the money might be divided between K-12 and higher
education, and a portion could go to things besides education.
The Senate version calls for $39 billion.
Meanwhile, colleges are hoping Congress will agree restarting
idled building projects is an efficient short- and long-term
investment. As they lose revenues from state support, endowments
and tuition, hundreds of projects are on hold nationwide, from
a library extension at Fresno State to new dorms at Washington
University in St. Louis and a biology lab at Yale.
The California State University system alone has halted 130
projects, which it values at $850 million and says account
for 13,000 jobs. Meanwhile, the system may have to cut 10,000
enrollment slots.
The House bill has $6 billion for such projects, while the
Senate has none.
"We're ready to go, there's great jobs involved, and
we're educating kids who wouldn't have other opportunities
if we weren't there," Chuck Middleton, president of Roosevelt
University in downtown Chicago, said Sunday. His university
has a $135 million new building with classrooms, labs, dorms
and offices on hold after financing dried up. Construction
could be under way in six months, he says, providing 600 jobs
for two years while helping Roosevelt's diverse student body.
Also helping students, the House and Senate both call for
expanding the Hope tuition tax credit from $1,800 to $2,500
and making it partly refundable. Now, almost half of families
with children pay no income tax, so the current tuition tax-credit
system doesn't help them (the full benefit kicks in for families
earning at least $43,000).
The Center on Budget and Policy Priorities estimates the change
could help 3.8 million students.
If the infrastructure spending survives, it would likely prioritize
colleges with high minority enrollments, schools rebuilding
from disasters like Hurricane Katrina, and energy-saving projects.
It may also take steps to make sure community colleges get
their fair share, and private colleges — such as Roosevelt — are
hoping the final version will allocate some to their sector,
too.
The money would be for academic facilities, and wouldn't go — directly
at least — to things like gyms, food courts or chapels.
The House version calls for $1.5 billion for biomedical research
facilities, while a Senate amendment set aside more than $6
billion in extra research money for the National Institutes
of Health, among boosts to other research agencies. Those investments
have long-term benefits, but it would take time to distribute
them, and research universities would benefit most.
One other benefit notable for families: The Senate bill would
also allow families to spend money from 529 college savings
plans on computers.
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