When President Barack Obama’s $789 billion economic stimulus plan was signed into law, it became the American Recovery and Reinvestment Act. Given the staggering amount of information surrounding the stimulus package, this breakdown aims to help college-bound students understand how to take advantage of the recently approved funds—nearly $100 billion of which will go to education.
Portions of the ARRA will go toward:
-Preventing teacher layoffs
According to a recent study conducted by the University of Washington, states were facing education spending cuts of up to 15 percent (or roughly 574,000 teaching jobs) prior to the stimulus. In response, more than $78 billion in allocated funds will allow states and school districts to prevent layoffs, bolster program budgets, and increase focus on at-risk and special needs students.
-Tax cuts for college-bound students
The stimulus package will help the education sector grow through the recession by offering a new $2,500 American Opportunity Tax Credit. As a result, many previously ineligible high school seniors will get a valuable leg up on paying for college.
-Larger Pell Grants
Another way that the economic stimulus will make college more affordable is by increasing the maximum award level for the need-based Pell Grant by $500.
Everything from new campus buildings to technological and database enhancement will be paid for using the funds allocated for “higher education modernization, renovation, and repair.”
-Help for needy families
If a family is struggling to pay for food and housing, it goes without saying that their children’s education needs cannot be met. The 2009 economic stimulus will help alleviate such burdens by providing a 13.6 percent increase in food stamp payments, a new cash-assistance program called Temporary Assistance for Needy Families, and more funding for state and local groups that provide food and shelter for disadvantaged individuals.
Remaining portions of the stimulus package are earmarked for crucial higher education initiatives like funding work-study programs, streamlining the student aid process, and providing education for disabled persons and veterans.
In these rocky financial times, it can literally pay to be informed. If you’re considering enrolling in a degree program, or if you’re already a student, ask a financial aid representative at your school if you’re eligible for stimulus-related aid. Pay special attention to application deadlines and any required documentation. Remember that these financial measures are intended to provide an immediate (and temporary) boost to the economy, so the sooner you apply, the better.