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Stimulus Outlook Friendly to Pell Grant

Adding a Pell Grant increase to the next economic stimulus package — a goal of many higher education organizations — is moving closer to reality based on details emerging from the U.S. House of Representatives and Senate.

Congressional Democrats favor a $500 increase in the maximum grant for needy students, at a cost of $15 billion for two years, reports the Politico, a Washington, D.C., newspaper. While the package still is taking shape, education advocates told Diverse they also expect such action based on recent discussions on Capitol Hill.

“I don’t think anyone really opposes it,” said Angela Peoples, legislative director for the United States Student Association (USSA). “We’re definitely excited to hear about that.”

The increase would bring the maximum Pell Grant above $5,000, to $5,231. “This is great news for students,” Peoples said. “There are a lot of families struggling to pay for college.”

Overall, education could receive $140 billion under the stimulus package, including funds for Title I, special education and other K-12 programs, Politico noted.

President-elect Obama has discussed a new economic stimulus package of more than $700 billion, the amount of last fall’s financial sector bailout. In addition to education, dollars would flow to infrastructure projects as well as to states and localities to shore up Medicaid and other health and service programs.

Education groups have offered various Pell proposals in recent weeks. A coalition led by USSA, the American Association of State Colleges and Universities and other groups had recommended a 50 percent increase in the grant, to $7,000. That group also has sought an extra $250 million for college work-study for needy students.

A larger group, including the American Council on Education, has proposed a $700 Pell Grant increase, a gain of 15 percent, along with a doubling of funds for Supplemental Educational Opportunity Grants. The ACE-led group also is seeking infrastructure grants for colleges and universities to build and renovate facilities, with a focus on environmentally friendly “green” construction.

The next stimulus package is likely to include tax cuts, and higher education groups also see an opportunity there to promote improvements for students and families. Broadening tax credits for college tuition is a USSA priority, Peoples said. Too many families fail to use the HOPE Scholarship or Lifelong Learning tax credits, and President-elect Obama has called for a $4,000 college tuition tax credit.

Many Capitol Hill lawmakers also like the idea of new tax credits. “Tax relief, done in a refundable form, can work hand-in-hand with Pell Grants to ensure more opportunity,” said Rep. Lloyd Doggett, D-Texas. Doggett sits on the Ways and Means Committee, which has jurisdiction over taxes, trade and social security.

Greater college affordability may soon gain visibility in the Senate, where the idea is among the first of 10 bills scheduled to be introduced by Democratic leaders. The bill list, obtained by Diverse, includes an Education Opportunity Act of 2009 to improve college affordability, strengthen math and science instruction and provide more early childhood education programs.

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