Aid to Students May Prove Short-lived

Although the latest economic stimulus package helps needy college students, this increased financial assistance may be temporary.

With an $800-billion-plus economic stimulus bill likely to become law soon, education advocates are beginning to turn their attention to two critical questions:

With Democrats controlling Congress, lawmakers are likely to approve some type of economic stimulus bill. But for educators, there are still critical questions:

Will the stimulus bill include new education funding? And, if so, will the spending increases become permanent to help low-income students?

The House of Representatives has approved an $825 billion stimulus bill with $140 billion for education, but it is not without critics. As of press time, Republicans had mounted an effort in the Senate to strip many education provisions, declaring them unlikely to help the ailing economy.

The stimulus bill “ought to be oriented directly toward those items that would specifically create jobs now,” says Sen. Lamar Alexander, R-Tenn. “It should not go toward good sounding ideas such as Head Start and Pell Grants for college students.”

While not attacking those two programs, Alexander says Congress should consider spending for these initiatives in a separate bill — not as part of the economic stimulus. That view is gaining traction among other Senate Republicans, who argue that the stimulus should focus primarily on housing assistance and tax cuts.

Democrats will have to secure the support of at least a few GOP members in the Senate to cut off debate and bring it to a vote.

If Republicans are successful in cutting education from the Senate stimulus bill, the issue is far from dead. Education issues likely would be part of final House/Senate negotiations over the legislation, since education is such a major component of the Housepassed bill.

Even as lawmakers debated key provisions of the package, the long-term implications for students remained somewhat unclear. For example, while the stimulus bills include a Pell Grant increase of up to $500, the funding lasts only for two years. Beginning in 2011, Congress would have to find new money to keep the program at that higher level. The current top grant is $4,850.

Asked in a conference call with reporters whether the White House and Congress would make that increase permanent, Rep. George Miller, D-Calif., chairman of the House Education and Labor Committee, said it was too early to tell. “The administration is telling us not to expect it to become the baseline,” or the floor, for future spending after 2010. “We hope to be able to hold on to it.”

Miller said the stimulus is a short-term response to pressing needs. “This is an emergency recovery act,” he added. “We hope there will be a recovery.”

At press time, there was some disagreement on the final amount of increase in the Pell Grant under the stimulus bill for 2009 and 2010. The House-passed version included a $500 increase, while the Senate measure would increase the grant by $281 in 2009 and $400 in 2010.

Nonetheless, student groups expressed hope that the new Pell money would provide an added safety net for needy students in tough economic times. The House bill also included more money for college workstudy, another key program.

“These measures will have an immediate impact on students,” says Angela Peoples, legislative director for the United States Student Association.

As the stimulus bills weaved their way through Congress, a key issue was the balance of spending and tax cuts. Included in both bills is a $2,500 tax credit to help all families better afford higher education. The benefit would temporarily replace the HOPE Scholarship tax credit, which offers less aid.

While tax credits generally help middlerather than low-income individuals — since they have more tax liability — at least some portion of the tax credits would be refundable, meaning that low-income individuals and families can claim those dollars even if they have little tax liability. Peoples also notes that students could apply the credit toward tuition, fees and even textbook costs.

Colleges and universities also will reap some gains for facilities and brick-andmortar projects. A higher education modernization plan in both bills would provide grants to states for high-priority construction and improvements at public colleges and universities.

Each state would decide how to allocate the spending based on current needs, Miller said. The goal is to fund projects that can begin within 60 days to promote quick job creation.

Both the House and Senate have included $13 billion for Title I, the federal government’s chief program to help low-income students and schools. Special education services under the Individuals with Disabilities Education Act also would receive $13 billion over two years. K-12 educators have said both programs are underfunded; Title I, in particular, is an important program for schools seeking to meet demands of the No Child Left Behind Act.

Another key provision in the House and Senate is $79 billion to help stabilize state budgets. About half of this funding would go directly to education to prevent cuts at the state and local levels.

Despite lack of Republican support for the stimulus, Democrats were confident of final approval of a bill. First, however, the House and Senate must bridge differences between their bills on several initiatives. For example, the House bill has $6 billion for higher education modernization, compared with $3.5 billion from the Senate. The latter measure, however, would guarantee some funding for community colleges.

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