The House of Representatives may be voting on President Obama’s stimulus bill that promises student aid, a.k.a. The American Recovery and Reinvestment Act, that could make the federal Pell Grant Program seem half its size in comparison. Obama’s stimulus bill could provide billions of dollars in spending and financial aid for many colleges and universities across the country. President Barack Obama’s request for an $825 billion stimulus financial aid package to combat the countries current recession and invest in health care, education and infrastructure programs was the basis for which he modeled this economic stimulus bill. The bill would enlarge the Pell Grant Program significantly. The Pell Grant Program distributes federal grants to around 6 million university students in the United States every year. Congress was warned last year by the Department of Education that the program would be facing a $6 billion shortfall in 2009 if additional funding is not obtained.
On a side note, the stimulus act increases funding for Pell Grants and goes to students from low and moderate income families to those who make less that $40,000 annually. The good news is Pell Grants don’t have to be repaid and you can use them for tuition and living expenses.
Funding for the program would be increased by this bill by about $15.6 billion but in 2008 was $16.2 billion. The maximum grant per student would be raised by from the current $500 per student, to a whopping $5,350 annually.
An increase of $2,000 per student in student loans and more tax credits for students is also wrapped into this bill. There is also a $490 million program which would support working students, as well as $6 billion dollars to modernize buildings, and $39 billion dollars available for state governments to distribute to public colleges and school districts across the country.
The house bill is expected to pass with most of the Democrats supporting the vote as well as President Barack Obama. Once it passes, it will most likely take several weeks for the bill to become law and the House and Senate also need to agree on bill that is an identical version before it can become law. Opposition for the bill is expected to come from the Republican side of the aisle. Some republicans have said that spending money on colleges that have billion dollar endowments is not the right way to approach it. It just so happens that the bill is loaded with hundreds of billions of dollars in spending on projects and programs which will not impact our ailing economy for many years, if they ever do.
The publisher of Finaid.com, Mark Kantrowitz estimates that the bill will raise the number of Pell Grant recipients by approximately 800,000. There are those that won’t get the maximum grant benefit because they will be on the fine line of eligibility.
Obama’s budget would in turn make the grants similar to many other entitlement programs like Social Security and
Medicare, by money automatically going into the program every year according to a formula.
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