The most important question I am sure being asked right now by students and teachers all over the country is, whether Obama Stimulus Plan for Education is really the largest educational investment in US history?
On February 17, 2009, President Obama signed the ARRA (American Recovery and Reinvestment Act of 2009) into law. While he was in the signing ceremony of the Stimulus Bill at Denver, Obama described this package to be amongst the ‘largest educational investment in US history’.
Education Stimulus Package Facts
Surprisingly, the House-Senate Conference bill came with a smaller price tag ($787 billion) than what was originally passed by either chamber, $820 billion (House) and $838 (Senate).
For achieving this compromise, there were significant cuts made in the House count for the State fiscal stabilization fund. The information has been provided to the respective governors, so that they can cover some of the shortfalls in their budget.
This ‘Stimulus Plan’ is going to provide US Education Department with almost $100 billion over the coming two years for saving education jobs, sending young individuals to colleges, modernizing classrooms across the nation and getting reforms in the school & college education pattern. This number has come down from a proposed figure of $145 billion, which were to be provided by the Original House Bill. Still, if you consider the amount, which the department received in 2008 ($59.18 billion), the change has been quite significant (almost double the previous one).
Stimulus Bill Effect on US College Education
The stimulus bill has billions to fund several aspects of education, even though some experts believe that the fund may not be enough for paying all the projects. Amongst the provisions in this new legislation are Pell Grant enhancement, tax credits, funding IT education and regulatory charges for College Saving Plans.
Education tax credits are going to be cut by $2,500 in the costs for tuition fees in college education to eligible families. However, experts are worried that households with low incomes may not feel the impact of this difference.
The encouraging fact is that starting July 1, the minimum Pell grant level is now going to increase from $4,731 to $5,350. In 2010-11, this figure is going to be further increased to $5,550. Thus, there is a possibility of another 800,000 students to be eligible for this scholarship grant. Apart from this, families are now going to be allowed for buying computers and similar technological gadgets by taking funds as loans from College Saving Plans (Section 529). However, final version of the stimulus bill has reduced the support for IT education by 35% (from $1bn to $650 million).
All and all, the stimulus bill contains a probable $32bn for higher education in US.
Merits of Education Stimulus Bill
- Taxpayers, who earn up to $80k (or $160k in case of joint filers), will find their tax bills reduced, dollar-for-dollar on the first $2,000 of books and tuition.
- Taxpayers, who do not have to pay taxes, are going to get refunds through these bills.
- Apart from providing affordability to the college education, students will be allowed taking either deductions or education credits every year.
- Student loans for those students who perform community service or national service.
Demerits of Education Stimulus Bill
Struggling families, especially the ones that have faced the impact of the economic meltdown, may not be able to make full use of the tuition fees reduction, as the sum only gets increased over a period.
Again, IT Education, International Society for Technology Education & Consortium for School Networking are aggrieved with what the bill has got for them.
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