Compromise Stimulus Bill Expands College Grants but Not Student Loans

After weeks of back-and-forth political jockeying over President Obama’s proposed economic stimulus package, Congress settled on a compromise bill that offers expanded federal grants and tax benefits to college students, along with funding for states to restore education budget cuts and for research institutions to expand their development.

Overall, the final stimulus bill will deliver between $50 billion and $75 billion to higher education, estimates Inside Higher Ed.

No Stimulus Help for Student Loans

In previous years, non-federal private student loans have offered undergraduate and graduate students a source for additional financial aid that they could use to supplement their federal student loans and grants. But in the face of the current credit freeze, most lenders of private student loans have suspended their private-loan programs or simply gone out of business altogether.

Those few lenders that still offer private student loans have tightened their credit criteria to the point that many students and families can no longer qualify — especially as borrowers’ credit scores continue to take hits from foreclosures, missed bill payments, and cancelled credit cards.

In the current economic environment, with unemployment climbing, home equity largely gone, the value of investments and college savings plans evaporated and private student loans hard to come by, more and more families are finding themselves unable to meet tuition and other college costs on federal student aid alone.

To help the growing number of cash-strapped students who will need additional financial aid on top of federal grants and student loans, the House of Representatives, in its version of the stimulus bill, had proposed to increase borrowing limits by $2,000 on unsubsidized federal college loans, which are available to eligible undergraduate and graduate students regardless of their financial situation.

The Senate version of the stimulus legislation, on the other hand, would have injected $61 million into the federal Perkins student loan program, providing additional funding for those subsidized federal college loans targeted at the neediest students,.

But the compromise bill does neither. The stimulus funds for higher education will go toward expanded grants, work-study, and tax benefits, with no money earmarked for federal student loans.

The Higher Education Stimulus for Students

 American Opportunity Tax Credit: Proposed by President Obama on the campaign trail, this tax benefit program will temporarily replace the current Hope Scholarship Tax Credit, raising the currently available maximum education tax credit from $1,800 to $2,500. The new tax credit will be available for up to four years of college and will be up to 40 percent refundable for those families who don’t owe any taxes.

 Federal Pell Grants: The federal grant program for low-income students will receive an additional $17.1 billion in funding.

 Federal Work-Study Program: This federal financial aid program, which allows eligible students to earn money working part-time in government-subsidized jobs, will receive $200 million in funding.

The Higher Education Stimulus for States

States will receive $53.6 billion in education stimulus aid over the next two years, $39.5 billion of which will be used to restore spending cuts made to education and public colleges as a result of state budget deficits, and $8.8 billion of which will be handed to state governors to be used for high-priority “critical” initiatives, which can include education programs and school facilities improvements and maintenance.

The Higher Education Stimulus for Research Institutions

 National Science Foundation: A federal agency dedicated to research and training in all fields of non-medical science and engineering, the NSF will receive a total of $3 billion, with $2.5 million allocated for research, $400 million for infrastructure, and $100 million for education.

 National Institutes of Health: Part of the U.S. Department of Health and Human Services and the primary federal agency for conducting and supporting medical research, the NIH will receive $10 billion — $8.5 billion for research and $1.5 billion for university research facilities.

 Department of Energy: The DOE, which oversees U.S. energy and nuclear security, will receive $2 billion for research, with $1.6 billion going to the Office of Science and $400 million going to the Advanced Research Projects Agency for Energy (ARPA-E).

The views express herein may not be those of the Foghorn Online. This content has been submitted by the greater online community and reviewed for basic discretionary content by our editors. For any other further questions, please contact


37 thoughts on “Compromise Stimulus Bill Expands College Grants but Not Student Loans

  1. Raise the Nation offers SPAOA Members (Single Parents Association of America) scholarships for Single Parents and their children. Thank you for your continued support of our organization. We hope that these changes will help us build our capacity to help our community of single parent women and their children. SPAOA.ORG

  2. Thanks for the good writeup. It in truth was once a enjoyment account it. Glance complex to more delivered agreeable from you! By the way, how could we communicate?

  3. Compare mortgages with our range of loans… It is impossible to receive an online quote that will show you an accurate reflection of the best home loan productes…

  4. Your current talk about is extremely good and I will certainly reveal that along with my friends as well as zynga associates. Basically had a web page within your market I would provide you with link exchange. Ones write-up need more exposure along with expect my personal bookmarks can help you get more traffic. Nice content, once again ! !

  5. I love a new personanybody content thanks forthank anyone forthank you with regard to discussingtalking aboutrevealingindicating the particular dataunderstanding.

  6. I wanted to send you one little note to finally give thanks yet again for all the unique suggestions you have documented in this article. It’s simply extremely open-handed with you to give publicly just what a few people could have made available as an ebook to earn some bucks for themselves, principally considering that you could possibly have tried it if you decided. These basics additionally served to become great way to be certain that other people online have the same desire like my personal own to understand many more pertaining to this problem. I believe there are some more pleasurable occasions in the future for those who read your website.

  7. An interesting discussion is price comment. I think that you should write extra on this matter, it might not be a taboo topic however typically individuals are not enough to talk on such topics. To the next. Cheers

  8. Thank you for all your valuable hard work on this web site. My aunt delights in setting aside time for internet research and it’s really easy to understand why. Most people hear all about the compelling form you render good guides via this website and improve participation from some other people on the area and our own child is always discovering a great deal. Take pleasure in the remaining portion of the new year. You’re carrying out a very good job.

  9. This site is known as a stroll-by for all of the info you wanted about this and didn’t know who to ask. Glimpse right here, and also you’ll undoubtedly discover it.

  10. I was very happy to seek out this web-site.I needed to thanks to your time for this glorious read!! I definitely having fun with each little bit of it and I have you bookmarked to check out new stuff you weblog post.

  11. Oh my goodness! an amazing article dude. Thanks However I am experiencing challenge with ur rss . Don’t know why Unable to subscribe to it. Is there anybody getting an identical rss problem? Anyone who is aware of kindly respond. Thnkx

  12. There are some attention-grabbing time limits on this article but I don’t know if I see all of them heart to heart. There’s some validity but I’ll take maintain opinion until I look into it further. Good article , thanks and we want more! Added to FeedBurner as properly

  13. The subsequent time I learn a blog, I hope that it doesnt disappoint me as much as this one. I mean, I know it was my choice to learn, but I really thought youd have one thing attention-grabbing to say. All I hear is a bunch of whining about one thing that you possibly can fix when you werent too busy searching for attention.

  14. Now, they’re turning their microscopes on the ways to get ex back rules parents set, with some surprising she acts and through how she positions her dead body when she’s with you.
    Arias wasextradited to ArizonaSeptember 9, 2008 on his worked up needs for you – the ones he inhumed when the
    family relationship concluded. If you’re honorable, it’s pretty personal profile and await
    until they get approved and Get searching and interacting with other American singles in
    their arena.

  15. This became an industry unto itself and best web hosting ( reseller sites sprang up where people could park and resell the Best Web Hostings they had registered.

    In the late game, the Bruins and Capitals went toe-to-toe again and these
    two teams were scoreless into overtime, which the society saw as having numerous drawbacks.
    Go for it if you give them a yahoo address as your contact address.

  16. What’s up colleagues, how is the whole thing, and what you would like to say regarding this piece of writing, in my view its really awesome for me.

  17. Howdy, i read your blog from time to time and
    i own a similar one and i was just wondering if you get a lot of
    spam feedback? If so how do you reduce it, any plugin or anything
    you can advise? I get so much lately it’s driving me crazy so any help is very much appreciated.

Leave a Reply

Your email address will not be published. Required fields are marked *