Chronicle of Higher Education
Washington
The compromise, $789-billion economic-stimulus bill that Congress is planning to try to deliver to President Obama by Monday contains large sums of money for student aid and biomedical research, and would give states billions of dollars to ease budget cuts to colleges and schools.
College lobbyists didn't get everything they wanted in the plan, which the House and Senate are expected to approve and could take up as soon as today. The measure, for instance, doesn't include the separate pot of money for campus construction that the House had passed or money for the Perkins Loan program that the Senate had approved.
It also excludes a $2,000 increase in annual borrowing limits on unsubsidized Stafford Loans for undergraduates, a provision in the original House bill that student-aid administrators and other groups had pressed but that student groups had opposed. Student-loan companies, too, failed to win a change they sought to the way the government calculates subsidies it pays to lenders that participate in the federal student-loan program. The change, which the House had passed, would have temporarily increased their payment rate.
But, over all, advocates for colleges and students cheered the billions of dollars for education that is in the bill as details of the compromise began to be made public on Thursday. The deal worked out by House and Senate negotiators, which was first announced on Wednesday amid a flurry of intense and hurried last-minute negotiations, includes $95-billion for the Education Department to spend over two years.
The plan would raise the maximum Pell Grant to $5,550 by 2010, an increase that legislators said would help seven million students. (The current maximum award is $4,731.) The aid program would receive $17-billion from the bill, an amount that would also erase a shortfall in the program's budget.
A tax credit for tuition would be increased to $2,500, from its current level of $1,800, for the next two years and would make textbook costs an education expense that could be counted toward the benefit. People who do not earn enough money to owe taxes also would be eligible to take $1,000 of the credit.
The bill would also bolster the Federal Work-Study program, providing $200-million. And it would allow families to buy computers with money they have saved for college expenses in so-called 529 plans, whose earnings are exempt from taxes.
"Fundamentally this is a big win for our nation's students and for colleges and universities," said Larry Zaglaniczny, vice president for governmental relations at the National Association of Student Financial Aid Administrators.
Value to Economy Questioned
Some Republicans and other critics of the stimulus legislation had questioned whether pouring money into student aid would be an effective way of kick-starting the economy and argued it should be cut from the bill.
"The stimulus bill ought to be for programs that create new jobs now," Sen. Lamar Alexander, a Republican from Tennessee, former education secretary, and former college president, said in a speech earlier this week at the annual meeting of the American Council on Education. He said that many of the funds for education included in the stimulus measure should be debated separately, as part of Congress's normal appropriations process.
Higher-education lobbyists and the new education secretary, Arne Duncan, fought to preserve the money, including funds for Pell Grants, as the stimulus package moved through Congress. They considered aid to education to be vulnerable in negotiations, particularly those that occurred among moderate Democrats and Republicans in the Senate who were critical to the measure's fate.
Nancy Pelosi, Democrat of California and speaker of the House, provided a rationale for putting education spending in the stimulus measure in a summary of the compromise plan that she distributed. "Economists tell us that strategic investments in education are one of the best ways to help America become more productive and competitive," the document said.
Money for States and Facilities
The question of whether, and how much, money to include for construction at colleges and schools was one of the stickiest issues for House and Senate negotiators. The House bill had included $7-billion for higher-education facilities, but senators struck all money for college construction from their bill.
The compromise does not include a separate pot of money for campus building projects. But colleges could use some of the money they receive under a "state fiscal-stabilization fund" to repair, modernize, or renovate their facilities. The nearly $54-billion fund includes money for states to limit budget cuts to colleges and schools and to spend on other priorities.
Of that total, close to $40-billion would be set aside for states to funnel to public colleges and school districts, which could use the money in various ways, including to restore budget cuts, prevent layoffs, or modernize facilities. Governors would be given $8.8-billion to allocate to high-priority needs, which could include money for public or private colleges. The rest of the state fund would be distributed by the education secretary to reward performance, based on measures that apply mainly to elementary and secondary schools.
To be eligible to receive money for colleges under the stabilization fund, states would have to meet a minimum bar for spending on higher education, giving their public colleges at least as much in the 2009 and 2010 fiscal years as they spent on them in the 2006 fiscal year. States facing serious financial difficulties could seek a waiver from the secretary of education.
Big Amounts for Biomedical Research
The legislation provides more than $15-billion for research in science and technology, with the majority going to the National Institutes of Health for biomedical studies, and it would allocate $7-billion to extend broadband services to communities that are underserved.
The bill contains $8.5-billion for biomedical research at NIH and $1.5-billion for the agency to spend on renovating university facilities to help them compete for biomedical research grants.
The National Science Foundation would receive $3-billion for basic research in science and engineering under the compromise. And other portions of the bill would give money to research on energy efficiency, climate change, and innovative technologies, among others.
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