Colleges and Students Could Benefit From Pending Federal Bailout

Published 21 January 09 04:37 PM | Student Loan Girl

It seems that everyone is getting a piece of the government’s “bailout pie,” including banks, automakers, and perhaps even the nation’s colleges and universities, although exactly how much schools will get and when they will get it has not yet been established, reports Inside Higher Ed (“Manna From Heaven (er, Washington),” Jan. 16, 2009).

While provisions of an $825 billion stimulus package bill drafted by House Democrats earlier this week could change significantly before the bill is ratified by both houses of Congress — the Senate is reportedly in the process of writing its own version of the bill — a rough estimate by Inside Higher Education suggests that colleges and their students could end up benefiting to the tune of tens of billions of dollars in several areas:

Student Aid: $30 billion Nearly $15.6 billion would be used to increase Pell Grant awards by $500 per recipient to $5,350, a move that would help about 800,000 students in the 2009–10 school year and would wipe out the $1.4 billion shortfall projected for next year’s Pell Grant program budget. Some $12.5 billion of the bill would be used to increase the limit on federal unsubsidized student loans by $2,000 and to replace the HOPE Tax Credit with a restructured tax credit worth up to $2,500 to benefit low-income families.
College Grants: $4 billion Community colleges and for-profit schools could receive as much as $4 billion in the form of grants for adult education programs, so that these students may be able to receive career-related or job-education training. Some funds could also be allocated to states in the form of bonds that local governments could use to create “recovery zones” to help those individuals who reside in areas suffering from high unemployment or foreclosure rates.
College Infrastructure: $8.7 billion About $6 billion would be used for “higher education modernization, renovation and repair” and would be distributed to states based on the number of full-time undergraduates attending state institutions. Some $2.7 billion would be allocated to renovate, update, and modernize biomedical research facilities and upgrade equipment, with funding priority given to colleges that “serve high numbers of minority students” or “institutions impacted by a major disaster.”
State Aid: $39 billion A portion of this estimated $39 billion would be given to state governments “to help restore cuts to critical education programs,” including those in higher education. Some of these funds may be used to “restore state support for postsecondary education to the fiscal year 2008 level.”
Academic Research: $8 billion Some $2 billion would be allocated for research on energy efficiency and renewable energy along with $1.9 billion allocated for basic energy studies. An additional $2 billion would go to the National Science Foundation, $1.5 billion would be used by the National Institutes of Health for biomedical research, and $400 million to be used by NASA for climate-change research.