Financial Aid Update: Mostly, More Money for Students
Here's an update, plus a rundown of additional financial aid and higher education assistance the American Recovery and Reinvestment Act (ARRA) provides:
For those readers sweating the fate of 6 million low-income Pell Grant recipients who were about to get short-changed by Congress, you can rest easy. ARRA allocates $17.1 billion to cover the funding gap for Pell and increases the maximum award from $4,850 to $5,350.
The stimulus also dedicates close to $14 million to raise tuition tax credits to middle class families to $2,500 for four years up from $1,800 for two years, according to the Department of Education.
Still awake? ARRA also provides $200 million for work study programs, extends the Tuition and Fees tax deduction through 2009 and expands the so-called 529 college savings plans (tax-free investments to cover tuition) to include some costs related to college, such as computers.
Obama's forthcoming FY2010 budget proposes additional funding increases as well as changes to federal student loan programs. As it stands, the budget would increase Pell Grants by an additional $200, raising the maximum award to $5,550. It would also eliminate federal subsidies to Perkins and Stafford loans, but the Administration says they'll work with Congress to expand the Perkins program to include more schools and, therefore, more students.
All this is going to an ever-growing pool of students -- many of whom, as I wrote in January, are seeking refuge on campus during the economic crisis and/or are having a harder time paying for school on their own.
My story noted that record numbers of students were filling out the Free Application for Federal Student Aid (which may get an overhaul or be chucked entirely in Obama's FY2010 budget), the first step toward receiving financial aid. That pace has continued since: In the week ending March 1, FAFSA applications are up 18 percent over the same week last year.