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January 28, 2009
Economic Stimulus Bill Expected to More Than Double Federal Government Spending on Higher Education
The January 28, 2009, issue of the New York Times reports that the $825 billion economic stimulus bill that Congress is scheduled to vote on today would significantly increase federal spending on education, including increasing support for student loans and more than doubling the Department of Education's discretionery budget. Here is an excerpt from the article:
One provision, which was sought by the student lending industry and went unmentioned in early Congressional summaries of the stimulus package, would temporarily increase subsidies to banks in the guaranteed student loan program by tying them to a new index, partly because recent federal intervention in the credit markets has invalidated the previous index. A spokesman for Sallie Mae, one of the largest student lenders, said the change was needed to keep student loan markets fluid. Critics said it represented a potential new windfall for lenders.
. . .
The Department of Education’s discretionary budget for the 2008 fiscal year was about $60 billion. The stimulus bill would raise that to about $135 billion this year, and to about $146 billion in 2010. Other federal agencies would administer about $20 billion in additional education-related spending.
“This really marks a new era in federal education spending,” said Edward Kealy, executive director of the Committee for Education Funding, a coalition of 90 education groups.
For the entire story, see "Stimulus Plan Would Provide Flood of Aid to Education" in the January 28, 2009, issue of the New York Times.
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The good news, however, is that a new stimulus bill for education is being proposed in congress to address these student concerns. The stimulus bill will be designed as a two-year block grant for state education budgets, in order to protect the jobs of teachers (and other public service personnel), as well as improve campus infrastructure. This stimulus bill could amount to a total education budget of $140 billion by the time it expires.
Posted by: grants | Jan 29, 2009 2:04:46 AM