Obama Signs Economic Stimulus Bill Into Law

President Barack Obama signed the $787 billion economic stimulus bill into law yesterday providing significant funding for Pell Grants, education tax benefits and higher education institutions to compensate for state budget cuts.

The new law provides:

Roughly $17 billion to increase the maximum Pell and eliminate the program's current shortfall. The funding will increase the maximum Pell to $5,350 in 2009-10 and $5,550 in 2010-11.
Nearly $14 billion to temporarily replace the Hope Scholarship with a new $2,500 tax credit for tuition and other expenses - including textbooks. The new credit will benefit lower-income families who do not pay taxes because 40 percent ($1,000) is refundable. It is also available to families with higher incomes as it is phased out for people making $80,000 ($160,000 for families with a joint income).
$200 million for the Federal Work Study program

The new law does not include a House proposal to increase unsubsidized Stafford Loan limits $2,000 or a Senate proposal to provide $60 million in federal contributions for the Perkins Loan program.

Congress passed the stimulus package - the American Recovery and Reinvestment Act of 2009 (H.R. 1) last week with little Republican support. The House passed it on the Feb. 13 by a 246 to 183 vote with no Republicans supporting the bill. The Senate passed it later that evening by a 60 to 38 vote after holding the vote open for five hours to ensure enough support to prevent Republicans from stalling the bill.

"We are truly grateful to Obama and his administration for fighting to get this bill passed with meaningful increases in financial aid for needy students," NASFAA President and CEO Dr. Philip Day said in a press release. "The financial aid funding in this bill will pay for itself many times over by enabling students to receive the education and training they need to succeed in the increasingly competitive global economy."

Posted 02/18/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.