The government is pouring stimulus money into just about every area of the economy right now, and higher education is no exception. The Obama administration, in fact, seems to look on education as one of it’s leading priorities.
Included in the massive $700 billion-plus “American Recovery and Reinvestment Act” that President Obama signed into law in February of 2009 are the following increased grants, loans and tax credits for students, both in online and traditional degree programs:
– The maximum Pell Grant you can be given in a financial aid has been risen from $4,731. to $5,350. per year for the 2009-2010 school year, and to $5,550. for the 2010-2011 year. Pell Grants are available only to students who are working toward their first bachelor’s degree and who are attending school full-time. But as the word “grant” implies, they don’t have to be paid back. Learn more about Pell Grants and how to get them here. At the same time, overall funding for Pell Grants has been increased to allow about 800,000 more students to get them this year than in 2008. This is a big program: it’s estimated that about 7 million Pell Grants will be handed out in 2009 with the new budget infusion.
– The size of an unsubsidized Stafford Loan you can take out will go up by $2,000, increasing the limit to $57,500 total for an independent undergraduate. Eligibility and interest rates for these loans are complex. Learn more about Stafford Loans here.
– A sub-secyion of the Recovery and Reinvestment Act, called the “American Opportunity Tax Credit Program,” provides an additional benefit to students. Starting with the 2009 tax year, you can take a federal $2,500 tax credit for money you spend on tuition, books and other eligible fees. This replaces the Hope tax credit, which allowed you to take up to $1,800 in credits. Under the new Opportunity Tax Credit, you take the full $2,500 benefit by claiming a one dollar tax credit for each of the first 2,000 dollars you spend on education, and 25 cents on each of the next 2,000 dollars.
– If you invested in a 529 College Savings Plan, the purchase of a computer for school is now qualified as an expense under these tax-exempt investments. This wasn’t the case up until last year.
– Additionally, the government is pouring over 4 billion dollars into career training, with a special focus on workers who have been laid off or put out of work permanently by the economy. If you are looking to go in a new career direction, it’s well worth asking colleges – particularly community colleges – in your area what they can offer in training under the “Workforce Reinvestment Act.”