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Stimulus expands higher ed funding

Brown, other colleges and universities and many individual students stand to gain from the stimulus package signed by President Obama last month.

The bill, officially called the American Recovery and Reinvestment Act of 2009, will provide between $50 billion and $75 billion for students and colleges, Inside Higher Ed reported last month. A large portion of the money will go to student aid and infrastructure improvement and will benefit both public and private institutions, though in different ways.

For some Brown students, the package will make tuition more affordable, while the University can expect to enjoy more access to research funds and could even receive additional support for capital projects.

And Rhode Island's state government stands to receive an injection funding for public education, some of which would be directed to the state's cash-strapped public colleges and universities.

Brown officials praised the bill, saying it included important investments in education that would pay dividends now and in the future.

In an e-mail to The Herald, President Ruth Simmons wrote that investing in education was important to stimulate the economy. "It would be short-sighted to forego needed investments in education for short term economic gains," she wrote. "Education is the foundation of a healthy modern economy. Education enables economic development, job growth, broad social advancement and equality, quality of life and the health of our democracy."

Student Aid

According to James Tilton, director of financial aid, the bill will help students paying for school.

"Brown has a significant commitment to student aid, and the stimulus package helps us do that," he said. "It's a really good thing for our students."

The bill provides about $17 billion to increase Pell Grants, which help low-income students finance college. According to Tilton, the maximum individual grants will increase from $4,850 to $5,350 for the fiscal year 2010, which begins this July.

Tilton also said that under President Obama's budget, which was delivered to Congress last week, the grants will increase annually starting in fiscal year 2010 at a rate of inflation plus one percent, in perpetuity.

At Brown, 2,410 students - 40.5 percent of the student body - currently receive need-based financial aid, and 30 percent of financial aid recipients receive Pell Grants, Tilton said. Starting next semester, these families' grants will increase by a maximum of $500, though some families will receive a smaller increase, he said.

Because a greater portion of some students' aid will now come from Pell grants, the University will be able to put that money back into its aid budget.

The increase also has symbolic importance, Tilton said.

"It sends a message to families that there's help," he said, noting that "there were many years that Pell didn't increase at all."

The bill will also provide an additional $200 million to the federal work-study program, according to Tim Leshan, director of government relations and community affairs.

According to Tilton, the University currently receives $1.3 million from the federal government to help fund on-campus jobs for the 1,430 students eligible for work-study this academic year. Because the $200 million will be spread between all schools currently receiving funding, Tilton said his "sense is that it's unlikely that any one school will see a huge increase, though we would welcome any increase."

Brown students eligible for financial aid are not the only ones helped by the bill, which also allocates $13 billion to expand the federal tuition tax credit program by temporarily replacing the Hope Scholarship tax credit. The credit will now be available to more middle-class families, with an eligibility cutoff of $180,000 in adjusted gross income for families filing joint returns, as opposed to the $116,000 cutoff for the Hope credit.

The maximum tax credit will be increased from $1,800 to $2,500 for the fiscal year 2010, and the length of time that families may use the credit will be increased from two to four years.

The credit will also be extended to cover four million additional low-income students whose families do not pay income taxes, according to Kerrie Bennett, press secretary for Rep. Patrick Kennedy, D-R.I, who voted for the bill.


The stimulus package includes a $53.6 billion State Fiscal Stabilization Fund that will be administered by the Department of Education and will go directly to state governments, to be used primarily for education funding.

The fund allocates $8.8 billion to state governors, who can use it to fund government services including public safety and educational and facility improvement. Because this funding is at the governor's discretion, its direct effects on private institutions are unclear right now, Leshan said.

"The state is still trying to work out how those funds will be distributed," he said. Though Leshan said Brown was "not counting on getting funds from the state stabilization fund," he noted that some private colleges, including Brown, are nevertheless encouraging the governor to use some of the money on modernization projects on their campuses.

"Before the stimulus was even passed, we were asked to provide a list of possible projects," Leshan said. "Projects we've talked about include things like the medical education building and other core infrastructure that Brown usually does work on during the summer - things like updating utilities and the like."

Brown is "not depending" on the money, Leshan said, but added that with the construction slowdown announced at last month's Corporation meeting, stimulus money "could be a benefit to these projects moving forward."

Dan Egan, president of the Association of Independent Colleges and Universities of Rhode Island which represents the interests of Rhode Island's eight private colleges and universities, said the state's private colleges offer "shovel-ready opportunities." These can benefit the state's economy in both the short and long term by replacing construction jobs lost to the shrinking housing market and "strengthening the knowledge economy, which will benefit the economy in the long term."

The fund also allocates $10.4 billion to the National Institutes of Health and $3 billion to the National Science Foundation, The Herald reported March 2.

Public schools

Public colleges and universities, in Rhode Island and nationwide, will reap particular benefits from the bill.

"Public institutions of higher education could gain a great deal," wrote Steve Maurano, a spokesman for the Rhode Island Board of Governors for Higher Education, in an e-mail to The Herald.

Another $39.5 billion of the State Fiscal Stabilization Fund will be distributed to states for public K-12 and postsecondary education and may be used to prevent layoffs, replace budget cuts and modernize facilities.

Maurano estimated that Rhode Island's share would be about $165 million.

But, he said, the state is in danger of not qualifying to receive these funds because of a provision in the bill called "maintenance of effort," which holds that in order to qualify for these funds, a state must provide no less support to education than it did in fiscal year 2006.

Only Rhode Island's and New Jersey's funds are in danger of being withheld under that provision, according to a Feb. 27 article in the Chronicle of Higher Education.

"With the budget deficits in Rhode Island and the cuts that public higher education has absorbed over the last few years, we are not at 2006 levels," Maurano wrote.

"Rhode Island's slide into the recession (came) earlier than other states and our budget deficits have been larger (percentage-wise) than other states," he wrote. "As a result, we began cutting higher education funding sooner than most states. So while most states are still funding public higher education at or above the levels they were in 2006, we are not."

Maurano wrote that the specific rules regarding the maintenance of effort provision had not yet been published, so it is currently unclear how much the state needs to make up in funding.

Dave Lavallee, spokesman for the University of Rhode Island, said this money was sorely needed in Rhode Island, which has been hit especially hard by the economic crisis.

"Finances are always an issue, but the past couple of years have been particularly difficult," he said.

In addition to the stabilization fund, Maurano wrote that state colleges and universities may also gain from other provisions scattered around the 500-page bill. The legislation includes competitive grants and other areas of funding which may have some small effects on two-and four-year colleges, he wrote.

- With additional reporting by Etienne Ma



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