Stimulus Student Aid InformationStudent Financial Assistance & The American Recovery and Reinvestment Act
The final legislation added $17.1 billion to the federal Pell Grant program. This will boost the maximum Pell Grant award by $500 to $5,350 in the coming academic year and $5,550 in 2010.* Students with family incomes up to $60,000 may be eligible for Pell Grants. There is no charge to apply for a Federal Pell Grant, but you must complete a Free Application for Federal Student Aid (FAFSA) in order to access these grants. The size of a student's award depends on a family's income and other factors. The average grant in 2006-2007 was approximately $2,494.
Congress included $200 million for College Work Study programs in the final stimulus legislation. These dollars help support campus-run programs that provide part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. How much aid a student will receive from work study depends on financial need, on the amount of other aid a student receives, and on the availability of funds at each college or university. The federal government will provide a certain amount of funds to each participating college or university to administer each year. Information collected on the FAFSA is used to help colleges distribute these dollars to needy students. The increased funding provided in the American Recovery and Reinvestment Act will allow an additional 133,000 students to participate nationwide.
American Opportunity Tax Credit
The federal stimulus bill temporarily replaces the Hope tax credit with $2,500 credit called the American Opportunity Tax Credit. Called the American Opportunity Tax Credit, the new benefit was authorized for two years by the stimulus bill enacted in February. President Obama has plans to make this tax credit permanent.
Married couples filing jointly who have modified adjusted gross income of up to $160,000 ($80,000 for single parents) can claim the full credit for higher education related expenses for 2009 and 2010. Above that income level, the credit gradually phases out, with those earning up to $180,000 ($90,000 for singles) eligible to claim a partial credit. The new credit is also partially refundable. What that means is a family which doesn't earn enough to pay federal income taxes but has educational expenses to report can get up to $1,000 in a tax refund. Congress made this new credit partially refundable so that low-income students, as well as middle-income students, can benefit. As a result, the nearly one-fifth of high school seniors who receive no tax credit under the current system will receive a tax cut to make college affordable for the first time.
US Department of Education Recovery Website: link