In the News: College Financial Aid Could Get Big Boost Under Obama Stimulus Plan
CNN Money reported today that President Obama’s Stimulus Plan is set to help college students worried about how to pay for tuition, room and board. While the plan, known as the American Recovery and Reinvestment Act of 2009, still needs to be approved by Congress, some of the most student-friendly changes would include:
>> Increasing the HOPE Scholarship tax credit
First and second year students are eligible for the HOPE scholarship, which makes tax credits available to all students (and their families) during their first two years of college. Originally, the credit was equal to 100% of the first $1,000 in tuition and fees and 50% of the second $1,000. Under the President’s plan, the credit would be bumped up to $2,500 and would be eligible to cover not only the cost of tuition but also of textbooks. The President’s stimulus plan would simultaneously raise the income level of qualified applicants, so that more families would qualify for the credit.
>> Increasing the Pell Grant
The Pell Grant is a need-based grant for some 7 million students from low-income families (most of whom earn less than $50,000/year). Under the President’s plan, the amount of the grant would increase by $500 to $5,350.
>> Increasing the Stafford Loan Limit
There are two types of Stafford loans — subsidized and unsubsidized. To qualify for an unsubsidized Stafford loan, a student does not need to show financial need. Both types of Stafford loans offer better terms and lower interest rates than private student loans. The President’s plan would increase the limit of the unsubsidized loan to $7,500/year for freshmen, up from $5,500. Sophomores could take out $8,5000/year instead of $6,500 and juniors and seniors would be eligible for $9,500/year rather than $7,500.
So all in all, definitely some good news for college students on the President’s second day in office — assuming the plan is approved by Congress.
Stay tuned later this weekend for a list of new scholarship announcements.