As families are struggling in this recession, tens of millions of students are losing the opportunity to go to college. The American Recovery and Reinvestment Act includes key provisions to keep the doors of college open. The bill:
Improves current higher education tax credits, by creating a new “American Opportunity” tax credit with a maximum of $2,500 rather than the current maximum of $1,800 — thereby making college more affordable for millions of low- and moderate-income students.
Also provides this new “American Opportunity” tax credit to nearly 4 million low-income students who had not had any access to higher education tax credits in the past — by making it partially refundable. 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.
Makes college more affordable for 7 million students by increasing the maximum Pell Grant by $500, for a maximum of $5,350 in 2009 and $5,550 in 2010, and also funding the shortfall in the program.
Adds $490 million to the vital College Work-Study program that supports undergraduate and graduate students who work, allowing an additional 200,000 students to participate.
Also makes college more affordable by increasing the limit on unsubsidized Stafford loans by $2,000.
As the National Association of Independent Colleges and Universities stated, “together these proposals mean that low-income students and families on the brink of stopping or dropping out of their higher education plans can stay in, and that unemployed workers can choose retraining for a new job.”
Watch Rep. Tim Ryan of the Speaker’s “30 Something Working Group” on the higher education tax credits:
Learn more from the Committee on Education and Labor: