Stimulus bill offers tuition tax credits

President Barack Obama signed an economic stimulus bill into law Tuesday that will, among other provisions, increase the availability of grants and tax credits for college and university students.

The most significant higher education spending item in the $787 billion bill is $16 billion in new funding for the federal Pell Grant Program. The provision will increase each student’s maximum annual grant by about $500 — to $5,350 in 2009 and $5,550 in 2010.

The bill also includes a $14 billion tax credit that will increase the maximum tax credit per student to $2,500 per year from $1,800 and will, for the first time, allow students to write off the costs of textbooks and tuition.

Some education spending allotted in previous versions of the bill, including increases in the maximum federal Stafford loan, were cut from the final version.

Richard Schott, an education policy professor at the LBJ School of Public Affairs, said the bill would address the problem of rising tuition rates, which he said have “far outstripped” the availability of student loans for the last decade.

“My hunch is it won’t close the gap, but it will improve it,” Schott said.

Sherri Greenberg, an education and government lecturer at the LBJ School of Public Affairs and a former member of the Texas House of Representatives, said the bill included a significant amount of new money for students.

“You get up to $5,550,” she said of the new Pell Grant maximum. “That’s going to cover a significant part of the cost to attend UT.”

The bill was widely supported by Democrats in Congress and almost universally opposed by Republicans, but there was bipartisan support among Texan politicians for some of the higher education spending in the bill.

“This economic recovery legislation offers real recovery for most Longhorns,” said Rep. Lloyd Doggett, a Democrat from Austin who pushed to insert the new tax credit into the bill.

“This $14 billion tax cut that I authored, together with the increase in Pell Grants and other initiatives, represents the largest increase in student financial assistance in recent memory,” Doggett said in an e-mail to The Daily Texan.

Republican Sen. Kay Bailey Hutchison said she voted against the bill “because it didn’t provide enough tax relief” but that she supported the increased Pell Grant funding.

“Pell Grants are an important way we can lessen the burden on students trying to pay for college,” she said in a statement released by her office.

Republican Sen. John Cornyn also opposed the bill and supports the Pell Grant funding in it.

“[Cornyn] has voted for increases in the past and will continue to support increased Pell Grant funding,” said Jessica Sandlin, the senator’s spokeswoman, in an e-mail. “He believes these grants help to open the door to quality education for all Texans.”