Statement by NAICU President David L. Warren on the Economic Stimulus Bill and Higher Education

February 13, 2009


CONTACT: Tony Pals,
office: 202-739-0474 cell: 202-288-9333

The compromise economic stimulus bill is a victory for America's college students and their families. The bill's student aid and higher education tax provisions provide crucial assistance to millions of low- and middle-income families at a critical time.

The bill will go a long way in helping make college more affordable for traditional college-age students, as well as for unemployed workers looking to retrain during a poor job market. This investment will keep students from dropping out of college, allow new students to enroll, prevent the job market from being flooded with under-prepared young workers, and keep displaced workers off unemployment lines.

The positive impact of these provisions will reverberate across campuses and into our communities. It will help colleges prevent more lay offs, open the way for them to hire new workers, and allow them to purchase more goods and services from local businesses.

Among the highlights of the higher education provisions for students and families:

  • Pell Grants: $17 billion is provided in the bill for Pell Grants. This money will serve two purposes: to pay off the program's massive shortfall, and to raise the maximum to $5,350 by July 1, 2009 (for the 2009-10 academic year), and to $5,500 by July 1, 2010 (for 2010-11).
  • College Opportunity Tax Credit: $13 billion is provided for a $2,500 tax credit, with 40 percent refundability. This credit replaces the existing Hope tax credit, while increasing it by $700, from the current $1,800. The refundability for people who do not earn enough money to owe taxes is new, as is the ability to take textbook costs as an education expense that can be counted toward the benefit. The credit would phase out at income levels of $80,000 (single filers) or $160,000 (joint filers).
  • Federal Work-Study: An increase of $200 million in funding.

For millions of individuals, these provisions - along with the efforts of colleges and universities - will be the difference in making higher education possible.

According to a survey conducted by the National Association of Independent Colleges and Universities (NAICU) in December 2008, 92 percent of private, nonprofit colleges and universities plan to increase their student aid budgets for 2009-10. In addition, 83 percent of private colleges and universities intend to keep tuition increases for 2009-10 lower than in the past three years, according to a survey conducted by the Chronicle of Higher Education and Moody's Investors Services in December 2008.

NAICU serves as the unified national voice of independent higher education. Since 1976, the association has represented private colleges and universities on policy issues with the federal government, such as those affecting student aid, taxation, and government regulation. With more than 1,000 member institutions and associations, NAICU reflects the diversity of private, nonprofit higher education in the United States. NAICU members enroll nine out of every 10 students attending private institutions. They include traditional liberal arts colleges, major research universities, comprehensive universities, church- and faith-related institutions, historically black colleges, Hispanic-serving institutions, single-sex colleges, art institutions, two-year colleges, and schools of law, medicine, engineering, business, and other professions.


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