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The American Recovery and Reinvestment Act of 2009

Stimulating Higher Education

What has been set aside for education?

The recent massive increases in Federal spending have made for dramatic headlines and staggering and varying analyses. But how will the American Recovery and Reinvestment Act of 2009, as it's officially called, affect higher education? And does the bill have any implications specifically for distance learners?

Many people have commented on what's in this bill, but often from secondhand information. As a comparison, we here at eLearners.com decided to take a look at the bill itself.

Most of the bill's support for education concerns primary and secondary education, meaning from kindergarten through twelfth grade, especially initiatives popularized by the media such as funds for school maintenance and construction.

However, there are also a number of points important to higher education that reveal themselves on careful reading.

Pell Grants have an increased budget to provide more aid to students.

The first of these is a section on Student Financial Assistance. The bill says:

For an additional amount for "Student Financial Assistance" to carry out subpart 1 of part A and part C of title IV of the Higher Education Act of 1965 ("HEA"), $15,840,000,000, which shall remain available through September 30, 2011: Provided, That $15,640,000,000 shall be available for subpart 1 of part A of title IV of the HEA: Provided further, That $200,000,000 shall be available for part C of title IV of the HEA. The maximum Pell Grant for which a student shall be eligible during award year 2009-2010 shall be $4,860 (p. 69).

This section is particularly important to low income students, because it increase the amount available for Pell grants, which unlike student loans are money that never has to be paid back. This increase is especially important because the maximum annual Pell Grant has been a fixed amount for several years and has not risen automatically with the rate of inflation.

To consider the impact of this, imagine if you are given a certain amount to buy food every year, but that amount never goes up. Now consider how much the prices of things at the supermarket go up every year. After a few years, your food budget would get tighter and tighter as your same annual amount bought less and less.

The same thing has been true for Pell Grants, but now the amount will catch up to where it would have been had annual increases been in place.

Additional funding will make the system operate better.

A second related section allows for $160 million for student aid administration. While this isn't money that will be directly received by students, it enables the overall financial aid system to function smoothly, better ensuring that the loans and grants that students need will be available when they need them.

This is especially helpful for distance learning students, many of whom must go through their entire financial aid process without the benefit of a personal meeting with a financial aid counselor.

Larger budget for educational research.

A third section provides funding for the Institute of Education Sciences, the division of the U.S. Department of Education that performs research. The bill says:

For an additional amount for "Institute of Education Sciences" to carry out section 208 of the Educational Technical Assistance Act, $250,000,000, which may be used for Statewide data systems that include postsecondary and workforce information, of which up to $5,000,000 may be used for State data coordinators and for awards to public or private organizations or agencies to improve data coordination (p.69).

"Data coordination" may not seem directly helpful, but the better that policy makers can pinpoint the upcoming needs for industry, the better suited the programs that colleges and universities offer will be for students — including distance learning students — who are going back to school to further their careers.

More money is available for job training.

There is one more section of the bill that has possible ramifications for higher education, although it's actually found in the section on labor rather than education itself. Pages 58 and 59 outline how nearly four billion dollars is to be spent on workforce training. This includes:

• large grants to state governments to spend on adult employment and training activities
• youth activities
• dislocated worker employment and training activities; and
• program of competitive grants for worker training and placement in high growth and emerging industry sectors, especially careers in energy efficiency and renewable energy and the health care sector.

The section concludes that "a local board may award a contract to an institution of higher education or other eligible training provider if the local board determines that it would facilitate the training of multiple individuals in high demand occupations, if such contract does not limit customer choice."

That means that in many cases, states and localities may use local community colleges and public universities as the recipients for these workforce training funds.

Even when that funding does not go toward the development of degree programs, but even when the money is spent on another function that will free up other scarce monies to continue the offering of existing programs and development of new ones — including distance learning programs.

How our children will benefit from the Act.

Finally, as noted, most of the education spending in the bill supports primary and secondary schools. This may lead to indirect benefit to higher education as well.

For starters, when state departments of education have more help meeting their funding needs for K-12 concerns, they are better able to look at what should be better supported in higher education. But another benefit of special interest to distance learners may be the funds available to support an increase in the use of educational technology in primary and secondary schools.

The more accustomed incoming college students are to the use of technology, the more they expect it to continue during their university years. As institutions of higher education rise to meet these expectations, distance learning can only benefit.

Proposed changes to lending are being discussed.

While this is not a section of the stimulus bill, another change that may affect all higher education students is the proposal by the Obama administration that federal students loans should be administered and distributed by the U.S. Department of Education rather than by private lenders like Sallie Mae® and Citibank®.

The thinking behind this change is that cost savings can be achieved by eliminating the banks that are in between the federal government's money and the students who are receiving it, and that these cost savings can turn into lower interest rates for student borrowers.

Additional funding yields both direct and indirect benefits.

To summarize, the American Recovery and Reinvestment Act of 2009 has many potential sections of interest to college and university students, including online and distance learners.

While most aspects of the bill will be of only indirect benefit, the increase in the amounts available to Pell Grant recipients is of direct concern to low income students, including those struggling to improve their lives through the opportunities provided by distance learning.

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Steve Foerster is Director of E-Learning at Marymount University in Arlington, Virginia and is on the Advisory Board of WikiEducator, a project sponsored by the Commonwealth of Learning to develop free educational materials for use in the developing world.

We welcome all comments directed to: recession [at] elearners [dot] com.