How Education Students Can Benefit from the Stimulus Plan

Pell Grants

Pell Grants provide tuition assistance to low-income students attending technical schools, colleges or universities. Students may use their grants at any one of approximately 5,400 participating postsecondary institutions.

The stimulus plan increases the maximum Pell Grant amount a student can receive from $4,850 to $5,350 per year. Unlike a loan, grants do not have to be repaid.

To apply for a Pell Grant, you will need to complete the Free Application for Federal Student Aid (FAFSA) available through the U.S. Department of Education. Criteria used to determine eligibility for a Pell Grant include the following:

• Your Expected Family Contribution (EFC)
• Whether you enroll as a full- or a part-time student
• The cost of tuition
• Other (consult the FAFSA website)

For more information on Pell Grants, see our financial aid article.

Federal Hope Scholarship Tax Credit

The Hope Scholarship is an education tax credit that offsets a student's or a family's tax liability.

Until now, the Hope Scholarship tax credit was available only for the first two years of college, and could reduce your tax liability to zero but couldn't result in a refund.

For 2009 and 2010, the stimulus plan increases the Hope tax credit from $1,800 per year for the first two years of college to $2,500 per year for all four years of college. Plus, the tax credit will now be 40 percent refundable, and will cover the cost of textbooks.

You can qualify for this tax credit if your individual income is less than $80,000 or your family's combined income is less than $160,000. You can claim the Hope tax credit for yourself, your spouse or a dependent. For more information on the Hope Scholarship tax credit, contact the IRS.

Job Training

The stimulus plan finances job training programs for high-demand professions if development of those professions will help meet the president's long-term vision for the country. Here are specific areas that are targeted for job training:

• Technology in education—The stimulus plan finances technology upgrades in schools, including money for computer and science labs, and teacher technology training.
• Health care—Both doctors and nurses will benefit from this provision, along with medical school graduates who agree to practice in underserved communities.
• Energy efficiency and renewable energy professions—With the environment a primary focus for the country's future, $500 million is allocated to career training in this field.

Federal Work-Study (FWS) Program

College students will benefit from the $200 million in the stimulus plan allocated for the Federal Work-Study Program, which provides part-time jobs for students who need help paying for college.

According to the U.S. Department of Education, approximately 3,400 postsecondary institutions participate in the FWS Program. You become eligible for the program based on financial need, which is determined by the information reported in your FAFSA.

The Stimulus Plan Helps You Go to College

The stimulus plan increases the government's commitment to your college education. With government increases in financial aid, you will pay less for your education and owe less when you graduate.

Starting your career with minimal school debt allows you to get experience teaching with fewer financial worries. And remember: the more education you get and the sooner you gain work experience, the greater your career advancement and earning potential.

Whatever your political affiliation, it's worth investigating the financial incentives in the 2009 stimulus plan. Everyone owes it to themselves to take advantage of the additional money earmarked for education.