U.S. President Barack Obama's proposed economic stimulus package astutely includes a range of support for education at all levels. For Higher Education, this includes increases in student financial aid, which is sorely needed, according to Clifford. He cites convenience for working adults.
"Typically in an economic downturn, displaced workers turn to education to enhance their hire-ability," he says. "Without a steady income, these adult learners depend on available financial aid to pay for their degrees as well as living expenses."
Vincent O’Neal, Director of Financial Aid at Chancellor University in Cleveland, Ohio points out that, "an adult student can receive financial aid, in the form of loans and grants, which will cover their college expenses as well as contribute toward housing, transportation, and other expenses." The amount of aid an individual can receive varies based on a number of factors. But O’Neal adds that, "with Title IV and private sources of aid, it’s possible for an individual to be eligible for up to $24,000 per academic year."
The availability of financial aid to pursue an advanced degree is a real godsend for displaced workers, according to Clifford, "Being put out of work is painful. Being able to go back to school helps restore confidence, opens up networking opportunities, and equips adults with the new skills they need to get an even better job than the one they lost."
Just the fact that an individual shows initiative by pursuing an advanced degree makes them more employable. "If you are hiring," says Clifford, "who would be the better candidate: someone actively pursuing a degree or someone merely collecting unemployment?"
Helping working Americans obtain advanced degrees is critical, regardless of the state of the economy. Clifford explains, "For the United States to be robust and thriving, we need more workers who are equipped with 21st Century knowledge. Otherwise, our economy will continue to suffer as cutting edge jobs are outsourced to countries where the appropriate skills reside."
Analyst Jeffrey Silber, a senior analyst in BMO Capital Markets’ Equity Research Group, states, "any increase in grant and/or loan limits should be seen as a positive and as an indication that the new administration is not ignoring higher education as some may have feared."
Among the financial aid provisions in the bill are the following items:
* Increase the maximum Pell Grant to $5,350 for the 2009-2010 academic year, from the current maximum of $4,731.
* Provide more than $15.6 billion to cover a shortfall in Pell Grant funding due to an increase in the number of students applying for and qualifying for Pell Grant support.
* Increase Federal Work-Study program funding by $490 million to help more low- to moderate-income students work to pay a portion of their college expenses.
* Increase unsubsidized Stafford loan limits for undergraduate students by $2,000. The proposal would increase maximum annual loan limits for dependent undergraduates to between $7,500 and $9,500, depending on their year in college, and increase their aggregate loan limit to $39,000. Annual Stafford loan limits for independent undergraduates would grow to between $11,500 and $14,500, and their aggregate limit would increase to $65,500.
In addition, proposed tax provisions would replace the current Hope Tax Credit and tuition deduction with a maximum $2,500 credit for college expenses during the first four years of study. Under the proposal, families who owe no federal income tax still could qualify for reimbursement of up to $1,000 in eligible college expenses.
What benefit will this yield for faculty? According to Dr. Vance H. Fried, Brattain Professor of Entrepreneurship, Spears School of Business, Oklahoma State University, "For schools that are Pell Grant dependent, the stimulus incentives will most likely increase enrollment, which then leads to a higher workload for faculty, and maybe even a need for additional faculty. An economic downturn makes faculty jobs look more attractive because of perceived job security."
Fried continues, "Historically graduate school enrollment goes up as graduating seniors choose to pursue an advanced degree when job options aren’t that good. They view the opportunity cost of getting a MBA as lower when passing on a $35K job rather than a $55K job."
What’s the impact of helping people get a higher education? Cynthia Thompson of Cleveland, Ohio is the first of her family to go to college and get a degree. She will graduate in May 2009 with a degree in Criminal Justice from Chancellor University. The financial aid she received allowed this single mother to attend classes while still taking care of her family, including a developmentally disabled child at home.
While studying, she also volunteered at Cuyahoga Hills, an Ohio correctional facility, putting what she was learning into practice. She worked with youths aged 13-21 and, she says, "The superintendent really loves me!" Cynthia participated in Board hearings and mentored a couple of the young people. This is right in line with her ultimate goal.
"When I graduate," says Cynthia, "I want to work in the juvenile justice system and help young people get their lives straight. I like helping people and I believe I can help change people’s lives." She’d like to return to Cuyahoga Hills.
Cynthia has 19 grandkids. Those who are in school are always sharing their grades with Cynthia and asking her about her grades. "They are all proud of me,” she says, “and I’m proud of them, too." One granddaughter has started college. She’s encouraging her other grandkids to go to college, too. "I feel like I started something in our family,” says Cynthia, “and I want to keep it going."
