How the Obama Stimulus Plan Will Impact Schools and Education

posted by Mark on February 23rd, 2009

The American Recovery and Reinvestment Act (ARRA) of 2009, signed into law on February 17, aims to lend a helping hand to not only employment, health care and taxes, but significantly for the struggling state school systems: It more than doubles the education funding of the previous presidential administration.

Of the act’s $787 billion cost ($288 billion in tax cuts and $499 billion in spending), up to $141.6 billion will go to education, according to the Department of Education. Granted, most estimates are closer to $120 billion, but that’s still a sizable sum compared to previous allotments for education. The direct funding of education (as opposed to tax credits, tuition grants, renovations and administration) alone amounts to over $77 billion, a 159% increase over 2008 allocations for the Department of Education. The breakdown of the education budget is laid out after the jump…State Fiscal Stabilization Fund: $53.6 Billion

This amount will be given directly to states and school districts in order to prevent significant state education cuts, stemming the tide of teacher layoffs and cuts in various education services.

Student Financial Assistance: $15.84 Billion

These funds, available through September 30, 2011, include $15.64 billion for increasing the maximum amount available for Pell Grants (need-based grants to low-income undergraduate college students) by over $500 per student. The cap will be $5,350 in 2009 and $5,550 in 2010. Also included is $200 million for work-study programs.

American Opportunity Tax Credit: $13.9 Billion

This is a maximum $2,500-per-person tax credit for college students in 2009 and 2010, making college more affordable to those in their first four years of post-secondary education.

Education for the Disadvantaged: $13 Billion

This includes $10 billion for grants to local education agencies and $3 billion for school improvement grants, “to ensure that all children have a fair, equal, and significant opportunity to obtain a high-quality education and reach, at a minimum, proficiency on challenging state academic achievement standards and state academic assessments.” This money essentially goes to strengthening enforcement of the No Child Left Behind Act.

Special Education: $12.2 Billion

This amount is to aid in enforcement of the Individuals with Disabilities Education Act (IDEA), which governs how states and public agencies provide special education and related services to children with disabilities.

State Incentive Grants and Innovation Fund Grants: $5 Billion

This money will be distributed on a competitive basis to states who show the most progress in four areas: 1) teacher quality, especially in poorer and high-minority schools; 2) data systems to track the progress of student learning; 3)  academic standards and testing ability; and 4) support of struggling schools.

Head Start: $2.1 Billion

This amount includes $1 billion for Head Start and $1.1 billion for Early Head Start, which provide education, health, nutrition and parent involvement services to low-income children and their families.

Child Care Development Block Grant: $2 Billion

This funding is to support quality child care for struggling families through the Child Care and Development Fund (CCDF).

School Improvement Programs: $720 Million

This includes $650 million for technology grants through the Enhancing Education Through Technology (EETT) program and $70 million for grants to aid homeless students. The funding of EETT, which seeks to use technology to improve elementary and secondary student achievement, should improve online access and the technological capabilities of students in those grades, better preparing them for future employment.

Rehabilitation Services and Disability Research: $680 Million

This money provides grants through the Rehabilitation Services Administration (RSA) to states to “empower individuals with disabilities to maximize employment, economic self sufficiency, independence and inclusion and integration into society” by providing job rehabilitation programs, plus independent living centers and services for older blind individuals.

Institute of Education Sciences: $250 Million

This money is for competitive grants to state educational agencies to enable them to construct statewide data systems for tracking individual student progress.

Innovation and Improvement: $200 Million

These funds go toward grants to any agencies or institutions of higher education “to support nationally significant programs to improve the quality of elementary and secondary education at the state and local levels and help all children meet challenging state academic content and student academic achievement standards.”

Impact Aid: $100 Million

This goes towards the Impact Aid Program, which provides funding and technical support to “local educational agencies that are financially burdened by federal activities.”

Higher Education: $100 Million

This amount goes toward increasing academic achievement by improving teacher and principal quality, as mandated by the Higher Education Act.

Student Aid Administration: $60 Million

This money goes to aid in the administration of delivery of student financial aid, including loans, grants and work-study programs.

Office of the Inspector General: $14 million

These funds, available through September 30, 2012, provide for salaries and expenses necessary for oversight and audit of programs, grants and projects funded by the ARRA.

While not necessarily historic in scope, the ARRA is a big step forward for the state of American education, providing at least some level of stability to eroding state budgets, minimizing faculty layoffs and improving accessibility to students struggling in the economic downturn.

For students interested in taking advantage of the benefits provided by the stimulus, popular education options include business schools, medical billing, medical assistant training, criminal justice, and health care.

Related content:

• Obama’s Plan to Boost Community Colleges and Free Online Education
• 20+ Must-Read Education Technology Blogs
• Students Flock to 2-Year Schools During Recession

Tags: economy, education, government, Personal Finance, taxes

This entry was posted on Monday, February 23rd, 2009 at 5:22 pm and is filed under Culture, News, Personal Finance, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.