Tuesday, February 24, 2009
On Feb. 17, President Barack Obama signed into law the $787 billion federal stimulus plan — the “American Recovery and Reinvestment Act” — intended to help pull the nation out of the economic recession. Some of the act’s provisions, such as Pell grants and tax deductions for education, will directly benefit students. Other measures, such as federal assistance to states, will help indirectly. But the act ultimately proves inadequate when it comes to providing an immediate fiscal stimulus. None of the Act’s provisions for education will matter much as long as the economy remains mired in recession.
On paper, the stimulus provides these benefits to students:
• Increase the maximum amount of Pell grants by $500 for the more than 3,000 KU students who receive them.
• Provide students with the new “American Opportunity” tax credit for 2009 and 2010, which allows a tax deduction of up to $2,500 for tuition and related expenses.
• Provide $53.6 billion for state fiscal stabilization. Kansas’ share of this money will help soften the effects of the budget shortfall on funding for higher education.
• Increase funding for research and technology.
• Save or create 33,000 jobs in Kansas during the next three years, according to the President’s council of economic advisors.
Chancellor Robert Hemenway has said the plan “will help students pay for college and boost KU’s research efforts, both of which are critical to restoring economic prosperity.”
But the stimulus is imperfect because much of it won’t have a tangible impact until two, three or four years in the future. In the short term, it will do little to stop the current job loss and shrinking demand. Many provisions of this stimulus — especially tax cuts, which are likelier to be saved than spent — will not provide immediate fiscal stimulus.
Additionally, assistance to states should be larger because in tough times, most states, including Kansas, are forced to lay off state employees and slash funding for healthcare and education — including higher education.
Because of cuts in state funding, next year, KU students can expect larger class sizes and fewer elective courses offered.
More assistance from the federal government would have allowed states to decrease the size of these cuts, and the states would spend this money relatively quickly.
Ultimately, the largest benefit to students will come if and when this fiscal stimulus actually works.
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Comments
Editorial: Stimulus act won’t help students immediately
Oh, wait, yes I can. It was an attempt by Congress to get the public to swallow it easily.
Editorial: Stimulus act won’t help students immediately
I don't really understand how it can be called a stimulus when so much of it doesn't have an effect in the short term.
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