Last week, President Obama signed into law the American Recovery and Reinvestment Act of 2009. This Act authorizes up to $787 billion in new federal spending and tax cuts with the intent of stimulating down trodden U.S. economy. At a cursory level, it is difficult for me to fathom how this massive infusion of spending can be regulated to insure fiscal accountability. I have three observations:
1. Let’s be honest, greed and avarice were significant contributors to our current economic crisis. Unless there are efforts to change the underlying human behavior that got us into this mess to start with, adding another trillion dollars will not even help. What about the principles of servant leadership and doing well by doing good? Will they make it into the vocabulary of corporate America?
2. Do the American people actually think that the government can monitor and manage the distribution of these funds? If history tells us anything, the answer to this question is a resounding “no.”
3. I understand that the collapse of the housing market began this recessional domino effect. Why then is the government looking to help people who are in the foreclosure process? It gets back to my first point. There was corruption in the subprime market and borrowers borrowed money they had no right in borrowing. Now I certainly understand that there are those who were taken advantage of and, if there is a way to truly determine who, then those individuals should be helped. But why not “stimulate” those millions of Americans who have continued to pay their mortgages and other debt obligations.
In my opinion, one of the true stimulus provisions within this Act is the significant investment in U.S. higher education. Educating or reeducating our workforce will, in the long run, stimulate portions of the economy and allow us to remain globally competitive. If you were contemplating returning to school, now might be the best time to do so. I would like to draw your attention to several important provisions within the Act that, if you are planning on returning to school, could impact you in particular:
· Provides increases in Pell Grants for undergraduate students such that the maximum Pell Grant available in the 2009-2010 award year will be $5,350.
· Changes the Hope Tax Credit to establish a newly-expanded “American Opportunity Tax Credit” which may allow eligible students to receive a maximum $2,500 tax credit for each of their first four years of post-secondary education (for undergraduate programs). The tax credit is now refundable, meaning that students may be eligible to receive up to 40% of the credit, even if they do not pay income taxes.
· Expands the definition of qualified higher education expenses under Sec. 529 college savings plans such that an individual currently enrolled at an institution of higher education during 2009 or 2010 can use such savings plan funds for the purposes of paying for certain computer and technology expenses.
· Provides an additional $200 million for the Federal Work Study Program, available to both undergraduate and graduate students.
These provisions apply to the traditional and adult learner alike. For the adult learner, combining the benefits of online learning from accredited institutions with some of the provisions of this recent legislation could be a win-win for the learner, for post-secondary online schools, and eventually the country.
