Jone Zieren has reviewed President Barack Obama’s 2010 budget proposal and his approved stimulus package in conjunction with the benefits toward higher education.

“Obama and the new administration seem to be focusing on what they can do to make college more affordable and accessible to more people,” said Zieren, director of financial aid.

She said the most significant aspect included the $3.55 trillion plan because it increases funds for the Pell Grant.

The program would be transformed into an entitlement program that would no longer have to go to Congress each year to solicit funding, she said.

“It would be more like Social Security or Medicare, money going into the program on a fixed budget automatically,” Zieren said.

In both pieces of legislation, the maximum Pell Grant would increase in the 2009-2010 school year by $500 to $5,350, after an already approved increase of $119.

For the 2010-2011 school year, the maximum Pell Grant would increase an additional $150. The award would then increase each subsequent year by the consumer price index plus 1 percent.

Eastern participates in the Pell Grant program, which awards funds that do not need to be returned to low or moderate-income students and their families. The goal of increased funds is to allow more students the ability to afford their college educations.

The proposed budget, but not the stimulus package, includes the removal of the Federal Family Education Loan Program, which gives students federal loans from private-sector lenders.

The loans given are the Stafford and Plus loans, which are guaranteed funding from the government.

Private colleges and colleges with high tuitions traditionally participate in this program.

“From what I understand, Obama wants to shut this loan program down and reallocate all the funding into increasing the Federal Stafford Direct Loan Program, which is directly administered from the government,” Zieren explained. “This would eliminate the cost of subsidies that the government is currently paying private lenders to distribute those loans.”

This loan change would not affect Eastern directly because the university already participates in the Stafford program. According to the FAFSA Web site, Eastern students were part of 1.5 million who received $14 billion in aid under the Stafford program. The Family program loaned $56 billion to about 6 million students.

However, Eastern would be indirectly affected by the Family program’s removal. The subsidies the government would save on could be used to increase the Pell Grant program as well as other federal grants and scholarships.

“Increasing grant dollars instead of loan amounts is the best for our students who are of low income and high need,” Zieren said.

In addition, Obama’s budget includes a comprehensive plan to revamp the Federal Perkins Loan Program, which was stricken in the stimulus’ compromise. The plan would reestablish the loan and its funds by increasing the money flow into the program, which has virtually slowed to a trickle in recent years.

The plan would increase the number of schools and students that participate in the loan program by redistributing the funds. Opposition, according to Inside Higher Ed, traditionally comes from private universities and high tuition universities that have received most of the funding in this loan.

“We currently participate in the Perkins program, but we haven’t really received new funds in years,” Zieren said. “Instead, we fund the program ourselves through the collections from students on their past Perkins loans.”

Both the proposed budget and the stimulus also include a proposal on the tax credit for family college spending.

There are two tax credits in application today-the Hope Scholarship and the American Opportunity Tax Credit. The proposal would phase out the Hope Scholarship credit and make the American Opportunity Tax Credit policy permanent to allow all families to claim a tax credit and receive benefits for reaching higher education.

Hope awards a maximum of $1,800 to families that earn enough to pay income tax, which can only be claimed for tuition and fees. America awards $2,500 maximum to those who pay income tax and $1,000 to those who cannot.

“I discussed this idea with Linda Coffey, the university’s expert on taxes and tax credits, and she explained that this would benefit the students of Eastern, who can come from lower income families,” Zieren said.

Finally, the budget calls for a new “access and completion incentive program,” funded at $2.5 billion over five years. The program will give federal grants to states and other educational groups to distribute to students in area colleges, and is aimed to increase the number of successful students in college and has a focus on low-income and minority students.

Zieren said this couples the $39.5 billion given to states for educational purposes in the stimulus package.

“I can only imagine that they mean to fund scholarships and grants like the MAP grant through this money,” she said.

However, Zieren cautioned that in light of these advancements to financial aid for students, students should be aware of increased competition for resources.

“Students need to file early to benefit from these plans,” she said. “Our priority filing date was March 1 and we already have 6646 students and parents receiving direct loans as of March 9.

“This is up from last year’s number of 6101 and students still have months to file. Students need to be aware that our campus based funds are going, and going quickly.”

Krystal Moya can be reached at 581-7942 or at ksmoya@eiu.edu.