Facilities Fund Struck From Stimulus Compromise (Update)

Separate pool of money for college renovations seemingly dropped in final version, but state education aid would grow to $54 billion and some could be used for buildings.
February 12, 2009

(Note: This article is updated throughout with newly available information, which appears in bold type. A summary of the stimulus legislation, prepared by Speaker of the House Nancy Pelosi's office, is available here.)

A warning: By late last night, even many Democratic members of Congress still had not seen details of the compromise economic stimulus announced by Senate leaders Wednesday afternoon, so you'd be well-advised to take the following with a major grain of salt.

But based on news reports and the best information available from Congressional aides and higher education lobbyists, including a summary released by House Democrats, it appears that the compromise legislation crafted by Senate Democrats and White House officials would not create a separate pot of money to help colleges and schools modernize their facilities, but would provide $53.6 billion for states to use to plug holes in their education budgets -- and allow them to use some of that money for educational facilities projects.

It was not clear as of late Wednesday night whether the money would be for college buildings or just elementary and secondary schools.

Various accounts also indicated that the compromise legislation, which was estimated to cost $790 billion (less than both the Senate and House versions) would also increase spending on the National Institutes of Health by $10 billion over two years and on Pell Grants by between $13.9 billion and $15.4 billion (the exact figure was not available). The House Democrats' summary said the Pell funds would increase the maximum grant by $500, to $5,350 in 2009 and $5,550 in 2010. The increase for NIH was essential to maintaining the support of Sen. Arlen Specter of Pennsylvania, one of the three Republican moderates whose backing the White House and Senate Democrats needed to cultivate to ensure passing of the stimulus legislation.

Details on the many other aspects of the stimulus package that might affect higher education were still sketchy last night, but college lobbyists were told that the legislation did not include an increase (called for in the House bill) in federal limits on unsubsidized student loans, which private and for-profit colleges strongly support. The compromise legislation reportedly also did not contain a proposed increase in spending on Perkins Loans (which the Senate measure included), but would provide $200 million in additional funds for the work study program. The legislation also sustains the $2,500, partially refundable tax credit for higher education expenses that was contained in both the original House and Senate bills.

The summary released by House Democrats Thursday morning provides some additional details about the state fiscal stabilization fund. It says that $40.6 billion would be distributed to states to prevent cutbacks and, for the first time, for "school modernization," a change designed to satisfy House Democrats angry about the elimination of the separate pool of money they proposed distributing for that purpose. States would also receive another $5 billion in "bonus grants" for meeting key performance measures in education, and $8 billion for "other high priority needs such as public safety," "which may include education."

The summary released by House Democrats suggests a bonanza for scientific research. It says the compromise version of the stimulus legislation would provide:

  • $8.5 billion for NIH research, and $1.5 billion for the biomedical research agency "to renovate university research facilities and help them compete for biomedical research grants." .
  • $3 billion for the National Science Foundation, for basic research in fundamental science and engineering.
  • $1.6 billion for the Department of Energy’s Office of Science for "areas as climate science, biofuels, high-energy physics, nuclear physics and fusion energy sciences."
  • $400 million for the Advanced Research Project Agency-Energy (ARPA-E).
  • $580 million for the National Institute of Standards and Technology, including the Technology Innovation Program and the Manufacturing Extension Partnership. The summary does not make clear whether the legislation includes $300 million for higher education facilities called for in the House bill.
  • $400 million for the National Aeronautics and Space Administration for climate change research.
  • $1.1 billion for research on the "comparative effectiveness" of different kinds of health care.

Despite the apparent disappearance of the higher education modernization fund and the fact that the state "stabilization" money, at $54 billion, would be far less than the $79 billion called for in the House version of the stimulus legislation, the increases in student aid, research spending and state education aid alone that are seemingly in the final bill would result in a massive, arguably unprecedented infusion of money into colleges and universities desperate for relief from the worldwide economic downturn.

More information about the stimulus legislation can be found here as details become available.


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