March 2009

The Stimulus Bill and Federal Budgets
The new year brought a new administration to Washington and also a new call for action to address the nation’s fiscal crisis. During the past three weeks, an economic stimulus bill was adopted, action was completed on the federal budget for the year that began last October 1, and a proposed Fiscal Year 2010 federal budget was announced by President Obama. Each of these actions will have a significant effect on higher education. Higher education issues of interest in the $787 billion stimulus bill aka the American Recovery and Reinvestment Act include:
  • Increases in Pell grants. The law increases the maximum annual award in two steps, to $5,350 in 2009; and to $5,550 in 2010. The funding has been made a “mandatory” appropriation, which means it will be difficult to reduce the award in future years.
  • Increased funding for the federal work study program.
  • The new $2,500 American Opportunity Tax Credit, which replaces and increases the Hope tax credit for postsecondary education. The new law expands eligible expenses beyond tuition and fees to include textbooks; increases income caps for eligibility; and is partially refundable.
A specific allocation for higher education capital needs was considered but later turned down.

The Fiscal Year 2009 Budget
On March 10, Congress sent a bill to the president that completed approval of the budget for fiscal year 2009, which began on October 1, 2008. Higher education matters include a six percent increase in funding for the National Science Foundation. President Obama signed the bill on March 11.

Funding for Canisius Science Programs
The 2009 budget bill includes a $285,000 appropriation to Canisius College for science programs equipment or renovation expenses. The appropriation was included in the bill with the support of Congressman Brian Higgins, Congresswoman Louise Slaughter, Senator Charles Schumer and Senator Kirsten Gillibrand. This is the first federal appropriation directed for the development of a new integrated science center in the college’s Science Hall.

The 2010 Federal Budget
President Obama presented a summary of his proposed 2010 Fiscal Year budget on February 26. Because a new administration is given additional time to prepare its first budget, the complete Obama budget will be released in April. The summary document proposes to increase Pell grant awards based on the Consumer Price Index plus one percent each year. Other higher education matters in the Obama spending plan include:
  • The simplification of the student aid application process (FAFSA)
  • A new five-year $2.5 billion Access and Completion Incentive Fund to support innovative state efforts to help low-income students succeed and complete their college education.
  • Ending the federally-subsidized private student loan program (FFEL) and exclusively using direct loans. The direct loans would be administered by private contractors.
Another section of the budget summary suggests a reduction in the maximum deduction that high-income individuals and families could use in making charitable contributions. The plan, which would affect families with annual income of more than $250,000, has been criticized as limiting tax savings for contributions, a move that could particularly impact colleges and universities. Following the release of the complete 2010 budget in April, congressional committees will hold hearings during the spring and summer. The 2010 fiscal year begins on October 1, 2009.

State News
The State Legislature continues to review Governor Paterson’s 2009-2010 budget, which includes some cuts in the Tuition Assistance Program (TAP) and a proposed new state lending program for students. The state’s new fiscal year begins on April 1.


The Canisius College Government Relations Newsletter is a service of the College Relations Division.  John J. Hurley, executive vice president and vice president for college relations; Debra S. Park, associate vice president for public relations; Kenneth C. Kruly, director of government relations (716-888-3755).