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In Obama's budget proposal, help for students, researchers

BY BETHANY BIRON AND MIKE MERAR
Daily Staff Reporters
Published February 4, 2010

University officials say they're optimistic about the benefits the University could see from President Barack Obama’s recently proposed budget, which includes plans to increase funding for Pell Grants and loan assistance, and could mean more money for University researchers.

The $3.8 trillion budget for the upcoming year, which Obama released on Monday, calls to increase Pell Grants to a maximum level of $5,710 up from $5,550 this year. In addition, the budget allots $66 billion for research not related to defense and development projects, a 5.9-percent increase from the 2010 budget.

Pamela Fowler, executive financial aid director at the University, said students would directly benefit from the proposed increase in Pell Grant funding.

“Any increase in Pell Grant funding will positively affect UM students,” Fowler wrote in an e-mail interview.

She added that though there are over 4,000 University students currently taking advantage of Pell Grants, it’s too early to determine how many would be affected by the proposed changes.

Cindy Bank, assistant director of the University’s Washington, D.C. Office, said the increase in money for Pell Grants, which provide funding for low-income students to attend college, will further aid students already reaping the benefits of the program.

“It will help all the students who have Pell Grants,” Bank said. “Throughout all three of our campuses, it will greatly help those students who have the most need.”

Bank added that she was pleased to see the president continue his support for making higher education affordable.

“It’s great that there is this commitment to increase the Pell Grants,” she said.

In addition to increasing funding for Pell Grants, Obama’s proposed budget would provide other benefits for students including loan assistance, United States Secretary of Education Arne Duncan said in a conference call with college reporters yesterday.

Duncan said Obama believes that stimulating the country’s education system will play a crucial role in helping to improve the struggling economy, which is why the budget includes the Pell Grant increase and funding for loan assistance.

“The president understands deeply that America’s economic security depends on improving education,” Duncan said. “In ten years, the jobs that employers will be looking to fill will require a college degree or at least a professional certification. We’re convinced we have to educate our way to a better economy."

Duncan said that a major part of Obama’s plan is in its ability to help nearly 1 million graduates to repay their loans. It also provides the opportunity to forgive their debt if they enter a job within the public service sector.

Under the Income Based Repayment Plan, which was passed on July 1 of last year, students entering a public service job will pay a maximum of 15 percent of their income towards their loans and the remaining debt will be forgiven after 10 years of work. Obama is currently working to reduce the percentage of income to 10 percent.

“We’re trying to remove all the financial impediments from bringing talent into the public sector and obviously we’re particularly focused in bringing the next generation of great teachers into our country’s classrooms,” Duncan said.

According to Duncan, the money needed for this project will not come from taxpayers and will not add to the national debt. The funds will instead be generated through ending the federal government's subsidizing of banks' student loans.

“This bill would basically fund our entire early childhood education agenda and our higher education agenda,” Duncan said. “And we can do all of this and support these subsides without going back to taxpayers for an additional dime and without raising the national debt at all, simply by stopping subsidizing banks and investing scarce resources into students.”

While the increase in Pell Grant funding and loan assistance will affect University students, Sarah Walter, director of federal relations for research at the University, said the increase in research spending will directly benefit the University itself.

“It’s going to give some great opportunities to purse competitive grants in a wide variety of areas that are high priority at the University like health care,” Walter said.

The University Research Corridor — a collaboration between the University of Michigan, Michigan State University, and Wayne State University — will also benefit from more funding, Walter added.

“The increases proposed by the administration will largely go to grant opportunities and also opportunities for fellowships to grad students which will create opportunities for collaboration between the three universities,” Walter said.

Congressman John Dingell (D-Mich.) wrote in an e-mail interview that he welcomed the increases in funding to Pell Grants and research.

“This increase in the maximum Pell award will clearly extend the buying power of this award, helping more than 317,000 students in the state to afford college,” Dingell wrote.

“This increase is critical as many colleges and universities in Michigan have had to increase tuition as a result of declining state aid,” he added.

Dingell also highlighted his support for the increase in research funding.

“It is my hope that the proposed increases in research funding by the Obama Administration will be of benefit to UM, in particular, to help increase the opportunities for UM faculty and graduate students to continue their work,” he wrote.

Dingell wrote that he was especially pleased with the President’s proposal for an emphasis on funding for science projects inside and outside the classroom.

However, he emphasized that the budget proposal still needed to be fully reviewed by members of Congress and passed in both the House and Senate before the plans set forth would actually be enacted.

“I must emphasize here that the Obama budget is just a proposal,” Dingell wrote. “As the House and Senate formulate the Congressional budget resolution, we’ll see what it looks like in comparison.”