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From Capitol to Campus

Public higher education stands to benefit substantially from President Obama’s stimulus package of $575 billion in spending and $212 billion in tax cuts. Education overall will receive around $130 billion in total funding, including tax credit bonds. This constitutes the biggest federal investment in education in history, more than the entire current U.S. Department of Education budget.

The stimulus measure, formally known as the American Recovery and Reinvestment Act, includes a $53.6 billion state fiscal stabilization fund. Of this, $39.5 billion is for public school districts and public institutions of higher education.

While the K-12 money is to be distributed through state funding formulas, governors have discretion in how to distribute the higher education money. In both cases, the money is to restore state budget cuts in 2009, 2010, and 2011.

Higher ed institutions can use the funds for general expenditures, to mitigate the need to raise tuition, and for facilities modernization, renovation and repair, but may not use the funds for capital projects or for research and development or direct funding of tuition and fees paid by students.

Under federal guidelines, states must restore support for both elementary and secondary education and public institutions of higher education. If a state doesn’t receive enough money to make both programs whole, it must use the money to restore spending levels proportionally. Affiliates should make sure that higher ed is getting its share.

The stimulus also includes significant money for student aid and research.

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