Gerri Willis Commentary:
Top Tips by Gerri Willis Column archive

College tuition help on the horizon

If Congress passes Obama's stimulus bill, paying for a college education may be a bit easier.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Gerri Willis, CNN

For more information on managing your largest investment, check out Gerri Willis' 'Home Rich,' now in bookstores.
CDs & Money Market
MMA 0.69%
$10K MMA 0.42%
6 month CD 0.94%
1 yr CD 1.49%
5 yr CD 1.93%

Find personalized rates:

Rates provided by

NEW YORK ( -- There could be help on the horizon for families worried about paying for college tuition if Congress passes the American Recovery and Reinvestment Act of 2009. Here is what this bill may do for college students.

1. Tax credits

The Hope Scholarship tax credit would be temporarily increased.

Just to clarify, a tax credit lowers your tax bill dollar for dollar while a deduction shaves money off your taxable income. This bill could raise the amount of tax credits from $1,800 to $2,500. And you can use these credits not only toward tuition, but also for course materials - like textbooks. Income phase outs are also higher, so more people will qualify.

To qualify for a HOPE scholarship, students must be in the first or second year of college.

2. Pell Grant increase

The Pell Grant is a need-based grant that goes to low-income undergraduate students. 98% of Pell Grants go to students whose family income is under $50,000 according to Mark Kantrowitz of

This bill would increase the amount a student would qualify for by up to $500. In total, the student would be eligible for a maximum grant of $5,350. It's estimated this will help 800,000 additional students. Overall, an estimated 7 million students will receive Pell Grants in 2009-2010.

3. Stafford loan limits increase

This bill would increase unsubsidized Stafford loan limits. The unsubsidized Stafford is not a needs-based loan.

For dependent freshmen, the new limit is $7,500. For sophomores it's $8,500 and for juniors and seniors, it's now $9,500. These changes would be effective for loans on or after January 2009.

The limit increase is good news for students who now may not have to rely on the private student loan market to supplement their loans. Federal loans are a lot cheaper than private options.

4. Get the timeline

These student aid provisions are part of the American Recovery and Reinvestment Act of 2009 proposed by President Obama. Experts say that it's likely there will be pressure on Congress to act on this sooner rather than later. And considering Congress is still in its "honeymoon" phase, it could be passed within a few weeks. Of course, we will continue to bring you the latest.

Have you found a way to pay for your child's college education without taking on too much debt? Did you choose a university based on its lower cost or loan programs, research scholarships, or just save up and pay in full? We want to hear from you. Send your stories to and you could be featured in an upcoming story. To top of page

Gerri's Mailbox: Got questions about your money? We want to hear them! Send an e-mail,we'll answer questions on CNN, Headline News and
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.