Archived Information

Letter from the U.S. Department of Education
and Department of Health and Human Services to
Presidents of Postsecondary Education Institutions

October 22, 1997

Dear Colleague:

We are writing to provide you with information about student financial aid that is available to current and prospective child care workers and, in particular, Pell Grants, which are available to lower income individuals. The President proposed, and the Congress has enacted, numerous changes to make higher education more affordable and to provide lifetime learning for all Americans, including child care workers. Every year millions of students apply for and receive some sort of financial aid. The federal government makes available nearly $43 billion annually in student aid to help students pay for tuition, fees, books, and living expenses.

Many child care workers may be eligible to receive a Pell Grant. The Pell Grant Program is the largest grant program in the U.S. Department of Education for students enrolled in postsecondary education. The amount of your Pell Grant award will depend on your family income. A Pell Grant, unlike a loan, does not have to be repaid and can be used to help pay for eligible programs that include courses in child development or early childhood education offered by eligible institutions.

In addition, the Department of Education offers a variety of other student financial aid programs, including work-study (which lets you work and earn money to help pay for school) and loans (borrowed money you must repay with interest). In the Direct Loan Program, a variety of repayment options are available as a result of President Clinton's higher education initiatives. One of them is the Income Contingent Repayment Plan, where your monthly payment is based on your yearly income and your loan amount. As your income rises or falls, so do your payments.

Also, in August 1997, new tax benefits (including the HOPE Scholarship tax credit and Lifetime Learning tax credit) were signed into law that help make the first two years of college universally available and will give many more working Americans the financial means to go back to school if they want to choose a new career or upgrade their skills. These tax cuts are an important piece of the President's higher education initiatives. When fully phased in, the President's higher education tax credit will benefit 12.9 million students, 5.8 million claiming the HOPE Scholarship tax credit and 7.1 million claiming Lifetime Learning credits each year. The tax credits will be worth $9.1 billion, $5.2 billion for the HOPE Scholarship tax credit and $3.9 billion for Lifetime Learning.

To assist child care providers who want to improve their skills, we are enclosing detailed information about Pell Grants and other student financial aid assistance. Please read this information and, if you have additional questions, call our toll-free help line (1-800-4FED-AID).

Donna E. Shalala
Secretary of Health and Human Services

Richard W. Riley
Secretary of Education



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