Obama Proposes Unemployed Get Grants for More Education, Training

On the same day a new report showed the pace of layoffs is slowing, President Obama outlined new aid to the jobless that allows unemployed workers to get more education and training while keeping their jobless benefits and directs the government to help pay for that training.

"Our unemployment insurance system should no longer be a safety net, but a steppingstone to a new future," Obama said Friday. "It should offer folks educational opportunities they wouldn't otherwise have" and give them skills they need to "get ahead when the economy comes back."

At the beginning of his speech, Obama noted the Labor Department report released Friday that showed the economy lost another 539,00 jobs in April, saying it will take months, maybe even years, to pull out of the recession.

"Although we have a long way to go before we can put this recession behind us, the gears of our economic engine are slowly beginning to turn," Obama said, noting that consumer spending and and home sales are stabilizing while construction spending is up for the first time in six months.

"Of course, that's no solace to those who have lost their jobs, or to the small business owners whose hearts break at letting long-time employees go," he said.

The $787 billion economic recovery package Obama signed into law in February gave states billions of dollars to provide 26 extra weeks of benefits for the unemployed who want job training. Twelve states have already expanded their benefits and 20 more states are expected to do so.

But the law kept in place a rule that forced people to give up their unemployment check if they stopped looking for work and decided to go back to school.

The administration noted Friday that when unemployed workers decide to return to school, they also don't qualify for federal grants because eligibility is based upon the previous year's income.

A senior administration official said that will be changed so that unemployed workers will be able to get Pell Grants for education and colleges will be able to increase financial aid packages without facing audits. Beginning in July, the maximum Pell Grant will be boosted by $500, to $5,350.

According to the White House, money provided in the stimulus bill and through the American Opportunity Tax Credit, which provides a new $2,500 tax credit for four years of college tuition, would be made permanent, providing $200 billion in scholarships and credits over the next decade.

The president's proposed 2010 budget also would "ensure the Pell Grant continues to grow steadily by making it an entitlement."

The president was making the announcement hours after the government reported that the economy shed 539,000 more jobs in April, driving the unemployment rate to 8.9 percent, the highest level since late 1983. It was the fewest jobs lost in six months. March's unemployment numbers were also revised upward from 663,000 to 699,000.

Obama has also directed Labor Secretary Hilda Solis and Education Secretary Arne Duncan to implement the changes. Both departments also have launched a new Web site, http://www.opportunity.gov, to help get the word out to the public.

States will be told to send letters to every unemployment recipient describing available training opportunities and financial support.

Obama is also going to ask Americans to commit to at least one year or more of higher education or career training so that the U.S. will have the highest proportion of college graduates in the world by 2020.

The Associated Press contributed to this report.