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Wealthiest Families Receive Largest Share of Tax-Based Student Aid

Dec 10, 2013

By Julie Strawn

This is the second piece in a three-part series highlighting charts from the recent publication, Higher Education Tax Reform: A Shared Agenda for Increasing College Affordability, Access, and Success, written by the Consortium for Higher Education Tax Reform for the Bill & Melinda Gates initiative, Reimagining Aid Design and Delivery. The Consortium is a partnership of four organizations concerned with college affordability, access, and completion for low- and modest-income individuals: the Center for Postsecondary and Economic Success at CLASP, Young Invincibles, the New America Foundation's Education Policy Program, and The Education Trust.

In 2013, the largest share (over 30 percent) of the federal government's $34 billion investment in tax-based student aid will go to the wealthiest fifth of American households.

This poor targeting blunts the impact of tax-based aid on socioeconomic mobility and college affordability and access, because higher-income individuals are already very likely to attend college. One study found, for example, that for each student motivated to attend college (or enroll in more courses) by federal tax-based aid, as many as 13 other students receive tax subsidies without that aid influencing their enrollment decisions.

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