Coalition Calls for Refocusing Tuition Tax Breaks on Neediest Families

November 22, 2013 | The Chronicle of Higher Education |  Link to article

A coalition of groups is calling on Congress to streamline the higher-education tax benefits and to refocus them on low- and moderate-income students.

In a report and a letter to Congress, the coalition, known as the Consortium for Higher Education Tax Reform, calls for eliminating three of the federal tax benefits for education-the Tuition and Fees Deduction, the Lifetime Learning Credit, and the Coverdell Education Savings Account-while permanently extending the American Opportunity Tax Credit and making it fully refundable, so that even people who don't owe taxes could receive the benefit.

The coalition, which includes the Center for Law and Social Policy, Young Invincibles, the New America Foundation, and the Education Trust, also wants to allow families to receive the American Opportunity Tax Credit when tuition is due, rather than at tax season, and to end tax breaks to colleges that fail to meet minimum access and completion standards.

Taken together, the proposed changes would significantly increase aid to low-income families while preserving higher-education tax benefits for 80 percent of families, according to the coalition.

The consortium is financed by the Bill & Melinda Gates Foundation as part of Round 2 of its Reimagining Aid Design and Delivery Initiative.

 

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