Senator Charles E. Schumer

FOR IMMEDIATE RELEASE: October 25, 2006

With College Tuition Up 35 Percent In Upstate NY, Schumer Fights To Restore Critical Tax Break That Saves Middles Class Families Thousands Of Dollars Every School Year

Schumer Authored College Tuition Tax Deduction, Which Allows More than 100,000 Upstate NY Families Every Year To Deduct Thousands of Dollars in College Costs, Expired This Year

New Schumer Study Finds College Tuition in NY has Gone Up More than 35% Over Last 5 Years

New Schumer Study Shows Tuition Up In Every Region of the State; Capital Region Colleges are up 37%; Central N

Today, U.S. Senator Charles E. Schumer revealed that hundreds of thousands of upstate New York middle class families could lose a critical tax break that helps pay for the skyrocketing cost of college tuition if Congress doesn’t act by the end of the year. The Schumer-authored “College Tuition Tax Deduction” allowed more than 102,000 upstate New York middle class families to deduct up to $4,000 of their kids' tuition from their taxes. Schumer said this tax deduction is needed now more than ever as he will release a new report showing that, since the 2000-2001 school year, the price of going to college in upstate New York has jumped more than 35 percent. In response, Schumer called on Majority Leader Senator Bill Frist to bring legislation to the Senate floor to extend the tax break.

“A college education has become a necessity that's priced as a luxury - and it's breaking the bank for students and their families throughout the nation,” Schumer said. “To hard-working New York parents, skyrocketing tuition costs mean debt and second mortgages. They mean lost family vacations and hard choices about how many children can be sent to school. The college tuition tax deduction makes these choices a little easier by saving families thousands of dollars every year.”

The college tuition tax deduction, passed into law in 2001 and based on bi-partisan legislation written by Schumer, originally allowed middle-income families to deduct $3,000 from their tax return. The deduction was raised to $4,000 a year in 2004. Last year, single filers who made up to $65,000 a year and married couples with incomes up to $130,000 qualified for the tuition deduction. There was also a smaller, $2,000 deduction for those who earned more.

According to the Internal Revenue Service, an estimated 102,737 upstate New York middle class families took advantage of the tax deduction during the 2003 tax year, the last year for which data is available. In 2003, 3.6 million families took advantage of the deduction, saving them about $4.5 billion

However, in May, language extending the tax break for another three years was eliminated from the tax reconciliation bill in favor of restoring $5 billion worth of tax breaks of the major oil companies.

Schumer today said that the critical tax break that saves middle class families thousands of dollars every year is needed now more than ever because college tuition costs are continuing to skyrocket. In his report, Schumer revealed that the average price of going to college in upstate New York is up more than 35 percent since the 2000-2001 school year. Five years ago, the average price of tuition, not including room, board, and books, was $9,151. Now, it is up to $12,334. This includes tuition at both public and private colleges and in-state and out-of-state tuition. Below is how the numbers break out across the state:

• 12,576 families in the Capital Region took advantage of the college tuition tax deduction in 2003. Over the past five years, the average price of going to college in Capital Region increased by 37 percent, rising from $9,037 in 2001 to $12,343 in 2006.

• 11,563 families in Central New York took advantage of the college tuition tax deduction in 2003. Over the past five years, the average price of going to college in Central New York increased by 47 percent, rising from $10,808 in 2001 to $15,927 in 2006.

• 15,542 families in the Rochester-Finger Lakes region took advantage of the college tuition tax deduction in 2003. Over the past five years, the average price of going to college in the Rochester-Finger Lakes region increased by 33 percent, rising from $11,603 in 2001 to $15,382 in 2006.

• 29,381 families in the Hudson Valley took advantage of the college tuition tax deduction in 2003. Over the past five years, the average price of going to college in the Hudson Valley increased by 30 percent, rising from $8,606 in 2001 to $11,222 in 2006.

• 6,937 families in the North Country took advantage of the college tuition tax deduction in 2003. Over the past five years, the average price of going to college in the North Country increased by 36 percent, rising from $6,238 in 2001 to $8,470 in 2006.

• 8,031 families in the Southern Tier took advantage of the college tuition tax deduction in 2003. Over the past five years, the average price of going to college in the Southern Tier increased by 24 percent, rising from $9,168 in 2001 to $11,411 in 2006.

• 18,707 families in Western New York took advantage of the college tuition tax deduction in 2003. Over the past five years, the average price of going to college in Western New York increased by 35 percent, rising from $8,596 in 2001 to $11,584 in 2006.

Though Congress is currently in recess, Schumer today sent a personal letter to Majority Leader Bill Frist (R-TN) demanding that he immediately bring to the floor legislation extending the college tuition tax deduction and other middle class tax breaks that are set to expire this year. In his letter, Schumer said that “the time for political games is over. This tax break helps middle class families in New York and across the country deal with the increasingly heavy burden of paying to college, and its expiration puts into jeopardy the future of young people everywhere.”

Schumer is also the author of the bi-partisan “Make College Affordable Act” (S. 759) which would increase the maximum amount of tuition costs that can be deducted to $12,000 each year, and make the deduction permanent.

In addition, the bill would help college graduates pay off their loans by offering a tax deduction of up to $1,500 for interest paid on student loans over the first five years of repayment. The full deduction would apply to single filers with incomes up to $50,000 and joint filers with incomes up to $100,000. The legislation would still allow parents to choose Hope Scholarships instead of the tax deduction, based on which works best for them.

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