FOR IMMEDIATE RELEASE: February 19, 2009
SCHUMER: FEDERAL ECONOMIC STIMULUS BILL WILL MORE THAN DOUBLE COLLEGE TUITION TAX CREDIT, WILL SAVE MIDDLE CLASS FAMILIES THOUSANDS OF DOLLARS
Nearly 360,000 Families in NYC Expected to Take Advantage of the Credit This Year - 60k in the Bronx, 110k in Brooklyn, 70k in Manhattan, 100k in Queens, 20k on SI
Schumer Fought to Include the Provision to Provide Middle-Class Families With a $2,500 Credit Per Student
Credit Is New Approach & Major Change - For Every $1 Spent on College Tuition, Middle Class Families Could Get $1 Off on Taxes, Up to $2,500 A Year
U.S. Senator Charles E. Schumer today announced that the federal economic stimulus package includes a provision to more than double the current college tuition tax break to $2,500 per student per year. The credit is a new approach and a major change to the current college tuition tax deduction that will allow many middle class families in
"A college education is a necessity that is being priced as a luxury. My bill is a new approach that would mean for every $1 dollar spent on college tuition, middle class families could get $1 off their taxes," said Schumer. "A college education shouldn't break the bank for families and students in
Schumer fought tirelessly to significantly increase the tax benefits provided by the current higher education tax incentives and pushed for the provision to be included as part of the economic recovery package.
The new middle class college tax credit replaces the current HOPE credit. For middle class families currently taking the HOPE credit—those making less than $60,000—the new credit would significantly increase their tax benefit. For example, a family making $60,000 this year would save $600 under current law, if they use the current tuition deduction, or $1,800, if they use the HOPE credit. Under the new Schumer proposal, they could see their entire federal tax liability disappear.
In 2007, more than 550,000
· 59,579 families in the
· 109,110 families in
· 69,918 families in
· 98,374 families in
· 20,388 families on
In the last decade, college tuition has skyrocketed across the country in light of rising costs. According to the College Board, private, four-year college tuition rose 6.3 percent last year while public four-year school tuition rose 6.6 percent.
Skyrocketing tuition results in more students graduating with massive amounts of debt. About 80 percent of students attending four-year colleges, public or private, in
With the recent tightening in the student loan credit market, more students of all income levels are being forced into borrowing from both federal and private lenders to finance college, and they are borrowing higher amounts than ever before. Others are forced to make tough decisions about whether or not higher education is feasible for them. According to the federal Advisory Committee on Student Financial Assistance, cost factors prevent 48 percent of college-qualified high school graduates from attending a four-year institution and 22 percent from attending any college at all.
To provide real relief for middle class families saddled with skyrocketing tuition costs and to help prevent further decreases in college enrollment, Schumer today announced that the economic recovery package signed into law by President Obama on Tuesday includes a new provision that will more than double current college tuition tax break, to $2,500 per student per year.
The tax credit would go into effect for tax year 2009 and would help millions of individuals. The provision is written in such a way so that even students with modest tuition – such as those attending community college – still receive a sizeable credit.
The credit is modeled after Senator Schumer's bill, S. 250, a bill to consolidate the higher education tax incentives into one expanded credit. Senator Schumer has introduced related bills in the 109th, 110th, and 111th Congresses, and the stimulus bill provided an opportunity to finally pass major portions of that bill into law
The new tax credit will benefit far more families that the existing incentives due to three factors: (1) the benefit can be used for more than one student in the household; (2) the new credit is partially refundable, meaning that the millions of New York families with incomes too low to owe federal income taxes can still claim a partial benefit; and (3) the income limits are slightly higher than in current law, reaching zero at $90,000 for singles (up from $80,000 previously) and $180,000 for married couples (up from $160,000 previously). In order to be eligible for the new credit, students must be enrolled at least half-time. In the 2008-2009 academic year, there were 826,000 full-time students enrolled in institutions of higher education in