FOR IMMEDIATE RELEASE: February 14, 2011
SCHUMER: OBAMA BUDGET WOULD MAKE SCHUMER-AUTHORED COLLEGE TUITION TAX CREDIT PERMANENT; MAJOR VICTORY FOR MIDDLE-CLASS FAMILIES INVESTING IN FUTURE
Obama’s Budget Would Make Schumer-Authored Tax Credit Permanent; Stands to Help Stretch Middle-Class Pay Checks and Make College Education More Affordable
For Every $1 Spent On College Tuition, Middle-Class Families Can Get $1 Off On Their Taxes, Up To $2,500; Permanent Tax Credit Demonstrates Investment in Our Future
Schumer: Obama Makes Good on Investing in Future, While Credit Provides Middle-Class Families Millions in Savings
Today, U.S. Senator Charles E. Schumer announced that the Obama Administration’s Fiscal Year 2012 (FY12) budget calls for the Schumer-authored American Opportunity Tax Credit (AOTC) to be made permanent. This $2,500 college tuition tax credit included in the American Reinvestment and Recovery Act (ARRA), that passed in 2009, provided major aid to middle-class families trying to stretch their pay checks during tough economic times. The budget also proposes that both the $2,500 credit amount and the income thresholds be adjusted for inflation starting in 2013. Once permanent, the college tuition tax credit will continue to save New York families millions for years to come, and demonstrates a major investment in our nation’s future.
“President Obama’s decision to make the college tuition tax credit permanent is great news for middle-class families in New York and across the county,” said Schumer. “As after-shocks from the economic downturn continue to take their toll and tuition costs skyrocket, these savings are needed now more than ever. This tax credit provides real relief for middle-class families by taking one dollar off their taxes for every dollar spent on college tuition – up to $2,500. This tax credit means real savings for our middle-class families for years to come.”
The Schumer-authored college tuition tax credit was originally signed into law as part of the American Recovery and Reinvestment Act of 2009, but was due to expire at the of 2010. However, Schumer was able to include a 2-year extension as part of the tax package that passed the Senate last year. The legislation transformed the existing HOPE tuition credit into the $2,500 American Opportunity Tax Credit. The new Schumer credit represents an overall benefit that is at least two-and-a-half times greater than the previous tuition benefits. For families with children in college but who do not have enough income tax liability to qualify for the full credit, the law provides a refund worth up to 40% of the credit for each student. President Obama’s decision to make this credit permanent extends this critical aid for years to come.
Since 2009, the Schumer-authored college tuition tax credit has saved families thousands of dollars each year. President Obama’s call to make this permanent will ensure these savings for middle class families for years to come. Below is a county by county breakdown of the tax savings:
· Families in the Capital Region would save up to $150,970,000 annually.
· Families in Central New York would save up to $161,761,000 annually.
· Families in the Hudson Valley would save up to $178,015,000 annually.
· Families in the North Country would save up to $67,351,000 annually.
· Families in the Rochester Finger Lakes Region would save up to $144,652,000 annually.
· Families in the Southern Tier would save up to $126,512,000 annually.
· Families in Western New York would save up to $156,534,200 annually.
In the last decade, college tuition has skyrocketed across the country in light of rising costs. 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 in higher amounts than ever before. Others are forced to make tough decisions about whether or not higher education is affordable. 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.
President Obama’s Fiscal Year 2012 budget calls to make Schumer-authored American Opportunity Tax Credit permanent. The college tuition tax credit will save families millions in New York and across the country for years to come, and demonstrates a major investment in our nation’s future.