Schumer, Snowe: 2008 Bush Budget Eliminates Key College Tuition Tax Deduction

Schumer, Snowe: 2008 Bush Budget Eliminates Key College Tuition Tax Deduction

Senators Charles Schumer and Olympia Snowe expressed alarm that the President's proposed 2008 budget failed to include the college tuition tax deduction, which currently expires at the end of this year. In a letter to Education Secretary Margaret Spellings, the Senators asked for an explanation for this startling omission.

"Millions of families across the country rely on the tuition deduction to help put their kids through college. It has a real impact on their ability to afford tuition for higher education. President Bush's decision not to extend the deduction in his budget is yet another example of his misplaced priorities and his failure to protect hard-working families who are trying to help their kids get ahead," Schumer said.

"Access to higher education unlocks the promise of opportunity and career success for millions of American children every year," Snowe said. "Denying qualified students from pursuing that opportunity because they are unable to afford the price of an education is unfair and ultimately detrimental to the future of our economy and our country. Since it was established in 2001, the college tuition tax deduction has given millions of American families the help they needed to open doors that would have otherwise been closed to their children. The President's decision not to continue this program in his proposed budget for FY 2008 is wrong headed and must be corrected by the Congress."

In 2004, 4.6 million Americans took advantage of the college tuition deduction, including 326,000 in New York and 18,000 in Maine. Current legislation extends the deduction through the end of 2007, but Bush's budget failed to include a provision to extend it. The president's budget included $2 trillion in new tax cuts, while extending the college tuition credit would have cost less than $2 billion.

The deduction was created in 2001 and initially offered middle-income families a $3,000 deduction their tax return. The deduction for single filers who make up to $65,000 a year and joint-filers with incomes up to $130,000 was raised to $4,000 in 2004, where it remains. There is also a smaller, $2,000 deduction for single filers who make between $65,000 and $80,000, and joint-filers with incomes from $130,000 to $160,000. Schumer grilled Treasury Secretary Paulson at a Finance Committee hearing on the budget, but he was unable to provide a rationale behind the cut and suggested Schumer ask Secretary Spellings why the budget omitted the deduction. Schumer and Snowe are now seeking explanation from Secretary Spellings.

http://schumer.senate.gov/SchumerWebsite/pressroom/record.cfm?id=269600