President's Budget Outline Proposes Making the Schumer-Doggett College Tuition Tax Credit Permanent

Press Release

PRESIDENT'S BUDGET OUTLINE PROPOSES MAKING THE SCHUMER-DOGGETT COLLEGE TUITION TAX CREDIT PERMANENT

Temporary College Tuition Tax Credit for Middle Class Families with Children in College was Included in the Economic Recovery Package

President's Budget Proposal Would Make $2,500 Tax Credit Permanent; Extending College Tuition Affordability for Years to Come

Schumer and Doggett Spearheaded Efforts in Congress to Include Tuition Tax Credit Measure in Stimulus

WASHINGTON, DC--In a major step, U.S. Senator Charles E. Schumer (D-NY) and U.S. Congressman Lloyd Doggett (D-TX) announced today that President Obama has proposed making their college tuition tax credit permanent in his budget unveiled this morning. The tax credit, which Schumer has championed in the Senate for four years and Doggett sponsored in the House, offers middle-class families a $2,500 tax credit for each child enrolled in college each year. This credit, as a temporary measure, was included in the American Recovery and Reinvestment Act signed in to law by the President last week. The President has now proposed making that tax credit permanent, making college more affordable for families over the longer term.

"Making this tax credit permanent would save middle-class families thousands of dollars, not just this year and next, but every year they have a child in college," Schumer said. "A college education is a necessity for America's children and it is being priced as a luxury. Making this credit permanent will offer families real relief for years to come and ensure that every family can afford to send their kids to college."

"We promote economic recovery by promoting educational opportunity," said Rep. Doggett, a senior member of the House Ways and Means Committee and House Budget Committee. "We cannot put our economy back on track unless we keep our youth on track to get all the education for which they are willing to work. Making the American Opportunity Tax Credit permanent creates a lasting foundation for educational achievement, and represents one of the best ways to help America become more productive and competitive globally."

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 feasible. 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.

Earlier this month, Schumer and Doggett's proposal to combine the HOPE credit and the college tuition deduction into a $2,500 credit passed both Houses of Congress and was signed in to law by the President as part of the American Recovery and Reinvestment Act. The tax credit goes into effect for tax year 2009 and helps millions of families afford college. However, the provision expires after two years. In his budget released this morning, President Obama proposes making the tax credit permanent.

The Schumer-Doggett provision was written in such a way so that even students with modest tuition - such as those attending community college - still receive a sizeable credit. The full tax credit can be claimed for incomes up to $80,000 for single and $160,000 for married couples. A partial credit can be claimed for incomes up to $90,000 for single and $180,000 for married couples. Additionally, the benefit can be used for more than one student in the household. It is partially refundable, meaning that the millions of families with incomes too low to owe federal income taxes can still claim a partial benefit. In order to be eligible for the new credit, students must be enrolled at least part-time.

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