Schumer: Developing an Easy-to-Use Guide for Students & Families is Small Cost for Potentially Huge Benefit of Decreasing Student Loans & Making College More Affordable
Washington, DC - September 5, 2014 - Today, U.S. Senator Charles E. Schumer, along with eleven of his Senate colleagues, called on the Administration to develop a simple, comprehensive guide of post-secondary education tax benefits for families and students. Schumer explained that, according to a 2012 report produced by the Government Accountability Office, one in six tax filers failed to take advantage of the maximum higher education tax benefits available to them. As a result, Schumer is urging the White House to create a guide that would help educate New York students and families of the tax benefits available to them, including tax credits, tax-free savings plans, and tax deductions. Schumer said this guide would help make higher education more accessible and affordable and help decrease student loan debt for students over the long term.
“All Americans deserve access to a college education, but with increasing tuition rates, the skyrocketing loan debt students face after college, and the exorbitant interest rates on top of that, college students, graduates and their families are struggling to make ends meet,” said Schumer. “Luckily, there are many tax benefits available that can help make college more affordable, but hundreds of thousands of New Yorkers do not take advantage of them. That is why I am calling on the administration to create and develop a simple, but comprehensive guide to raise awareness about all of the higher-education tax benefits available to New Yorkers. Not only will these kinds of tax credits, deductions, and more help families in the short term, but utilizing these benefits could help shrink student overall loan debt in the long term.”
Schumer explained that this kind of information guide could help the estimated one million students currently enrolled in New York State colleges and universities. According to the New York State Department of Education’s survey of colleges and universities in New York in April 2009, there were 959,683 students attending 2-year and 4-year colleges in the State of New York. According to the New York State Department of Education’s 2013 survey, there were 1,033,709 students attending 2-year and 4-year colleges and universities in the state. Schumer explained that, as post-secondary degrees become more necessary for today’s work force, the need for a 2-year or 4-year college degree will continue to increase. Schumer also said that, with the price of tuition on the rise and increasing student loan debt, allowing students and families to apply for benefits they did not previously know about would allow middle class families to better prepare financially for post-secondary education.
Schumer’s letter to Education Secretary Arne Duncan and Treasury Secretary Jack Lew is included below
Dear Secretaries Duncan and Lew,
We write to respectfully request your assistance in providing better information to students and their families about underutilized tax benefits available to help them save and pay for college.
We firmly believe that one of the best investments we can make in our economy is in post-secondary education whether through job training, certifications, or a college degree. However, more needs to be done to make sure that a higher education is accessible and affordable for all students and their families. That is why we need to make sure that they know about all of the tools available, beyond student loans, to help pay for college – including savings plans, tax credits, and tax deductions.
According to a 2012 GAO report, about one in six tax filers failed to take the maximum higher education tax benefit available to them. It is our hope that your departments can develop a simple guide to higher education tax benefits that can be circulated to parents and prospective students, school counselors, financial aid administrators, tax preparers, college admission counselors, and any other interested party. The guide should provide an easy-to-understand overview of the current benefits and provide guidance to students and their families on where they can access more detailed information. This resource should also be available online on the Department of Education’s Financial Aid Toolkit and at the Internal Revenue Service’s Tax Benefits Information Center.
In addition to providing a guide to education tax credits, we also request that you work together to improve the information provided to students and their families through the Free Application for Federal Student Aid (FAFSA) process. As you know, the current online FAFSA application process already requires students to provide tax information in order to estimate student aid eligibility. In order to improve the coordination of all student aid, we ask that you provide an estimate of the American Opportunity Tax Credit (AOTC) that applicants could receive based on the tax information they provide on the FAFSA. We also ask that students be given additional information on the interaction of the AOTC and other student aid, such as Pell and institutional aid, so they can maximize benefits.
The Administration has been focused on ensuring that college is affordable and accessible to anyone interested in obtaining post-secondary education – goals that we strongly share. Thank you for your consideration of our requests, and we look forward to working with you to ensure that students and their families have the resources they need to prepare for college and their future.
Sen. Tammy Baldwin (D-WI)
Sen. Michael Bennet (D-CO)
Sen. Bob Casey (D-PA)
Sen. Christopher Coons (D-DE)
Sen. Mazie Hirono (D-HI)
Sen. Angus King (I-ME)
Sen. Carl Levin (D-MI)
Sen. Jack Reed (D-RI)
Sen. Chuck Schumer (D-NY)
Sen. Jon Tester (D-MT)
Sen. Debbie Stabenow (D-MI)
Sen. Ron Wyden (D-OR)