Thursday, July 24, 2014 4:18 pm
House votes to simplify education tax breaks
The bill would make permanent a tax credit that provides students with up to $2,500 a year to help pay tuition and related expenses at universities, community colleges and trade and vocational schools. Under current law, the credit is scheduled to expire at the end of 2017.
The credit would replace several overlapping deductions and credits that cover more expenses but can be difficult to navigate. The bill passed by a vote of 227-187.
"Streamlining the number of education provisions and retooling those that are most effective allows us to simplify the code and reduce some of the confusion that exists today," said Rep. Diane Black, R-Tenn., who sponsored the bill.
The White House says President Barack Obama supports making the tax credit permanent but that the administration opposes the bill because it would add $97 billion to the budget deficit over the next decade. The White House statement stopped short of threatening a veto.
Some higher education officials oppose the bill because many graduate students and older students returning to college would lose their tax breaks. That's because students could only claim the credit during the first four years of college.
The American Council on Education, which represents university presidents, sent lawmakers a letter this month opposing the bill. The letter was endorsed by nine other higher education groups.
"The bill would negatively impact many low- and middle-income students and families who benefit under current law," the letter said. "It also would harm graduate students and lifetime learners."
The credit is limited to individuals making less than $90,000 a year and married couples making less than $180,000.