More on the President’s College Promise Proposal

Posted by on 01.22.15 in Education, Uncategorized

Earlier this week, I promised to provide more detail on President Obama’s College Promise proposal. InsideHigherEd Editor Scott Jaschik prepared a detailed analysis of the Promise and related proposals,  Here are highlights:

  • Raise taxes on capital gains in ways the White House says will affect only the wealthiest 1 percent of Americans.
  • Impose new fees on financial institutions that borrow heavily.
  • Use the billions raised by the new taxes to pay for the community college program (estimated to cost $60 billion over the next decade).
  • Consolidate a series of education tax breaks into a single program to be called (as a major program is called now) the American Opportunity Tax Credit (AOTC), and make the tax credit, currently due to expire in 2017, permanent.
  • Expand eligibility for the tax credit to those enrolled less than half time.
  • Exempt Pell Grants from taxation (currently only the portion used for educational expenses is exempt).
  • Exempt Pell Grants from the calculations of eligibility for the American Opportunity Tax Credit, which should make it possible for many more Pell-eligible students to benefit from both programs.
  • The White House estimated that the combined impact of the tax benefit proposals would provide students with $2,500 in educational aid a year for up to five years; the current American Opportunity Tax Credit is available for four years.

The White House estimates that the combined benefit of these tax benefit would provide students with $2,500 in educational aid.

Importantly, many of these changes, particularly those impacting tax policy, require congressional review and approval.  Comments from members of the U.S. House and Senate range from full support to little or no support (see Senator Stabenow’s comments here and Congressman Huizenga’s comments here).  I encourage the President and Congress to find a way to support proposals increasing resources for community college students in a fiscally viable manner.  This will help students earn valuable degrees, certificates, and credentials so important in today’s competitive talent marketplace.

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