Education Groups Express Support for Tax-Free Pell Grants
Education Groups Express Support for Tax-Free Pell Grants
- AuthorsBumphus, Walter G.
- Institutional AuthorsAmerican Association of Community CollegesAdvance CTEAmerican Association of College Registrars and Admissions OfficersAmerican Council on EducationAssociation of American UniversitiesAssociation for Career and Technical EducationAssociation of Community College TrusteesAssociation of Governing Boards of Universities and CollegesAssociation of Jesuit Colleges and UniversitiesAssociation of Public and Land-grant UniversitiesCollege and University Professional Association for Human ResourcesCouncil for Christian Colleges & UniversitiesCouncil for Higher Education AccreditationCouncil for Opportunity in EducationEDUCAUSENational Association of College StoresNational Association of College and University Business OfficersNational Association of Independent Colleges and UniversitiesNational Association of Student Financial Aid AdministratorsNational Council for Community and Education Partnerships (NCCEP)National Council of State Directors of Community CollegesRebuilding America's Middle ClassState Higher Education Executive Officers AssociationInstitute for College Access and Success
- Subject Area/Tax Topics
- Industry GroupsEducation
- Jurisdictions
- Tax Analysts Document Number2021-27883
- Tax Analysts Electronic Citation2021 TNTF 135-162021 EOR 8-58
- Magazine CitationThe Exempt Organization Tax Review, Aug. 2021, p. 14388 Exempt Org. Tax Rev. 143 (2021)
July 13, 2021
The Honorable Sheldon Whitehouse
United States Senate
SH-530 Hart Senate Office Building
Washington, DC 20510
Dear Senator Whitehouse:
On behalf of the American Association of Community Colleges and the undersigned organizations, I write today to express our enthusiastic support for the Tax-Free Pell Grant Act. This targeted legislation will enable hundreds of thousands of low- and moderate-income college students to receive the full benefits of the Pell Grant program and American Opportunity Tax Credit (AOTC). It will also provide greater support to older, working students who currently receive little benefit from the Lifetime Learning Credit (LLC), along with thousands of other traditional age undergraduate students.
The legislation will generate greater balance in the tax code's student financing benefits, which remain somewhat tilted towards more affluent students. While these students need help to finance college, research consistently shows that low-income students continue to be less likely to complete college than their better-resourced peers. The AOTC and LLC are used by more than 9 million students each year, making this reform even more imperative.
The “Tax Free Pell Grant Act” has three primary components and would:
1) Eliminate the taxation of Pell Grants. Current policy, which taxes the portion of a Pell Grant that exceeds a student's tuition, undermines the program's basic purpose by reducing the effective amount of grant aid for hundreds of thousands of students. It is particularly important that this change be made as Congress considers making significant increases to the Pell Grant maximum. Taxing Pell Grants is counterproductive in any circumstance.
2) Help low- and moderate-income students attending low-cost institutions by eliminating the Pell Grant offset included in the AOTC formula. This offset denies access to the AOTC for hundreds of thousands of students attending public institutions. The elimination of the offset also better aligns the Pell Grant program and federal student aid generally with the AOTC.
3) Expand the AOTC and LLC to include essential student expenses — dependent care and computers. These costs are core aspects of the federal student aid programs and represent financial hurdles for low-income students trying to balance college with other responsibilities. This change will also provide significant benefit to undergraduate students who are no longer eligible for the AOTC.
The Tax-Free Pell Grant Act addresses substantial, lingering inefficiencies in the code's student financing supports. It does so in a focused way that will limit its cost. We urge all members of Congress concerned about helping less affluent and working students, as well as a substantial number of undergraduate students generally, to support this essential legislation.
Sincerely,
Walter G. Bumphus, Ph.D.
President and CEO
American Association of Community Colleges
Washington, DC
On behalf of:
Advance CTE
American Association of Collegiate Registrars and Admissions Officers
American Council on Education
Association of American Universities
Association for Career and Technical Education
Association of Community College Trustees
Association of Governing Boards of Universities and Colleges
Association of Jesuit Colleges and Universities
Association of Public and Land-grant Universities
College and University Professional Association for Human Resources
Council for Christian Colleges & Universities
Council for Higher Education Accreditation
Council for Opportunity in Education
EDUCAUSE
National Association of College Stores
National Association of College and University Business Officers
National Association of Independent Colleges and Universities
National Association of Student Financial Aid Administrators
National Council for Community and Education Partnerships
National Council of State Directors of Community Colleges
Rebuilding America's Middle Class
State Higher Education Executive Officers Association
The Institute for College Access & Success
- AuthorsBumphus, Walter G.
- Institutional AuthorsAmerican Association of Community CollegesAdvance CTEAmerican Association of College Registrars and Admissions OfficersAmerican Council on EducationAssociation of American UniversitiesAssociation for Career and Technical EducationAssociation of Community College TrusteesAssociation of Governing Boards of Universities and CollegesAssociation of Jesuit Colleges and UniversitiesAssociation of Public and Land-grant UniversitiesCollege and University Professional Association for Human ResourcesCouncil for Christian Colleges & UniversitiesCouncil for Higher Education AccreditationCouncil for Opportunity in EducationEDUCAUSENational Association of College StoresNational Association of College and University Business OfficersNational Association of Independent Colleges and UniversitiesNational Association of Student Financial Aid AdministratorsNational Council for Community and Education Partnerships (NCCEP)National Council of State Directors of Community CollegesRebuilding America's Middle ClassState Higher Education Executive Officers AssociationInstitute for College Access and Success
- Subject Area/Tax Topics
- Industry GroupsEducation
- Jurisdictions
- Tax Analysts Document Number2021-27883
- Tax Analysts Electronic Citation2021 TNTF 135-162021 EOR 8-58
- Magazine CitationThe Exempt Organization Tax Review, Aug. 2021, p. 14388 Exempt Org. Tax Rev. 143 (2021)
