Emanuel Touts Bill to Simplify Higher Education Credit

"We are breaking down the barriers working Americans face when it comes to complicated financial paperwork," said Emanuel. "This program is proof that help on a tax form or a financial aid form can make an extraordinary difference in the lives of many hard-working Americans."

Authorized by the Internal Revenue Service, volunteers from the Tax Assistance Program -- It Adds Up ® (TAP) help families with incomes of $40,000 or less file for the tax credits, refunds and other tax benefits to which they are entitled. To date, 341 people have benefited from TAP's services at Emanuel's district office and at Wilbur Wright Community College for a return of nearly half a million dollars. In addition to tax-filing, the nonprofit service also provides the 5th Congressional District with free assistance on the FAFSA financial aid form. The current FAFSA college loan application is over one hundred questions. It can take an average family several days and sometimes several tries to complete the questionnaire.

"Multi-billion dollar corporations fill out 13-question forms to receive million dollar Export-Import Bank loans. Yet, the current FAFSA form includes over 100 questions," said Emanuel. "The TAP volunteers help college hopefuls navigate the frustrating and overwhelming process, and get college hopefuls one step closer to fulfilling their dreams."

In Congress, Emanuel introduced a solution to the problem of confusing and long forms by proposing the College Made EZ Act to simplify the FAFSA form. Additionally, Emanuel announced introduction of the Universal Higher Education Tax Credit Act of 2007. This legislation will dramatically simplify the tax code to create one easy-to-use higher education tax credit.

"For many, going to college is the ticket to success so if we want young people to go to college, they shouldn't have to stop first at H+R Block," said Emanuel. "Right now, the tax code is littered with wellintentioned but confusing and often contradictory education provisions, with different rules, definitions and limits.

Emanuel's bipartisan Universal Higher Education Tax Credit Act of 2007 will consolidate the three existing tax breaks students currently rely on to help pay for college: the Hope Scholarship, the Lifetime Learning Credit, and the deduction for higher education expenses. This simplifies tax filing and cuts down on mistakes that lead to penalties and missed opportunities.

"This law will help pay the tuition bills for those who need it the most. About 400,000 community college students will receive a benefit that don't benefit now and about 750,000 will receive a larger benefit than they do now," said Emanuel. "And, this bill will, for the first time, give one-third of American household the ability to qualify for a tax benefit for current education credits or deductions."

Specifically, the Universal Higher Education Tax Credit Act of 2007 will:

• Simplify and Consolidate Three Higher Education Tax Incentives. Emanuel's bill consolidates the Hope Credit, Lifetime Learning Credit, the tuition tax deduction into one simple, streamlined, easy-to-understand credit, which combines the best features of the existing tax benefits. According to a GAO study, 27% of all eligible tax filers did not claim either the tuition deduction or a tax credit.

• Make College More Affordable for the Middle Class. The bill provides a maximum $3000 credit that is available on a per student basis. The bill expands eligibility for the credit to higher income levels and increases the benefit for middle- class families struggling to keep up with rising tuition costs.

• Makes College More Accessible for the Middle Class. One-third of all American households do not have federal income tax liability. A refundable education credit will allow these households, for the first time, to receive a tax benefit for education. The credit will benefit 11 million students at four-year colleges and universities.

• Creates Universal Credit for All Post-Secondary Education. The credit is available for all four years of college (public or private), two years of community college, two years of graduate school, and is available to individuals that are updating their skills in a training or certificate program.

• Covers Non-Tuition Costs. The average cost for books and supplies for two-year community college students is $850. Credit can be used to cover the cost of books, supplies, equipment, room and board, and transportation. The bill synchronizes the definition of eligible education expenses used in federal financial aid programs, like Pell Grants, and the higher education tax credit.