Today, U.S. Rep. Lloyd Doggett (D-TX), a senior member of the House Ways and Means Committee, introduced a bill that would extend the American Opportunity Tax Credit (AOTC) through 2013 to make college more affordable for millions of families. Without Rep. Doggett's bill, the AOTC would expire at year's end.
"While rightly concerned with the federal deficit, we must also remain concerned with the "opportunity deficit,' when students cannot develop their God-given potential to the fullest extent," said Rep. Doggett. "Extending the "More Education' tax cut will continue to close this gap, allowing more students to achieve all the education for which they are willing to work."
The American Opportunity Tax Credit, authored by Rep. Doggett, was enacted as part of the 2009 Recovery Act and has provided billions of dollars to working families and students seeking more education after high school. The tax credit provides up to $2,500 of the cost of tuition and related expenses paid during the taxable year. Forty percent of the tax credit--up to $1,000--would be refundable, meaning that families who need help the most will benefit from the credit. Also, for the first time since higher education tax credits were created, this tax cut expands the definition of a "qualified education expense" to include textbooks, making them more affordable for students.
According to a report by the Treasury Department, the AOTC has significantly expanded aid nationwide to the 12.5 million students who took advantage of the program in 2009. In Texas, 671,000 students and families received over $1.1 billion. The AOTC was designed to replace and improve upon existing education tax benefits so that more students and their families could receive college tuition assistance and that assistance would be larger. It has accomplished this goal which is why the President has called on Congress to make the AOTC permanent, but at a minimum the credit should be extended for another year.
"As college costs rise, much work remains to be done to increase accessibility and affordability for students seeking more higher education. With the enactment of the AOTC we have made strides in the right direction over the past three years by making one of largest investments in college aid in our history. We cannot afford to decrease our investment in education or increase taxes on hard working American families that are looking to get ahead," said Rep. Doggett.