Schumer Announces Senate Passage of His College Tuition Tax Deduction that Saves Middle Class Families Up to $1,000 Every School Year

Press Release

SCHUMER ANNOUNCES SENATE PASSAGE OF HIS COLLEGE TUITION TAX DEDUCTION THAT SAVES MIDDLE CLASS FAMILIES UP TO $1,000 EVERY SCHOOL YEAR

Schumer-Authored College Tuition Tax Deduction, Which Allows Millions of Middle Class Families to Deduct up to $4,000 in Tuition Costs, Expired at the End of 2007

As College Tuition Skyrockets - 52% on Average in New York - and Middle-Class Household Income Drops, Extension Means Families Can Use the Deduction This April

Schumer: Families and Students Need This Deduct

U.S. Senator Charles E. Schumer today announced that his "College Tuition Tax Deduction" extension passed the full Senate. Schumer said this tax deduction is needed now more than ever as college tuition has skyrocketed, while simultaneously middle class household income has fallen. The deduction, which expired at the end of 2007, allows middle class families to deduct up to $4,000 in tuition expenses on their taxes, resulting in a $1,000 saving each year.

"Passing a college tuition tax deduction is just what the doctor ordered for New York's middle class families, who are struggling more than ever to afford skyrocketing tuition," said Senator Schumer. "These lean times mean hard choices about their children's future and the college tuition tax deduction makes these choices a little easier by saving families thousands of dollars every year. I am proud to have led the fight to preserve this vital program."

In the last decade, college tuition has skyrocketed across the country in light of rising costs. According to the College Board, private, four-year college tuition rose 6.3 percent last year while public four-year school tuition rose 6.6 percent. In New York, where public institutions have struggled to keep costs down, the total cost of attending an in-state four-year, public school (tuition, room, board and the necessary costs such as books, lab fees, etc.) rose 52 percent between 1999-2000 and 2008-2009 school years. The average cost of tuition at a four-year private college in New York has increased just as quickly, up 58% since 1999-2000 to over $37,000 for the 2008-2009 school year.

The result of skyrocketing tuition is more students are graduating with massive amounts of debt. According to the Institute for College Access and Success, students graduating from New York universities in 2006 had an average of $21,092 in debt. With the recent tightening in the student loan credit market, more students of all income levels are being forced into borrowing from both federal and private lenders to finance college and they are borrowing in higher amounts than ever before. Others are forced to make tough decisions about whether or not higher education is feasible. According to the federal Advisory Committee on Student Financial Assistance, cost factors prevent 48 percent of college-qualified high school graduates from attending a four-year institution and 22 percent from attending any college at all. This amounts to 400,000 students that are unable to attend a four-year institution every year, and nearly 170,000 that do not attend college at all.

Schumer said: "Extending the college tuition tax deduction will help ease the burden on American families who are doing the best that they can to afford college for their kids. A well-educated workforce is the lifeblood of a thriving economy. So now more than ever, we need to make sure that we are offering our students affordable opportunities for higher education."

The college tuition tax deduction, signed into law in 2001 and based on bi-partisan legislation written by Schumer, originally allowed middle-income families to deduct $3,000 from their tax return. The deduction was raised to $4,000 a year in 2004. In 2007, single filers who made up to $65,000 a year and married couples with incomes up to $130,000 qualified for the tuition deduction. There was also a smaller, $2,000 deduction for those who earned more. According to the Internal Revenue Service, in 2003, 3.6 million families took advantage of the deduction, saving them about $4.5 billion

In legislation passed last night, the Senate voted to renew the lapsed tax break for two years, through the end of 2009, so come tax time in April, families can rest assured that they will be able to take a deduction on this year's tuition expenses.

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