Student Aid and Tax Benefits: Better Research and Guidance Will Facilitate Comparison of Effectiveness and Student Use

摘要

The federal government uses a range of policy tools to assist students in financing postsecondary education, including direct expenditures and federal tax law. Title IV of the Higher Education Act (HEA), first adopted in 1965, authorizes federal grant and loan programs, providing a total of $53 billion in assistance to 8.1 million students in fiscal year 1999. In the past decade, the federal government has increasingly relied upon another tool: the tax code. The Taxpayer Relief Act of 1997 allowed eligible taxpayers to reduce their tax liability by receiving up to a $1,500 HOPE or $1,000 Lifetime Learning tax credit for tuition and course-related fees paid. The 2001 Economic Growth and Tax Relief Reconciliation Act created a new tax deduction for tuition expenses, and expanded many existing higher education tax provisions.