WASHINGTON, D.C. – With college costs at record highs and as families receive financial aid packages, U.S. Sen. Sherrod Brown (D-OH) outlined legislation that would increase and expand eligibility for a tax credit that provides critical relief for middle-class families by enabling them to offset the cost of college tuition. During a news conference call today, Brown released a map of the more than 373,000 Ohio families who utilized the American Opportunity Tax Credit (AOTC) to save more than $426 million in 2012.
“Investing in college shouldn’t bankrupt families,” Brown said. “College is the surest way to provide an onramp to the middle class, but its price is out of reach for too many students. My legislation would expand the AOTC – a critical lifeline for so many – by increasing the size of the credit and making it available to more families. Ohioans are already saving money with this tax credit, and thousands more could if we pass this legislation.”
The AOTC, initially created in 2009, is currently available to families earning less than $180,000 per year and provides a tax credit of up to $2,500 towards tuition and certain expenses required for enrollment at a higher education institution, including the cost of books, supplies, and equipment needed for a student’s studies. Brown is an original cospsonor of legislation that would expand and increase the savings a family can receive per student to $3,000 per year and make the credit available to families earning up to $200,000 per year.
Specifically, the American Opportunity Tax Credit Permanence and Consolidation Act would:
- Make the AOTC a permanent part of the tax code, eliminating uncertainty that it will be reauthorized for many families who depend on it;
- Increase eligibility by changing the lifetime limit of the credit from a number of years claimed—four years under current law—to a maximum monetary amount of $15,000;
- Expand eligibility by allowing families earning up to $200,000 per year—or $100,000 as a single-filer—to take advantage of the credit; and
- Increase the refundable portion of the credit to $1,500, benefiting low- and moderate-income students with limited tax liability.
Ohioans can visit the Internal Revenue Service (IRS) website to find more information about the AOTC and access forms to file for the credit.
Brown is working to make college more affordable for all Ohioans. As a member of the Senate Finance Committee, Brown is a cosponsor of the Students Emergency Loan Refinancing Act, legislation that would give student loan borrowers a chance to refinance their debt at the same low rates offered to new borrowers in the student loan program. The bill would also provide those who are in good standing the option of refinancing their high-interest private student loans down to the rates offered to new federal student loan borrowers in the 2013-2014 school year.