| |||||
Education Tax Incentives |
Education tax credit almost identical to House, but with up to a $1,500 credit for community college. Estimated cost: $20.4 billion over five years, $45.3 billion over 10 years. Savings accounts like the House, but withdrawals tax-free. Contributions up $2,000 plus child tax credit contributions. Estimated cost: $5 billion over five years, $18.1 billion over 10 years. Like House, tax-free withdrawals from existing IRAs. Estimated cost: $812 million over five years, $1.7 billion over 10 years. Unlike House, $2,500 student loan interest deduction for individuals with incomes below $40,000; couples below $80,000; phase out above $50,000 (single)/ $100,000 (joint). Estimated cost: $1.1 billion over five years; $3.3 billion over 10 years. Permanent tax exclusion for employer tuition assistance. The house extends the exclusion only through 1997. Estimated cost: $3.5 billion over five years, $8 billion over 10 years. |
Credit to $1,500 for tuition and books for those with incomes up to $40,000 a year; couples up to $80,000. Phased out for individuals above $50,000, couples above $100,000. Estimated cost: $22.3 billion over five years, $49.6 billion over 10 years. Anyone could open an Education Investment Account and deposit $5,000 a year up to $50,000. At withdrawal for tuition, only withdrawn interest would be taxed. Estimated cost: $7 billion over five years, $22.4 billion over 10 years. All taxpayers could deduct up to $10,000 per student per year and a maximum of $40,000 for undergraduate expenses paid through state-sponsored pre-paid tuition programs. Estimated cost: $889 million over five years, $2.5 billion over 10 years. Taxpayers could withdraw from IRAs penalty-free to finance any post-secondary pursuit. Estimated cost: $758 million over five years, $1.2 billion over 10 years.
|
HOPE education credit will be available without grade requirements and without reduction by the amount of other Federal grants. The credit would start at $1,100 in 1997 and rise to $1,500 by 2001. The credit would be available in full for the first $1,000 and at 50 percent for the rest up to the maximum. After the student ceases to be eligible for HOPE, a second-tier credit against tuition expenses will be available. This credit would be in the amount of 20 percent of expenses with the maximum amount phased in starting at $4,000 in 1997 to $10,000 in 2001. Value of employer-provided educational assistance for college courses will be permanently excluded from income. Every taxpayer will get a deduction for student loan expenses up to an annual maximum of $2,500 during the first 60 months of the loan; it will phase out between incomes of $40,000 to $50,000 (single)/ $80,000 and $100,000 (joint). |
HOPE Scholarship credits would be available for all four years of post-secondary education. For the first two years, a 100 percent tuition credit is available. The credit would be phased in starting at $1,100 in 1997 and rising to $1,500 in 2001 and thereafter. After the first two years, a scholarship credit of 20 percent of tuition costs is available. The HOPE scholarship credits are not reduced by a student's Pell Grant and other nontaxable Federal scholarship. These credits will be available to students from families with income under $50,000 (single)/ $80,000 (joint). Employees will be allowed to exclude up to $5,250 of education assistance from an employer tax free. |
A credit of up to $1,500 a year for the first two years of college, starting in 1998. Students could receive a 100 percent credit for the first $1,000 in tuition and book expenses, and then a 50 percent credit for up to another $1,000. Eligibility would be phased out for families with incomes starting at $80,000. The credit could be taken for expenses after accounting for federal tuition grants. After 2002, the credit would increase to a maximum of $2,000. A credit of up to $1,000 a year for the third and fourth years of undergraduate expenses, plus graduate school and courses taken by working people. The credit would increase to $2000 after 2000. Estimated cost: $34.5 billion over 5 years, $94.1 billion over 10 years. |