COLLEGE'S "STICKER PRICE"
August 19, 2004
Although the price of a college education has gone up, the average student pays less than ever for a public university education -- thanks to an explosion in federal grants, state aid and tax credits.
According to Adrienne Aldredge, a research associate with the National Center for Policy Analysis, in recent years the federal and many state governments have legislated substantial tax breaks and grants for middle-class families:
- A record $105 billion in financial aid (including loans) is available to students and their families, an increase of 12 percent over last year.
- States awarded $6.9 billion in aid last year -- an average of $467 per student.
- Almost 60 percent of undergraduate students receive some form of financial aid.
- Federal Pell grants, which target low-income students, have doubled to $12 billion since 1998.
Middle-class families also reap the greatest rewards from seven new college tax credits and deductions and plenty of financial aid based on both need and merit. Among them:
- The Hope Scholarship Credit, started in 1998, reduces federal income taxes by up to $1,500 per year of college for each college student in a family.
- The Lifetime Learning Credit reduces taxes by up to $2,000 per family and can be taken for an unlimited number of years; however, it cannot be used along with the Hope credit.
- In 2003, 6.5 million families received tuition tax credits that reduced taxes an average of $1,350 per return.
With the recent expansion of federal, state and private aid, a college education is well within financial reach for most low-income students, says Aldrege.
Source: Adrienne Aldrege, "Is College Too Expensive, Or More Affordable Than Ever?" Brief Analysis No. 482, National Center for Policy Analysis, August 19, 2004.
For text http://www.ncpa.org/pub/ba482/
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