Right now, children are heading back to the classroom, from kindergarten to college, for a new school year. Every September this reminds us that education is essential to a student’s future, and to our nation’s. A college degree has become just as necessary as a high school diploma once was. And every American who wants to go to college should be able to do so, regardless of his or her financial means. I want to see us meet that goal.
But even as higher education becomes more important, families in the Hudson Valley are finding it more difficult to afford to send their kids to college. Data released last week by the Census Bureau showed that since 2000, declining household earnings have left the middle class working harder and earning less. In New York, the median household income rose by less than 1 percent from 2000 to 2006, while college costs increased by over 20 percent. At the same time, families in the Hudson Valley are being squeezed on all sides by increasing property taxes, health insurance costs, and gasoline and home heating oil prices.
When this happens, the door is slamming shut in the faces of middle class families who have worked hard, saved, done the right thing, and are still faced with the prospect that they might not be able to give their kids the opportunities they had.
I want that to change, and that’s why I’m working to bring tax relief to middle-class families with big college bills to pay. I supported legislation that passed the House of Representatives earlier this year already to cut interest rates on student loans and to bring the value of Pell Grants into line with current costs. But we need to do more. The DIPLOMA Act, which I am co-sponsoring, would give families tax breaks through two options: Couples making up to $160,000 and individuals making up to $80,000 could deduct all college-related expenses including tuition and fees, room and board, and books.
Families exceeding those income levels could take advantage of a fully refundable Earned Tuition Tax Credit for college-related expenses. This refundable tax credit would cover all expenses up to $1500 and half of all expenses up to an additional $2500 per year. The DIPLOMA Act would also help recent graduates by allowing them to fully deduct both the principal and interest costs of their student loan payments for five years after graduation.
The second bill I support, H.R. 686, would make the current income tax deduction for eligible higher education expenses permanent. Since 2002, families have been able to deduct up to $4000 (depending on their income) of tuition and education expenses from their tax return. This deduction is due to be phased out and I’m working to make it permanent.
These bills can help strengthen our communities by cutting taxes and making the dream of a college education a reality for more Hudson Valley families. I look forward to fighting for their passage in Congress.
