Whitehouse, Grassley Introduce Bipartisan Tax-Free Pell Grant Act to Help Make Higher Education More Affordable | U.S. Senator Sheldon Whitehouse of Rhode Island
Whitehouse, Grassley Introduce Bipartisan Tax-Free Pell Grant Act ... Senator Sheldon Whitehouse
sdgtalks
Legislation would simplify access to higher education assistance and increase opportunities for students
Washington, D.C. – Senators Sheldon Whitehouse (D-RI) and Chuck Grassley (R-IA) have introduced the Tax-Free Pell Grant Act, bipartisan legislation to simplify higher education assistance by better coordinating Pell Grants with higher education tax incentives. The current tax code prevents many qualifying students from reaping the full benefits of the American Opportunity Tax Credit (AOTC) and the Pell Grant program. This legislation would remove financial barriers to higher education by better coordinating Pell Grants with the AOTC and fully excluding Pell Grants from taxable income.
“Pell Grants have helped make college more affordable for generations of Rhode Islanders, and I am working to ensure students get the maximum possible benefit,” said Whitehouse. “Our bipartisan legislation will streamline federal student aid programs to minimize the loans and other assistance students need to piece together to go to college.”
“We expect students to work hard in order to maximize their academic success while in school. Likewise, we ought to ensure our tax code is set up to maximize students’ financial success as they pursue higher education,” Grassley said. “This bipartisan proposal would cut through confusing tax rules and permit young Iowans to take full advantage of available financial aid.”
“This bill will provide assistance to thousands of Rhode Islanders who receive federal support toward their postsecondary education,” said Shannon Gilkey, Ed.D., Commissioner of Postsecondary Education. “Making a college degree more affordable and accessible is a universal goal, and I thank Senator Whitehouse for creating the Tax-Free Pell Act legislation as a practical solution for students who need to fully maximize their Pell Grants.”
“By simplifying the Pell Grant process and fully excluding it from taxable income, this legislation empowers economically disadvantaged families to pursue higher education without the burden of financial constraints. The removal of these barriers is paramount in safeguarding accessible education for every Rhode Islander,” said Dr. Rosemary A. Costigan, interim president of the Community College of Rhode Island. “We greatly appreciate Senator Whitehouse’s commitment to making higher education more accessible, and we are proud to work alongside him to benefit of our students.”
Established in 1965, the Pell Grant program revolutionized American higher education. It is named for the late Rhode Island Senator Claiborne Pell, who was the chief sponsor of the program. Pell grants have been a critical form of federal aid, helping millions of young people by covering college costs, including tuition, living expenses, and other fees.
The American Opportunity Tax Credit (AOTC), which was made permanent in 2015 with bipartisan support, provides up to $2,500 for tuition and course materials to students, assisting millions with the cost of college. Despite the success of the Pell Grant and AOTC, America’s complex tax code and the lack of coordination between the two programs prevent students from maximizing their benefits. While Pell Grants used for tuition and fees are tax-free, any portion used to cover other education costs like living expenses is taxed. In addition, students are required to subtract their Pell Grant from the amount of expenses for which they claim the AOTC. To maximize their AOTC, students can use a portion of their Pell Grant to cover living expenses even though that portion is taxed. But calculating the optimal amount of the Pell Grant to include in taxable income is complicated for those without access to sophisticated tax advice, so many students leave benefits on the table or forgo claiming the AOTC altogether. This issue primarily impacts students at lower-cost schools like community colleges.
To fix the problem, the Tax-Free Pell Grant Act would make Pell Grants fully tax-free and no longer require students to subtract Pell Grants from expenses for which the AOTC can be claimed.
The legislation is cosponsored by Finance Committee Chairman Ron Wyden (D-OR).
These reforms have been endorsed by the following organizations:
- American Association of Community Colleges
- The Institute for College Access and Success
- American Association of Collegiate Registrars and Admissions Officers
- American Council on Education
- Association of American Universities
- Association for Career and Technical Education
- American Association of Community College Trustees
- Association of Governing Boards of Universities and Colleges
- Association of Jesuit Colleges and Universities
- Association of Public and Land-grant Universities
- College and University Professional Association for Human Resources
- Council for Christian Colleges & Universities
- Council for Higher Education Accreditation
- Council for Opportunity in Education
- EDUCAUSE
- National Association of College Stores
- National Association of College and University Business officers
- National Association of Independent Colleges and Universities
- Advance CTE
- National Association of Student Financial Aid Administrators
- National Council for Community and Education Partnerships
- National Council of State Directors of Community Colleges
- The Hope Center at Temple University
- Rebuilding America’s Middle Class
- State Higher Education Executive Officers Association
The full bill text is available here.
Press Contact
Meaghan McCabe, (202) 224-2921
SDGs, Targets, and Indicators
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 4: Quality Education
- SDG 10: Reduced Inequalities
The article discusses legislation that aims to simplify access to higher education assistance and increase opportunities for students. This aligns with SDG 4, which focuses on ensuring inclusive and equitable quality education and promoting lifelong learning opportunities for all. The legislation also aims to remove financial barriers and better coordinate Pell Grants with higher education tax incentives, which relates to SDG 10, which aims to reduce inequalities within and among countries.
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 4.3: By 2030, ensure equal access for all women and men to affordable and quality technical, vocational, and tertiary education, including university.
- SDG 10.3: Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies, and practices and promoting appropriate legislation, policies, and action in this regard.
The legislation discussed in the article aims to simplify access to higher education assistance, which contributes to achieving SDG 4.3 by ensuring equal access to affordable and quality tertiary education. It also seeks to reduce inequalities by removing financial barriers and better coordinating Pell Grants with higher education tax incentives, aligning with SDG 10.3.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Percentage of students receiving Pell Grants
- Percentage of students benefiting from the American Opportunity Tax Credit (AOTC)
- Percentage of students claiming the AOTC
- Percentage of Pell Grants used for tuition and fees
- Percentage of Pell Grants used for living expenses
The article mentions the current tax code preventing many qualifying students from fully benefiting from the American Opportunity Tax Credit (AOTC) and the Pell Grant program. By simplifying the Pell Grant process and fully excluding it from taxable income, the legislation aims to increase the percentage of students benefiting from the AOTC and claiming it. Additionally, the legislation seeks to address the issue of students using their Pell Grants for living expenses, which are currently taxed. Monitoring changes in these indicators can help measure progress towards the identified targets.
SDGs, Targets, and Indicators Table
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 4: Quality Education | 4.3: By 2030, ensure equal access for all women and men to affordable and quality technical, vocational, and tertiary education, including university. | – Percentage of students receiving Pell Grants – Percentage of students benefiting from the AOTC – Percentage of students claiming the AOTC – Percentage of Pell Grants used for tuition and fees – Percentage of Pell Grants used for living expenses |
| SDG 10: Reduced Inequalities | 10.3: Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies, and practices and promoting appropriate legislation, policies, and action in this regard. | – Percentage of students receiving Pell Grants – Percentage of students benefiting from the AOTC – Percentage of students claiming the AOTC – Percentage of Pell Grants used for tuition and fees – Percentage of Pell Grants used for living expenses |
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: whitehouse.senate.gov
Join us, as fellow seekers of change, on a transformative journey at https://sdgtalks.ai/welcome, where you can become a member and actively contribute to shaping a brighter future.
