Federal higher-ed tax breaks now exceed cost of grants for lower-income students

Feb 28, 2017 by

The cost of tax deductions that previous research has shown disproportionately help wealthier families pay for college continues to outpace what the federal government spends on grants for low-income students, a new study points out.

The total amount of tax credits has increased 13-fold since 1990, when adjusted for inflation, and reached $34.5 billion in 2014, the last year for which the figures are available, according to the study, by the Pew Charitable Trusts.

That’s $4.1 billion more than went to the government’s Pell Grant program to help low-income students pay for college.

The program provides a tax break of up to $2,500 per undergraduate, per year, toward the cost of college expenses.

Another nearly $2 billion in tax credits were applied to investment earnings from so-called 529 college savings plans, Pew found. Only one in 10 families that earn less than $50,000 knows about 529 plans, a survey by the investment firm Edward Jones found.

Source: Federal higher-ed tax breaks now exceed cost of grants for lower-income students | The CT Mirror

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