New York's Senator
CHARLES E. SCHUMER

FOR IMMEDIATE RELEASE June 7, 2001

SCHUMER: COLLEGE TUITION OFFICIALLY TAX DEDUCTIBLE FOR FIRST TIME IN HISTORY

Provision in tax bill modeled on Schumer legislation to make college tuition tax deductible signed into law by President Bush

Schumer vows to fight for an even larger deduction to bring real relief to families struggling to keep up with skyrocketing college tuition costs

US Senator Charles E. Schumer today said that the tax bill signed by President Bush yesterday contains a new college tuition tax deduction to help New York families pay for college. The deduction, modeled on Schumer's Make College Affordable Act, makes $3,000 in college tuition costs tax deductible by 2002 and $4,000 tax deductible by 2004. Schumer said the deduction marked a major breakthrough in the effort to make college tuition tax deductible and vowed to fight for an even larger exemption.

"For the first time ever, a portion of college tuition is tax deductible for American families. This new provision means real dollars and real savings for middle class families who have to beg and borrow to send their kids to college, " Schumer said. "But we still have a long way to go. In the upcoming months, I will push to more than double this exemption so that more families can make their dreams of sending their children to college a reality."

The provision would allow single filers with taxable income of up to $65,000 and joint filers with income of up to $130,000 to deduct $3,000 in tuition costs from their taxable income in 2002 and 2003. In 2004 and 2005, single filers and joint filers will be able to deduct $4,000 in tuition costs from their taxable income. In addition, single filers earning between $65,000 and $80,000 and joint filers earning between $130,000 and $160,000 would be allowed to deduct $2,000 in tuition costs, in 2004 and 2005.

Schumer said that the inclusion of the exemption in the tax bill marked an important first step towards making college tuition tax deductible for families, but stressed that an even larger deduction was needed to provide real relief. The Senate narrowly defeated a Schumer amendment to the tax bill last month that would have increased the tax deduction from $5,000 in 2005 to $10,000 in 2006 and to $12,000 in 2008 and beyond.

Schumer said that he would renew his push for the Make College Affordable Act (MCAA), bipartisan legislation introduced earlier this year to make up to $12,000 per year in college tuition costs tax deductible and create a $1,500 tax credit to help college graduates pay off their student loans. The bill, which is cosponsored by Democrats Joseph Biden and Evan Bayh and Republicans Olympia Snowe and Gordon Smith, would save a typical middle class family over $3,000 per year.
The cost of college tuition has increased faster than any other major consumer item including health care over the last 20 years, surging from $3,617 in 1980 to $16,332 in 2000. Public college tuition has also ballooned from just $804 in 1980 to $3,510 today. Even in real, inflation adjusted dollars the price of public and private college tuition has doubled since 1980.

Student debt load has also skyrocketed in recent years, increasing by 50% in New York in just the last four years alone. Nearly one million students nationwide have credit card balances exceeding $7,000, with most of this debt coming from tuition, books and basic living expenses. And with the Educational Testing Service predicting the number of students enrolling in college to jump from 13.4 million in 2000 to 15 million in 2015, debt loads are only going to increase more.

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