Last month I delivered testimony much like this statement to both the House Ways and Means Committee and the House Committee on Education and the Workforce. I told the committee that the higher education reauthorization seems destined to be the caboose on this debate over the federal role in financing postsecondary education that has been sparked by the President's tuition tax proposals. Until Congress has decided the extent and nature of tuition assistance that may be incorporated in the tax code, the education authorizing committees will not have all the information they need to proceed with reauthorization. The Administration has said that it intends to hold harmless the student financial aid that beneficiaries of the proposed tuition breaks might otherwise receive. In other words, the Administration says the tuition tax relief given with one hand should not be taken away by the other.
Campuses have the right to award their own funds as they see fit.
On the other side of the balance sheet, taxpayers receiving either a tuition tax credit or deduction would show less U.S. taxes paid under the Federal Methodology, thus potentially reducing their eligibility for Title IV aid. It's premature to speculate any further at this stage on such scenarios of interaction with federal student aid eligibility. The Administration has said that its tuition tax proposals are intended to pick up where current student aid benefits leave off, implying that the tax proposals are for the middle class while financial aid only reaches the poor. There is a misconception here. But my point is that existing student aid is not just for the poor, far from it.