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Issue Brief

Charitable gifts are a critically important source of revenue to universities. These gifts are sometimes used to fund current operations through annual giving campaigns. Many charitable gifts are made specifically to an institution's endowment to support specific purposes and activities - such as student scholarships or medical research - both in the present and for many years to come.
Learn about why tax-exempt financing is critical for universities to advance their mission of educating and innovating for the public good.
The Lifetime Learning Credit (LLC) is one of two income tax credits to help offset the costs of higher education.

The American Opportunity Tax Credit (AOTC) is a partially-refundable tax credit up to $2,500 that helps students cover tuition and college expenses.

 

What Is the American Opportunity Tax Credit?

The vast majority of public and private universities and colleges are tax-exempt entities as defined by IRC Section 501(c)(3) because of their educational purposes—purposes that the federal government has long recognized as fundamental to fostering the productive and civic capacity of its citizens—and/or the fact that they are state governmental entities.
Unrelated business taxable income (UBIT) is income from a trade or business that is regularly carried on by a tax-exempt organization and is not substantially related to the organization's exempt purpose.
The federal government sponsors university research to help our country prosper.
This is the AAU summary of the H.R. 2471, Consolidated Appropriations Act, 2022, which will fund the federal government until the end of the fiscal year, ending September 30, 2022.
Employer-provided educational assistance benefits (Section 127) allows employers to offer their employees up to $5,250 annually in tax-free educational assistance for undergraduate or graduate-level courses.
Learn more about the student loan interest deduction (SLID) and why it's important.