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Student Aid Tax Issues

Traditional nonprofit public and private colleges and universities historically have been granted tax-exempt status. This permits them to devote more of their resources to funding student financial aid, educational activities, academic research, and community programs to achieve their core missions of teaching, research, and public service.

In addition, the Federal Tax Code contains a number of provisions directed specifically at students and families, including various tax credits and deductions, that help make college more affordable and thus encourage greater access to and participation in higher education.

 

The Federal Tax Code impacts colleges and universities' missions through provisions affecting aid to students; incentives for charitable giving; tax-exempt financing; UBIT; and the R&D tax credit.
Higher education associations share their views with the working group on several tax provisions which are important to college students and their families, as well as on charitable giving tax incentives, particularly the itemized deduction for charitable giving.
Higher education associations write to strongly endorse the American Opportunity Tax Credit Act of 2015, which will enhance access to college by making important reforms to the American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit. 
Higher education associations write to express concerns about H.R. 3393, the Student and Family Tax Simplification Act, and encourage further improvements to this important legislation when it is considered on the House floor next week. 
The following testimony is for the record submitted to the United States Senate Committee on Finance Hearing on Higher Education and the Tax Code.
The American Council on Education and higher education associations, write regarding a discussion draft of the Tax Reform Act of 2014.
Higher education associations, write to House and Senate members to urge them to include extensions of the above-the-line deduction for qualified tuition and related expenses (tuition deduction) and the Individual Retirement Account (IRA) Charitable Rollover in any tax extenders legislation that is enacted this year (2014). 
Expired & Expiring Tax Provisions Important to Research Universities.
The following backgrounder is about Internal Revenue Code Section 222 where the qualified tuition and related higher education expenses deduction allows students or parents to deduct up to $4,000 in qualified higher education expenses from their taxable income.
The following backgrounder is about Internal Revenue Code 221 which is a federal income tax deduction that permits taxpayers with less than $75,000 in modified adjusted gross income for a single filer or $155,000 for joint filers to deduct up to $2,500 in federal student loan interest payments each year.