[Congressional Record (Bound Edition), Volume 147 (2001), Part 6]
[Extensions of Remarks]
[Page 7910]
[From the U.S. Government Publishing Office, www.gpo.gov]



 ON THE INTRODUCTION OF HIGHER EDUCATION AFFORDABILITY AND FAIRNESS ACT

                                 ______
                                 

                           HON. RUSH D. HOLT

                             of new jersey

                    in the house of representatives

                         Wednesday, May 9, 2001

  Mr. HOLT. Mr. Speaker, I rise today to introduce a bill that is very 
important to me and many New Jersey families--the Higher Education 
Affordability and Fairness Act.
  As a scientist and former teacher, I have spent many years working in 
post-secondary education, and I have seen how fortunate we are. We have 
some of the best colleges and universities in the world here in the 
U.S. and in New Jersey. However, with the increasing costs of higher 
education, our high quality colleges are becoming inaccessible to many.
  According to the College Board, since 1980, the price of a college 
education has been rising between two and three times as fast as the 
Consumer Price Index.
  In fact, tuition and fees for a four-year college education have 
risen 115 percent over inflation since the 1980-81 school year, while 
median household income has risen only 20 percent.
  What is most frustrating is that despite the economic prosperity many 
families have enjoyed over the past decade, the cost of a college 
education continues to rise at a rate faster than these families can 
afford.
  As a result, more and more families are forced to borrow money to 
meet tuition costs.
  In fact, according to the National Association of Independent 
Colleges and Universities, nearly 80 percent of their full time, 
dependent undergraduates receive some sort of financial assistance.
  This shift from grant-based assistance programs to loan-based 
assistance programs increases the financial burden of attending college 
because students and families must then assume interest costs, which 
can add thousands to the total cost of tuition. In fact, one of my 
staffers tells me that he must pay over $9,000 in student loan interest 
a year.
  We must change this by making college more affordable for our 
students and their families.
  In years past, Congress has sought to address college affordability 
by providing a HOPE Scholarship tax credit of up to $1,500 for the 
first two years of expenses and a Life-time Learning tax credit of up 
to $1,000 for the third and fourth years as well as for graduate 
school.
  In addition, for low-income families, Congress has increased funding 
to $8.75 billion for Pell Grants, a need-based grant program that will 
help send four million Americans to college this year.
  While this is a good start, much more should be done.
  Under current law, taxpayers cannot deduct higher education expenses 
from their taxes, unless the expenses meet a very narrow definition as 
``work-related''.
  In addition, families living in high cost states like New Jersey or 
California do not receive the same benefits as those living in lower 
cost states because of unfair income limitations. Finally, a family who 
invests in an Education IRA cannot use the savings for a child's 
college education and also receive the benefits of the HOPE or Lifetime 
Learning tax credits.
  I am proud to introduce the Higher Education Affordability and 
Fairness Act (HEAFA), which will make higher education more affordable 
by allowing higher education expenses to be tax deductible.
  HEAFA would allow families who take the HOPE tax credit to deduct up 
to the next $8,000 in tuition expenses not covered by the credit, 
capping the deduction at $15,000 in tuition expenses in one year if a 
family has more than one child in college. Families ineligible for the 
Hope Scholarship, due to its income limitations, would be able to 
deduct $5,000 of tuition costs.
  The bill would also increase the Lifetime Learning credit to 20 
percent of $10,000 of tuition, from the current 20 percent of $5,000, 
and provide families with the choice of taking either the credit or a 
deduction on up to $10,000 of tuition, $5,000 if a family earns more 
than $120,000 a year.
  HEAFA would raise the phase-out limit for the HOPE credit to $60,000 
for singles and $120,000 for couples, allowing more families to 
benefit.
  In order to ensure that savings go to the intended beneficiaries, 
families and students, the bill directs an annual study to examine 
whether the federal income tax incentives to provide education 
assistance affect higher education tuition rates.
  Finally, to address the needs of low-income families, the bill 
expresses the sense of the Senate that the maximum annual Pell Grant 
should be increased to $4,700 per student.
  College is the best investment of a lifetime. We must take steps to 
ensure that higher education is within the reach of all Americans so 
that they are prepared to meet the challenges they will face in our 
increasingly competitive world.
  We must make it easier for families to afford college, and we can do 
so this year by allowing college tuition and other expenses to be tax 
deductible.
  I urge my colleagues to support me in this important bill. We can all 
agree that these are tax cuts we truly need.

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