June 24, 2014
Lindsey Held (202) 224-4515
Wyden Calls For Lower Student Debt From The Start
Finance Chairman Says Education Tax Benefits Need to be Simplified and More Accessible
WASHINGTON – Senate Finance Committee Chairman Ron Wyden, D-Ore., at a hearing today called for comprehensive tax reform, with a focus on simplifying the tax credits available for Americans pursuing higher education.
“I want to focus on policies that will mean students have less debt from the start,” Wyden said. “The crazy quilt of tax benefits and aid programs on the books today doesn’t get that job done. As a result, there are millions of Americans who want to get a college degree, but can’t.”
Willamette High School graduate Amber Lee testified at Tuesday’s hearing. Ms. Lee, who dreams of becoming a physician, comes from a low-income household with a single mother and knew paying for college by herself would be impossible. Despite an A-average GPA and participation in various extra-curricular activities, scholarships have only covered a small fraction of her tuition for Portland State University, which she will attend in the fall. She is working 35 hours per week this summer to reduce her financial burden. Ms. Lee testified that both she and her mother were unaware of the various tax credits available to help her lower her debt burden from the start.
“It is absolutely appalling to me that students experience so many disheartening financial setbacks just for trying to further their post high school education,” Ms. Lee said. “We are immersed in a culture that supports the freedom to challenge ourselves, to search for new knowledge, and to gain meaningful careers, but we are constantly refused the opportunity to do so through the lack of options we have when it comes to paying for education. The idea of a college education has become only possible for the privileged, and that needs to change now.”
In Oregon, the average four-year college graduate with debt owes nearly $27,000. It now takes at least 36 calculations for a family to navigate the overlapping web of incentives for higher education in the tax code. Education tax incentives cannot be allowed to drive inequality the way they do in today’s flawed tax code.
Wyden said the committee needs to make education tax incentives more accessible for all Americans by simplifying them to three credits or deductions that are user-friendly and get students and families the help they need. This improved system should be based on a few key goals: saving; covering current costs; and easing the burden of loans. Wyden said America can’t afford to let higher education become a luxury good.
“There are common-sense steps I believe this committee can take on a bipartisan basis to help students avoid taking on paralyzing amounts of debt,” Wyden said. “Today's hearing showcases just one of our committee's challenges in our bipartisan effort to fix America's tax code. It is an especially important one, and we are determined to get it right.”