Minority Students Could Benefit From New Education Tax Package
Students of color could reap some financial gains from an education tax package approved by the Senate
Finance Committee.
One key provision of the bill would eliminate all taxes on National Health Service Corps Scholarships, in which graduates of health programs receive scholarships in exchange for a commitment to work in areas with shortages of health personnel. Corps members also could participate in programs that specifically target groups that are underserved by the medical community.
Another provision of the tax bill would allow more deductions of student loan interest. Under current law, those no longer in school may claim deductions for up to five years — provided they earn no more than $55,000 in a one-person household and $75,000 in a two-person family.
The Finance Committee plan would scrap the five-year time limit, allowing deductions to continue until loans are repaid completely. The bill also raises income eligibility for the program, so that single individuals earning up to $65,000 and families earning up to $130,000 can qualify for some deduction.
Other sections of the bill would increase annual contributions to education savings accounts and make permanent a section of the U.S. tax code allowing students to get up to $5,250 of employer-provided tuition aid tax-free.
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