Washington, DC – This past week, Congressman Mark DeSaulnier (D, CA-11) announced commonsense legislation to protect low income students from being taxed on using their Pell Grants for non-tuition goods and services. He is joined in introducing the Pell Grant Flexibility Act (H.R. 5764) by his Republican colleagues Representatives Lee Zeldin (NY-1), Thomas MacArthur (NJ-3), and Peter King (NY-2) as well as 16 leading education organizations including The Institute for College Access and Success (TICAS) and the National Education Association (NEA).
Federal Pell Grants can be used to cover both tuition and non-tuition expenses. However, when students use these funds for non-tuition expenses their Pell Grant is taxed, while strictly tuition costs are exempt. Each year approximately eight million students receive Pell Grant funding. A majority of these recipients have family incomes under $40,000 per year, and typically borrow higher amounts of student loans to cover the costs associated with higher education.
“When it comes to college affordability, paying tuition is not the only cost that worries students and families. Expenses like textbooks, off-campus housing, transportation, and child care account for roughly 60 to 80 percent of total cost of a higher education. We must allow students to use every Pell dollar toward focusing on their earning their degree,” said Congressman DeSaulnier
“The rising cost of higher education is a crushing burden to many families, but access to Pell grants offer substantial assistance. The ability to use Pell Grants for expenses other than tuition and to have access to those funds on a tax-free basis is vital. NEA applauds Rep. DeSaulnier for introducing the Pell Grant Flexibility Act,” said NEA Director of Government Relations, Mary Kusler.
“Pell Grants should not be treated as taxable income regardless of which qualified education expense they are used to cover. By eliminating the inconsistent tax treatment of Pell Grants, this bill will help to increase fairness, simplify the tax code, and improve coordination between Pell Grants and the American Opportunity Tax Credit (AOTC),” said TICAS President, Lauren Asher.
The complete list of organizational support includes: American Association of Community Colleges (AACC), American Council on Education (ACE), Association of American Universities (AAU) , Association of Jesuit Colleges and Universities (AJCU), Association of Public and Land-grant Universities (APLU), Hispanic Association of Colleges & Universities (HACU), Institute for Higher Education Policy (IHEP), National Association of Independent Colleges and Universities (NAICU), National Association of Student Financial Aid Administrators (NASFAA), National College Access Network (NCAN), National Education Association (NEA), National Urban League, Service Employees International Union (SEIU), The Institute for College Assess and Success (TICAS), United Negro College Fund (UNCF), Young Invincibles.
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