Wednesday, January 27, 2016

The Make Student Grants Truly Tax-Free Act

Our very own Senator Richard Blumenthal (D) has sponsored an act to make more student grants tax-free. This effort was introduced in the Senate Committee of Finance on January 21st of this year. The bill is referred to as the S.2462 - Make Student Grants Truly Tax-Free Act, which amends section 117 of internal revenue code 1986. If passed, federal student aid like the Federal Pell Grant, The Iraq and Afghanistan Service Grant, and the TEACH Grant will be pulled from the list of taxable gross income. This  reduction of the financial pressures on college students is a step in the right direction, helping low-income students better afford college.The bill would go into effect in the taxable years after December 31st 2016. This bill will no doubt be difficult to pass considering that the majority of congress is republican, though slipping pork into this act would probably make it go smoother. It's an important measure to take in consideration of the supposed student debt crisis afflicting recent college grads and college students. Does this bill have a ghost of a chance? Will it's implementation be effective in aiding students working toward their degree?

Sources:

4 comments:

Kyle said...

Since the majority of the Senate is republican, it will be quite difficult for this bill to be passed. But as you said, if this bill uses pork barreling effectively, the odds of it getting passed will increase. This bill definitely goes against the ideology of many senators and will many of them will resist the bill, and thats where the magic of pork will come into play. I wouldn't give up entirely on this bill, but I wouldn't hold my breath waiting for it to be passed any time soon, as this bill might take some negation to be passed.

Unknown said...

As Kyle said, this bill does not really have a chance at being passed because the Senate is majority Republican. However, if this bill were passed it would be very helpful to college graduates. Student debt is very hard on students financially and makes it difficult to save money for many years after graduating. 17% of students who take out student loans end up being behind in paying off their loans, and since 1999 student debts have increased by 500%, while salaries for young workers has decreased 10%. With incomes decreasing, while loan costs are increasing, the government should be helping students pay for education as much as possible. Unfortunately, this is not aligned with the Republican agenda, so there is a very small possibility that this will take effect.

Sources:
http://www.usnews.com/news/articles/2015/06/08/heaviest-college-debt-burdens-fall-on-3-types-of-students
http://www.huffingtonpost.com/kyle-mccarthy/10-fun-facts-about-student-loan-debt_b_4639044.html

maybesarah said...

As both of the previous commenters said, this bill will be nearly impossible to pass in a Republican majority Congress. Even look at the comments of my source, people say things like "Liberals…they want everything to be free". Of course, these are not indicative of the general public but it does hint at the very conservative sentiment that liberals play fast and loose with government money. However, I believe that this bill would be extremely beneficial. It does not absolve people of paying back their loans, but does make the burden significantly lighter for low income families and students. Also, it provides measures for public servants to avoid being completely bogged down by debt. It's entirely obvious, in my opinion, that the state of student loans is completely out of hand and they are injurious to Americans continuing their education. If we want a well-educated, college-attending population then we have an obligation to decrease the financial burden on students. This bill could help a bit if it is passed, however I see it as highly unlikely that it will do so. Hopefully, if it is passed, it lightens the load of a few students enough for them to effectively and happily pursue higher education.

http://wtnh.com/2016/01/21/blumenthal-backs-bill-to-ease-student-loan-debt/

Anonymous said...

As Kyle, Caitlyn B and maybesarah stated in their responses, the bill will be extremely difficult to pass considering the majority of Congress is Republican. Therefore, it angers me to say that it does not have a ghost of a chance to be passed. But its implementation would definitely be beneficial for thousands of students and families seeking for money to pay for a college degree. Furthermore, along with recent research finding that student loan defaults are heavily concentrated among the most economically marginalized students, new data suggests that debt is a major financial obstacle for people who already face barriers to opportunity. As a senior in high school going through the college process, money is a large factor when determining which college to attend. Many high school seniors decide to attend lower ranked schools where they have received money rather than a higher ranked school because their family cannot afford the tuition. I strongly believe that the high cost for college education throughout the United States is a major problem. There are thousands of kids who study hard but do not have the opportunity to attend a university because of money.

http://www.nytimes.com/2015/10/08/upshot/student-debt-is-worse-than-you-think.html?_r=0