Crs Report for Congress: Higher Education Tax Credits

ISBN-10: 1293024244
ISBN-13: 9781293024249
Series: Crs Report for Congress
Pages: 34
Language: English
Published: 2013-10
Publisher: BiblioGov
Authors: Congressional Research Service: The Libr, Pamela J. Jackson

Description

Education tax credits were introduced as a new subsidy for higher education in 1997 and have cost, on average, $4.6 billion a year in lost tax revenue since their enactment. The introduction of the Hope Credit and the Lifetime Learning Credit marked a dramatic increase in education spending through tax expenditures. Prior to 1997, tax incentives for higher education expenses totaled less than $2 billion in estimated lost revenue. The education tax credit program expanded the number of federal agencies involved in education policy making and increased the complexity and cost of administering the income tax system. This report provides analysis of the education tax credit program in the context of issues facing Congress in regard to higher education. This report begins with a review of the economic rationale for subsidizing education, then describes federal subsidies for education in general and the education tax credits in particular. An analysis of the education credits follows and the report concludes with a discussion of education tax credit policy options. Economists believe that education causes positive externalities since it generates both private benefits for individuals and social benefits for the public at large. Such social benefits may be of better citizenship, higher degrees ...