MONEY Matters
Volume 2, Number 1
January 2004

RELATED ARTICLE NIH loan repayment help

Possible student tax break introduced in Congress
The Higher Education Affordability and Equity Act would allow tax-free treatment of all scholarships, including room and board.

In November, Rep. Phil English (R-PA) introduced student-friendly legislation that he says will reduce the tax burden associated with saving and paying for graduate school. The bill, titled the Higher Education Affordability and Equity Act, would allow tax-free treatment of all scholarships, including room and board — which is currently taxed.

Essentially, the bill would amend the Internal Revenue Code of 1986, which excludes only tuition, required fees, books and supplies from taxation. Amounts used for living expenses, including room and board, are currently not excluded from income and therefore are subject to tax.

English's proposal would also allow taxpayers making less than $100,000 to deduct the full amount of their student loan interest and would make amounts received from the National Health Service Corps Scholarship Program and Armed Forces Scholarship Program tax-free.

The American Council on Education, the National Association of American Universities and other higher education organizations support the bill. The issue has been at the forefront of advocacy efforts by groups such as the Coalition for an Affordable and Accessible Graduate Education, the National Association of Graduate-Professional Students and the Council of Graduate Schools for several years. APA is monitoring the issue. Interested students should write to their congressional representatives in support of the bill.

—J. DAW HOLLOWAY

To learn more, go to www.house.gov/apps/list/press/pa03_english/education.html

Also in Money Matters…
2003 APF/COGDOP student prize winners
Funding opportunities
Learn about cutting-edge research and network at psychology's regional meetings

top