Beall Proposes College Tax Credit for Working Families

January 04, 2012

SACRAMENTO -- Legislation to give middle-class families a $2,000 tax credit for college-related expenses per student was introduced today by Assembly Member Jim Beall, D-San Jose.

"Assembly Bill 1441 will help working families who were hit hard by the recession," Beall said. "We all know how much tuition has risen in recent years. It's time we do something for the middle class. They are being denied the dream of providing their children with a college education. A recent University of California report pointed out the number of middle-class income students has actually declined. This is a disturbing fact."

"Under this bill, a family with two children enrolled in either the UC or California State University systems could get a tax break of $1,000 when they file their taxes for the year. It won't cover their entire costs but it's a positive step in the right direction to put more cash in the pockets of the working middle class."

Specifically, AB 1441 would:

  • Allow a credit not to exceed $500 per eligible student for each taxable year for college-related expenses. The aggregate per eligible student is limited to $2,000.
  • Defines college-related expenses as tuition, fees, books, supplies and equipment required for course study.
  • Families or earners with a modified adjusted gross income of $80,001 to $140,000 qualify for the credit.

Currently, students who come from families making $80,000 or less are eligible for state, federal, and institutional financial aid to attend California's public universities.

Last month, UC-Berkeley, recognizing the economic pressure middle class families and students face, announced it would limit its costs at 15 percent of the household income for families making $80,000 to $140,000.

The University of California Annual Accountability Report 2011 found, "UC tuition and fees have increased 32 percent in inflation-adjusted dollars during the past decade. At the same time, the proportion of students from low- and high-income families has grown, while the proportion of middle-income families has declined."

"It's laudable that our higher education system is removing financial barriers to help students from low-income families achieve their dreams of college," Beall said. "But I think our middle-class families need help, too, and that's why I'm moving AB 1441. I stand with the thousands of California parents and their children who know a college education is their ticket to prosperity but it's now out of reach."

Contact: Rodney Foo (408) 282-8920