Ticket To Success
A New $5,000 Tax Credit To Help More Minnesotans Go To College
Minnesota’s middle-class families dream of more than economic security. They want success – the ability to give their kids a better life.
But more and more, that better life requires a ticket for admittance in the form of a college diploma. The average salary of a college graduate is over $50,000 per year – while the average yearly salary of someone who only graduated from high school is barely half that ($27,400).
Meanwhile, that ticket has become more and more expensive. It’s not that parents have forgotten how important it is to make planning for college part of their budget – it’s that the cost of college has skyrocketed. Over the past ten years, the cost of attending a public university has increased by 80% nationwide. And now the average cost of one year of tuition, room and board, books, and fees at a public university is nearly $13,000.
Meanwhile, graduates are entering the workforce with a crushing burden of student debt. Nationwide, those who borrow are carrying an average of nearly $20,000 in debt – more than double the average debt of 15 years ago.
Here in Minnesota, the problem is even worse:
- The Pioneer Press reported this year that “the net cost of a public college education in Minnesota is nearly twice the national average.”
- Tuition at the University of Minnesota has nearly doubled since 2000.
- Students at Minnesota’s world-class private institutions are facing an average cost of over $36,000 per year to attend Carleton, St. Olaf, or Macalester – and that’s before room and board.
- Minnesota has the nation’s third-highest percentage of college graduates carrying debt (nearly 80%) – and the average debt they carry is the nation’s fifth-highest, jumping by over $6,000 in Norm Coleman’s first three years in office.
The average family is able to save around $10,000 for college – a lot of money, but not nearly enough to send a child (let alone multiple children) to school.
Al Franken proposes a new tax credit for families earning up to $200,000 per year. This new tax credit will provide up to $5,000 per student per year for up to four years of post-secondary education.
The Ticket To Success Tax Credit
Generous. The Ticket To Success credit will be equal to 50% of the first $10,000 in eligible expenses (tuition, books, and fees) for each student in a family. And it applies to families earning up to $200,000 per year – including many two-income middle-class households currently left out of existing tax credits. It will work for up to 10 million middle-class students.
Flexible. The Ticket To Success credit is available to the taxpayer, a spouse, or a dependent. It works for any post-secondary education: public, private, community college, etc. And it can be used for up to four years for each student.
Simple. The Ticket To Success credit simplifies the tax code. Currently, taxpayers must choose from among a number of smaller, complicated education tax credits. The Hope Credit is capped at $1,650 per student, only works for undergraduate education, and can only be used for two years. The Lifetime Learning Credit is capped at $2,000 per return, offering little help to families with multiple students. (And neither applies to families earning over $114,000 per year.)
Paid for. The Ticket To Success credit will replace these smaller, complicated credits. The net cost will be $48 billion over five years. Simply allowing tax breaks for those earning more than $1 million per year to expire will generate $319 billion over five years.