While the
federal tax code is no substitute for federal student aid programs or financial
aid provided by colleges and universities, it has played an increasingly
significant role over the past two decades in helping low- and middle-income
students and families finance higher education. There are multiple ways
the tax code could be updated to better support students, most notably by repealing
the taxability of Pell Grants and modernizing key higher education tax credits.
The tax code
also contains a number of provisions that help support higher education
institutions in their educational and research missions. Finally, there are tax
provisions that apply to colleges and universities as tax-exempt entities. The
American Council on Education focuses its advocacy on legislative and
regulatory efforts concerning this array of tax provisions important to
students, families, and institutions of higher education.