Tax Deductible College Education?

Posted by
Naomi Rockler-Gladen
Apr 21, 2008

Should a college education be tax deductible?

U.S. presidential candidates Barack Obama and Hillary Clinton both think so-- or, at least, they think that a significant portion of a college education should be tax deducatable. Both have included proposals in their campaigns to achieve this. Obama's plan is more generous than Clinton's, but the two plans are very similar.

Obama proposes to make the first $4000 of a college education fully tax deductible. By fully, this means that a student's parents (or the student, if he or she is not a dependent) will receive $4000 back from the government to pay for college expenses. Obama wants this tax break to be annual-- that is, $4000 a year for as long as a student is in college. He also proposes that this money be based on last year's tax returns so that the money will be available when tuition is due in the fall.

Clinton proposes that the first $3500 of college expenses be partially tax deductible. She wants the first $1000 to be fully deductible, and then the second $5000 to be 50% deductible. Clinton also favors that the funding be available at the beginning of the school year to pay for tuition costs.

Is this financially feasible? With the rising cost of tuition, I sure hope so! Ideally, the money spent by the government would be compensated in the long run, because college graduates make more money and pay more in taxes over a lifetime. In addition, the government could theoretically save money because they would not have to manage so many student loans.