On June 25, the House Ways and Means Committee approved the Student and Family Tax Simplification Act (H.R. 3393), a bill that would consolidate several existing higher education tax credits and deductions into an improved American Opportunity Tax Credit. AACC was strongly supportive of the bill as introduced, as it better aims the benefits of higher education tax credits to low-income students attending lower-cost institutions.
In an unusual twist, the bill was approved on a party-line vote, with all present Republicans voting for it, and all Democrats voting against, including the bill's Democratic sponsor, Rep. Danny Davis. The committee democrats used the occasion to bash their Republican colleagues for this and other tax bills recently approved by the committee that are estimated to add $825 billion to the federal debt over the next 10 years. H.R. 3393, as introduced, lowered the income caps under which people could claim the AOTC, but the committee chair's amendment restored those caps to current law. This change significantly impacted the projected cost of the bill, from approximately $30 billion over ten years to more than $90 billion.