The use of federal college tuition tax credits at public community colleges: A capacity-building policy analysis

This study examined the use of college tuition tax credits at public community colleges. For nearly three decades, the U.S. Congress has provided federal student aid programs to assist students in paying for college costs. During this same time, tax credits were debated by Congress as an alternative to the federal aid programs. In 1997, President Bill Clinton signed into law the Taxpayer Relief Act of 1997, authorizing the federal HOPE Scholarship (HOPE) and the Lifetime Learning Tax Credit (LLTC). The HOPE and LLTC provisions were structured to pay for the cost of a “typical community college” (Clinton, 1997). These two new “non-refundable” tax credits exist today alongside the federal student aid programs. The projected cost of these tax credits through 2002 is ;Since the HOPE and LLTC were enacted, several projections indicate that the primary beneficiaries are individuals with adjusted gross incomes between ;The purpose of this study was to describe the use of the federal HOPE and LLTC of students (or their families) attending public community colleges in 1998 through the use of a capacity-building policy model. The research design was secondary data analysis, which collected tax and financial aid data using the Federal Quality Assurance Program. The research questions identified for this study examined the use (tax credit claimants versus non-claimants) of the tax credits at four public community colleges nationwide. Some of the variables examined include: adjusted gross income, taxes paid, Pell Grant award, paid-preparer stamp, computer-prepared taxes, amount of earned income tax credit, etc. Also, using these variables, multiple regression analysis was performed to determine if relationships exist between the tax credits and independent variables indicated above. In addition, to understand the use of college tax credits, an extensive historical literature review was conducted to determine the main elements that impacted the development of the policy over thirty-two years.