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Davis, California

Saturday, April 13, 2024

Tax credits may relieve impact of fees for middle class

Although the fee hikes will be difficult for most middle class families, the University of California claims that new tax credits and financial aid will help these families.

“The university recognizes that fee increases for students are painful, and is taking steps to minimize the impact on students and families,” according to a press release from UC President Mark Yudof’s office.

Parents can now claim a new education tax credit called the American Opportunity Tax Credit (AOC). The maximum credit is $2,500 per student, upped from the Hope tax credit’s $1,800.

The income ceiling was raised from $116,000 to $180,000, meaning households earning less than $180,000 can claim the AOC. The credit can also be claimed for the first four years of college instead just the first two.

Hope and lifetime learning credits can also be claimed for families who make less than $120,000.

However, families will still have to find the money to pay for the increased fees before they can get money back on their tax returns.

Other than the changes to federal tax credits, UC is expanding the Blue and Gold Opportunity Plan to include families who make up to $70,000. UC also claims that increases in Cal Grants and other financial aid will cover the entirety of the tuition increase for nearly three-fourths of households earning less than $180,000.

“UC has a fundamental responsibility to be financially accessible to all students admitted within the framework of California’s Master Plan for Higher Education, regardless of their financial resources,” UC officials said. “This responsibility is implicit in the Master Plan itself and forms the basis of the university’s undergraduate financial aid policy.”

First year Nicole Lesnett is from a middle class family and is worried about where she’ll find the money to make up for the 32 percent fee increase.

“My family expects me to get a job as soon as possible. I’ll definitely be looking next quarter,” she said.

Lesnett received a Cal Grant of $500, but with a brother also enrolled at a UC, money will still be tight. She was unaware of the tax credits available and expressed hope.

“Anything helps, but I think we’ll have to wait and see,” she said.

Other students are less optimistic.

Junior Leslie Flores comes from a household with five siblings that makes just over $70,000. Therefore do not qualify for the Blue and Gold plan. But with five siblings, paying for the extra fee increases will be impossible, she said.

“Two quarters before I graduate, and I’m not going to be able to get a degree,” Flores said in a testimonial at the Chancellor’s meeting Monday night.

Karinna Hurley, vice chair of the Graduate Student Association, believes that the fee hikes for undergraduates will have a negative effect on the quality of education in the UC system.

“As the university shifts its focus on the restructuring on the funding of student fees, less qualified undergrads are going to come up through the pipeline,” she said.

JANELLE BITKER can be reached at campus@theaggie.org.


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