Education is an asset that benefits not only the educated individual, but also his or her family and community. Skills and knowledge are central determinants of earning capacity as well as important drivers of the economy. Education also promotes civic responsibility, advances economic competitiveness and expands economic opportunity.
Federal Policy Priorities
The credit proposes to temporarily replace the Hope Credit. The American Opportunity Tax Credit, authorized in the American Economic Recovery and Reinvestment Act, increases the Hope Credit to $2,500 for eligible college costs. The Act also makes the credit partially refundable (40%), offering a maximum amount of $1,000. The refundable provision enables individuals with no tax liability to receive the benefit as a tax refund. Tax credit will be available during the 2010 and 2011 tax seasons. CFED supports making these temporary changes permanent.
The Pell Grant Program is a need-based program provided to low-income undergraduate students to promote access to finance college. The American Economic Recovery and Reinvestment Act increases the maximum Pell Grant that may be awarded to a low-income undergraduate student to $5,350 in 2009 and $5,500 in 2010 from the previous level of $4,731 for the 2008-2009 school year.
Because Pell Grant amounts are appropriated and have not been increased 14 times since 1973, the President proposed in his FY 2010 budget to index Pell grants to the Consumer Price Index plus 1 percent in order to account for inflation and help put the program back on track. Additionally, the President has proposed to make the Pell Grant program mandatory in an effort to provide a regular stream of funding for the program and discontinue the practice of “backfilling” billions of dollars in Pell Grant shortfalls each year. CFED supports the increase and supports the proposed improvements to the Pell Grant program in the President’s budget
CFED advocates in coalition for the following federal policy goals:
• Adequately fund pre-kindergarten through 12th grade programs, including Head Start Program and the No Child Left Behind Act
• Appropriate adequate funds for the Workforce Investment Act and oppose block granting of funds
• Require elementary and secondary schools to include financial education in curriculum to provide a foundation for financial literacy
• Appropriate adequate funds for the Car. D. Perkins Vocation and Technical Education Act.
State Policy Priorities
Financial capability – the ability to make informed judgments and effective decisions about money management – can be as important a determinant of an individual’s long-term financial security as his or her income, health and education. States should ensure that students receive quality instruction in key personal financial concepts. Among other policy measures, states can mandate that students complete a course in personal finance as a condition of graduation; develop content standards for personal finance curricula; and require testing in key personal finance topics.
For more information, click here: Financial Education in Schools. Download the Financial Education in Schools Policy Brief here.
Post-secondary education is one of the best investments an individual can make in his or her economic future. Yet escalating costs discourage many from pursing higher education. One way to make the cost of post-secondary education more affordable and increase participation by lower-income individuals is to create incentives for families to save for college. States should create programs to incentivize deposits into 529 college savings accounts.
For more information, click here: College Savings Incentives. Download the College Savings Incentives Policy Brief here.
Despite decades of education reforms, inequity persists in education spending and the availability of qualified teachers. Children from disadvantaged backgrounds frequently begin schooling behind their peers. Yet, schools with the highest concentration of students in poverty receive less funding than schools with lower concentrations. Instead of relying on property taxes as the main source of funding, which can disadvantage high-poverty districts, states should defer to statewide sources. States should also specifically target funding to these districts while creating and enforcing equity standards in all districts. States also have enormous authority over ensuring that students are taught by qualified teachers, and can set requirements to help improve the quality of the teaching force across the state. States should implement policies to ensure that teachers are prepared and licensed, that they are evaluated regularly, and that ineffective teachers are weeded out of the system.
For more information, click here: Access to Quality K-12 Education. Download the Access to Quality K-12 Education Policy Brief here.