U.S. Markets closed

National Scholarship Providers Call on Congress to Stop Taxing Student Scholarships

Scholarship Providers and Impacted Students Demand Action; Urge Others to Call Their Senators and Representatives

MINNEAPOLIS, Oct. 1, 2019 /PRNewswire/ -- Scholarship providers, gathered from across the country, today demanded that Congress stop taxing student scholarships. During its national conference in Minneapolis, the National Scholarship Providers Association (NSPA) joined with Scholarship America ®  and other member organizations to call on Congress to change the law.

"We believe this is an issue of basic fairness, to students and their families, who are already overburdened by the dramatically rising cost of higher education," said Jackie Bright, executive director, National Scholarship Providers Association. "Our tax code should not prevent the private sector from assisting students, and it should not burden students who have worked hard to earn their scholarships and grants. We urge our members, scholarship recipients and their families, and anyone who wants to support college students to contact their congressional representatives and tell them to remove this unfair tax burden."

Taxing scholarships began in the 1980s when the cost of higher education was dramatically lower than it is today. The 2017 Tax Cuts and Jobs Act increased the tax rate of scholarships that are used to pay for room, board and other college living expenses. These are the same tax rates as trusts and estates, which are much higher—up to 37 percent—than students pay on other income. Students need every dollar to count toward their education and cannot afford to pay taxes on the scholarships they have worked hard to earn.

For many students those living expenses are more than half the cost of their education. The students hit hardest are those from middle and low-income families who are already struggling to pay those bills. Yet, when schools and scholarship providers assist with those college expenses, taxes take away much of that aid.

"This tax will come as a surprise to students who are already barely able to cover their expenses," said Oballa Oballa, president of LeadMN, which represents Minnesota's 180,000 two-year college students. "Many may have to drop out of school in order to pay their taxes. That should not happen to anyone."

According to Robert C. Ballard, president & CEO, Scholarship America, this puts an unacceptable burden on students.

"The U.S. tax code does not tax beneficiaries of charitable contributions—except when it comes to scholarships," explained Ballard. "Taxing scholarships means that money is being sucked out of higher education at a time when tuition and student debt are rapidly climbing. It only adds to the crushing financial burden many students face. Our tax system is harming college students and potentially preventing them from being successful."

According to the most recent IRS data, the federal government collected $886 million from more than 188,000 tax returns, from taxing scholarships. That was in 2016, before the recent tax changes, which are projected to take a much bigger bite out of student's income.

The NSPA and Scholarship America have created a resource center for students, families and others who want to get involved in the call to end scholarship taxation. It provides tips and tools for reaching out to lawmakers.

A press kit on this issue, including downloadable still images and video from this news conference, is also available.

The resource center can be found at: https://www.scholarshipproviders.org/page/advocacyaction.

About the National Scholarship Providers Association
The National Scholarship Providers Association (NSPA) is the leading professional association dedicated to supporting the needs of scholarship providers in colleges and universities, non-profits, foundations and businesses. NSPA provides networking opportunities, professional development and scholarship program resources all with a goal of advancing the collective impact of scholarship providers and the scholarships they award. Membership represents over 1,600 individuals from over 500 organizations across the U.S., Canada and abroad. For more information, visit www.scholarshipproviders.org.

About Scholarship America
Scholarship America is a non-profit organization that helps students fulfill their college dreams. Scholarship America is the largest private scholarship provider in the U.S., and has distributed $4.2 billion to more than 2.5 million students. The organization works with partners to lower barriers to a college education and give students the support needed to succeed. Learn more at scholarshipamerica.org.

 

Media Contacts:



Joan Cronson, Events & Public Relations Manager    


Nick Safko, Communications Coordinator

Scholarship America®          


National Scholarship Providers Association

952-830-7308 (d)     


303-442-2524 x300

224034@email4pr.com


224034@email4pr.com

 

Cision

View original content to download multimedia:http://www.prnewswire.com/news-releases/national-scholarship-providers-call-on-congress-to-stop-taxing-student-scholarships-300929008.html

SOURCE Scholarship America