Legislation Aims to Ease Financial Barriers for Low-Income Students

Late last month, U.S. Representative Mark DeSaulnier (D-CA) introduced legislation that aims to protect low-income students from being taxed on using their Pell grants for non-tuition purposes. The Pell Grant Flexibility Act (H.R. 3581) would eliminate the tax liability of Pell Grants on goods and services that will further students' education.

Federal Pell grants can be used to cover both tuition and non-tuition expenses. However, under current law, Pell grants used for strictly tuition expenses are not taxed while funds used for non-tuition expenses—such as housing, books, transportation, and school supplies—are subject to taxation.

"Outside of the obvious cost of tuition, the price of attending college includes housing, transportation to campus, having supplies like textbooks and notebooks as well as other items such as stable childcare. In order to give our students the best shot at success, this bill makes Pell grants more flexible so students can focus more on their learning than on their wallets," Congressman DeSaulnier said in a press release.

The legislation is cosponsored by Reps. Lee Zeldin (R-NY), Thomas MacArthur (R-NJ), and Peter King (R-NY). AACRAO is listed in support of the bill.


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