WASHINGTON, April 16, 2012 /PRNewswire-USNewswire/ -- Legislation introduced today by Congressman Chaka Fattah (D-PA) and Senator Christopher Coons (D-Delaware) is designed to stimulate private investment in scholarship funding trusts which will provide financial resources and opportunity for generations of American students who otherwise wouldn't be able to afford a college education.
H.R. 4349, the Communities Committed to College Tax Credit Act, gives a 50% tax credit for contributions to qualifying scholarship funding trusts registered with the Secretary of Treasury. Eligibility for the tax credit requires the trust be classified as a 501(c)(3) non-profit organization and be in partnership with the local school district. Income from these trusts may be used only to provide college scholarships to students who have demonstrated financial need.
Fattah, architect of GEAR UP - the country's most successful early college readiness and access program - said, "The CORE Scholarship Trust, Kalamazoo Promise and Pittsburgh Promise are prime examples of what can happen when individuals invest in students from their communities to provide needed resources for college."
Since 2004, the CORE Scholarship program has distributed over $28.5 million to more than 18,000 Philadelphia high school graduates to continue on to higher education. The Kalamazoo Promise in Michigan has spent more than $30 million on higher education for more than 2,300 students. Fattah said, "By promising to provide funds upon high school graduation, these programs are developing college-going cultures that nurture students whose college days are still years away."
Fattah said he hopes the legislation will encourage communities across the country to follow these models and establish trusts for the nation's most underserved young people. He said, "We are providing an avenue for directing local dollars toward the education of local students and that's a win-win for all involved."
Senator Christopher Coons (D-Delaware) will introduce the Senate companion bill on Tuesday. He said, "We have to think outside the box and find new ways to help our student's access and afford the education and training they need after high school to succeed in today's global economy," Senator Coons said. "As Tax Day approaches, Americans across the country are receiving well-deserved tax credits for supporting all kinds of charitable causes. It has been a pleasure working with Congressman Fattah to develop new tax credits that will spark private investment in higher education scholarships."
The funding trusts established in conjunction with this legislation, Fattah said, "Will outlast individual champions or Congressional action." Under the plan the lawmaker expects that millions will be donated to the trusts over the years, generating income for scholarships while the principal will remain untouched. Fattah said, "Over time, the earnings will transform neighborhood kids into trust fund kids putting them on track for a lifetime of success."
Congressman Fattah is a senior member of the House Appropriations Committee and a longtime education advocate. He authored The American Opportunity Tax Credit which has earned some 13 million students and their families a tax incentive for college expenses. He is the architect of the college awareness and access program GEAR UP, Gaining Early Awareness and Readiness for Undergraduate Programs, which has assisted more than 12 million students from sixth to 12th grade with $4 billion in federal funds to achieve their dream of a college education.
SOURCE Office of Congressman Chaka Fattah