- Several facets of President Barack Obama’s tax-reform proposal would affect higher education, according to an analysis by the Chronicle of Higher Education.
- Obama’s free community college plan would be funded by increasing the top capital gains and dividends tax rates, closing a loophole regarding trust funds, and charging financial firms that borrow heavily.
- Obama proposes combining and streamlining tax credits, deductions, and reduced-tax savings plans.
Obama's plan won’t have a chance at passing the Republican-controlled Congress, but it will help set the agenda for Democrats. Also under the tax-reform plan, the New American Opportunity Tax Credit would be made permanent, starting at $2,500 per year and then adjusted for inflation; Pell Grants would be exempt from taxation; and forgiven student debt wouldn’t be treated as taxable income. Obama is expected to talk about his tax reform plan during his State of the Union speech Tuesday night.