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Congressional Panel Votes To Repeal Drug Conviction Penalty Blocking Education Tax Credit

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A key House committee on Wednesday approved a budget reconciliation bill that contains a provision to lift a ban that prevent people with certain drug convictions from utilizing an education-related tax credit.

The House Ways and Means Committee agreed to drop the restriction, which currently precludes those with felony drug convictions at the state or federal level from claiming the American Opportunity Tax Credit. That tax benefit can be claimed for expenses paid for tuition, fees and course materials for higher education.

Rep. Danny Davis (D-IL) has been pushing to end the punitive provision of the tax legislation, which was first enacted in 2009. Sen. Chris Van Hollen (D-MD) is also championing the reform in his chamber.

“The current law banning individuals with felony drug convictions from ever receiving a key tax credit toward enrolling in college violates the principle of giving people a second chance after they have served their time. That needs to change,” Van Hollen said in a Facebook post celebrating the House panel’s move. “We must provide students with every opportunity to succeed in achieving a higher education and pursuing a better lifeโ€”this is one way we can do that.”

 

The current statute stipulates that the American Opportunity Tax Credit “shall not be allowed for qualified tuition and related expenses for the enrollment or attendance of a student for any academic period if such student has been convicted of a Federal or State felony offense consisting of the possession or distribution of a controlled substance before the end of the taxable year with or within which such period ends.”

Van Hollen said scrapping the penalty will help people “obtain a post-secondary education and ultimately contribute to our workforce and economy.”

Advocates agree, arguing that the policy unfairly imposes an extra burden on students caught up in the drug war and counterintuitively discourages them from seeking to improve their lives through higher education.

In a similar vein, bipartisan spending legislation that was enacted late last year makes it so college students will no longer be disqualified from receiving federal financial aid, including loans and grants, over drug convictions.

The measure eliminates a question on the Free Application for Federal Student Aid (FAFSA) that prompted students to disclose prior drug offenses. Activists have strongly pushed for an end to the Aid Elimination Penalty, which was imposed as part of a 1998 amendment to the Higher Education Act and has since rendered hundreds of thousands of students ineligible for college assistance due to convictions for marijuana or other drugs.

While the penalty had been scaled back from its original form in 2006 to take away a reachback effect that punished students for past offenses and has since only applied to those convicted while receiving aid, advocates say the remaining FAFSA question was unclear and has deterred countless eligible students from even applying.

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Photo courtesy of Chris Wallis // Side Pocket Images.

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