Higher education is a gateway to the middle class: in 2007, the average high school graduate earned only $31,000 a year while the average college graduate earned $57,181. Yet, college has become increasingly expensive: tuition and fees at the average public four-year university have increased 88% since the 2000-2001 school year and two out of three college students begin their careers with student loan debt. Current tax credits and deductions for higher education expenses are confusing and underutilized. The College Learning Access Simplicity and Savings Act replaces the nonrefundable Hope Scholarship Credit, which provides $1,800 for higher education expenses to individuals with incomes below $58,000, with the College Affordability Credit and repeals the $4,000 tax deduction currently available for tuition and related expenses. A taxpayer may not utilize both a Hope credit and the tuition deduction for the same student in the same year. The College Affordability Credit would provide a maximum $3,000 tax credit each year. 50% of the credit is refundable, meaning that households with no tax liability are eligible to receive a partial tax refund. The credit phases out at $75,000 for individuals and $150,000 for joint filers.

The American Opportunity Tax Credit Act (H.R.106) creates a more generous tax credit, but requires completion of volunteer service for eligibility.