November 17, 2022

Van Hollen, Portman, Davis, Schweikert Introduce Legislation to Fix American Opportunity Tax Credit Inequity

Today, U.S. Senators Chris Van Hollen (D-Md.) and Rob Portman (R-Ohio) and Representatives Danny K. Davis (D-Ill.) and David Schweikert (R-Ariz.) reintroduced their bipartisan, bicameral legislation to address systematic injustices within the American Opportunity Tax Credit (AOTC). The AOTC is the primary tax credit available to students seeking a higher education; however, students with a prior felony drug conviction are permanently ineligible from using the credit. This backwards requirement makes it more difficult to ensure successful reentry for those who have served their time by limiting their ability to advance their education and pursue a career. The Members’ Eliminating Discrimination and Creating Corridors to Expand Student Success Act (ED ACCESS Act), originally introduced in 2019, would address this inequity by repealing the lifetime ban. Senators Van Hollen and Portman were joined in introducing this legislation in the Senate by Senators Ron Wyden (D-Ore.) and Jeff Merkley (D-Ore.). In the House of Representatives, Reps. Davis and Schweikert were joined in introducing this legislation by Reps. Steven Horsford (D-Nev.), Brad Wenstrup (R-Ohio), and Terri Sewell (D-Ala.).

“The American Opportunity Tax Credit has helped millions of students access higher education. But for individuals previously convicted of a drug felony – who have served their time and are working to get back on track – it isn’t an option. That denial blocks many individuals from getting a second chance to embark on a positive path forward. Our ED ACCESS Act would right this wrong and provide these students with crucial support to obtain a post-secondary education,” said Senator Van Hollen.

“While we have come a long way over the last decade in implementing meaningful criminal justice reform, there is still more work to do,” said Senator Portman. “That’s why I’m proud to sponsor this legislation to reform a decades-old provision of the tax code that discriminates against convicted drug felons and will allow more Americans to use the American Opportunity Tax Credit to pursue an undergraduate education. The mistakes of your past shouldn’t define your future, and this bill will help more individuals returning from correctional institutions get a second chance and achieve their God-given potential.”

“Everyone deserves the opportunity to pursue a higher education, and the American Opportunity Tax Credit is an excellent channel to making that happen,” said Senator Merkley. “Even after serving their sentences though, countless Americans face hurdle after hurdle when it comes to reentering society—including being permanently ineligible for this tax credit, severely impacting their educations and futures. The ED ACCESS Act is an important step forward in clearing this obstacle, by putting the American Opportunity Tax Credit in reach so these Americans can receive an education and put themselves on a path to a better life—benefiting them, their families, and all of our communities.”

“A fair tax code means providing Americans who have served their time a chance to pursue higher education and a promising career path,” said Senator Wyden. “The bipartisan ED ACCESS Act of 2022 will repeal the prohibition on students with prior felony drug convictions from being eligible for the American Opportunity Tax Credit—bringing the tax credit in line with other assistance programs for higher education. This is a commonsense solution and I’m all in to get it over the finish line.”

“Encouraging education for people with records is a smart, cost-effective investment of taxpayer dollars,” said Rep. Davis. “This bipartisan bill would promote education, successful reentry, economic well-being, and labor force participation – which is why dozens of conservative and progressive organizations strongly support this bill.”

“This bipartisan, bicameral legislation benefits students and ensures our tax code treats all taxpayers fairly. This is a much-needed reform to provide opportunities for individuals seeking higher education. I am proud to introduce the American Opportunity Tax Credit alongside my colleagues and help pave a brighter future for all Americans,” said Rep. Schweikert.  

“I am proud to join my colleagues in reintroducing the ED ACCESS Act. This legislation fixes a serious inequity in a program intended to help people pursue higher education. Formerly incarcerated people who want to improve their employment and career prospects are currently shut out from this tax credit for life. If we truly want to give people the tools to succeed in life, we cannot allow barriers like these to stand,” said Rep. Horsford. 

“Currently, some Americans who exit our criminal justice system and seek to improve their lives by pursuing a higher education are unable to access the American Opportunity Tax Credit. I’m pleased to work with my colleagues on this bipartisan, bicameral legislation, which will remove that hurdle so these individuals can alter their course and pursue a better future,” said Rep. Wenstrup. 

This legislation is supported by a broad and diverse group of organizations, including: Americans for Prosperity, Center for Law and Social Policy (CLASP), Citizens United for Rehabilitation of Errants (CURE), College & Community Fellowship, Due Process Institute, Drug Policy Alliance, Education Trust, Health in Justice Action Lab at Northeastern University School of Law, Justice Roundtable, Legal Action Center, National Association of Criminal Defense Lawyers, National Association of Social Workers, National HIRE Network, Prison Fellowship, R Street Institute, Safer Foundation, and Young Invincibles.

The text of the legislation can be found here. A fact sheet on the bill can be found here