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United States Government Accountability Office: 
GAO: 

Report to the Committee on Finance, U.S. Senate: 

May 2012: 

Higher Education: 

Improved Tax Information Could Help Families Pay for College: 

GAO-12-560: 

GAO Highlights: 

Highlights of GAO-12-560, a report to the Committee on Finance, U.S. 
Senate. 

Why GAO Did This Study: 

The federal government provides billions of dollars in assistance each 
year to students and families through federal student aid programs 
authorized under Title IV of the Higher Education Act of 1965 and 
through tax expenditures, such as credits and deductions. GAO was 
asked to (1) describe the size and distribution of Title IV student 
aid and tax expenditures available to assist students and families 
with higher education expenses; (2) assess the extent to which tax 
filers select higher education provisions that maximize their tax 
benefit; (3) summarize what is known about the effect of student aid 
and tax expenditures on student outcomes; and (4) describe factors 
that contribute to the effectiveness and efficiency of federal student 
assistance programs. GAO analyzed data from Education, IRS, and the 
Board of Governors of the Federal Reserve, and conducted a literature 
review for original empirical research. GAO also developed a framework 
for evaluating federal assistance and validated it with recognized 
experts of higher education finance. 

What GAO Found: 

Multiple Title IV programs and tax expenditures provided substantial 
aid to populations across income levels. In 2009, 12.8 million 
students received Title IV aid, and approximately 18-million tax 
filers claimed a higher education tax benefit for current expenses. 
Recent increases in both programs from 2008 to 2009 may be because of 
enrollment increases and legislative actions, among other factors. 
Title IV grants tend to benefit students and families with incomes 
below the national median (about $52,000 from 2006–2010), while loans 
and work-study serve these students and those with family incomes 
above the median. Most tax benefits from the tuition and fees 
deduction and the parental exemption for dependent students went to 
households with incomes above $60,000, whereas the majority of 
benefits from the other higher education tax expenditures in GAO’s 
review—-such as the American opportunity credit-—went to households 
with lower incomes. 

Tax filers do not always select tax expenditures that maximize their 
potential tax benefits, possibly because filers are unaware of their 
eligibility for the tax credit or deduction or are confused about 
their use. GAO analyzed 2009 IRS data for returns with information on 
education expenses and found about 14 percent of filers (1.5 million 
of almost 11-million eligible returns) failed to claim a credit or 
deduction for which they appear eligible. On average, these filers 
lost a tax benefit of $466. The Internal Revenue Service (IRS) and 
Department of Education (Education) have taken steps to provide 
information on these provisions, but the number of filers failing to 
claim a higher education tax provision suggests more could be done. 
Developing a coordinated, comprehensive strategy to better inform 
eligible students could improve take-up of these tax provisions. 

Despite efforts by Education, research on the effects of federal 
assistance for higher education on student outcomes-—such as the 
likelihood students will continue their education-—remains limited. 
Researchers have examined the effects of federal assistance on a 
limited basis, such as only for certain states or groups of students, 
but these studies provide an incomplete view of the effects of federal 
assistance. Continuing gaps in research on the effectiveness of 
federal assistance may be due, in part, to data and methodological 
challenges that have proved difficult to overcome. Recent changes in 
Title IV aid and tax expenditures—-such as the introduction of the 
American opportunity credit in 2009-—may provide opportunities for 
evaluative research, but Education officials told GAO they have not 
conducted such research. In an environment of constrained budgets, 
evaluative research can help inform policy decisions. 

GAO identified factors that contribute to effective and efficient 
higher education assistance programs to help policymakers allocate 
limited resources among multiple programs. Factors include assessing 
whether a program achieves its goals and contributes to demonstrable 
results and whether it facilitates use by program beneficiaries. GAO 
developed a framework of questions that can be used as a policy tool 
for considering improvements to current programs or designing features 
of new programs. 

What GAO Recommends: 

GAO recommends (1) that IRS and Education work together to develop a 
strategy to improve information provided to tax filers who appear 
eligible to claim a tax provision but do not and (2) that Education 
sponsor and conduct evaluative research into the effects of Title IV 
programs and tax expenditures at improving student outcomes. Education 
and IRS agreed with GAO’s recommendations. Education noted that while 
it does not have access to tax data, it will work with IRS to assist 
in taxpayer outreach. 

View [hyperlink, http://www.gao.gov/products/GAO-12-560]. For more 
information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov or George A. Scott at (202) 512-7215 or scottg@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Multiple Title IV Programs and Tax Expenditures Provided Substantial 
Aid across Income Levels: 

Taxpayers Do Not Always Select Provisions That Maximize Potential Tax 
Benefits: 

Research on Effects of Federal Assistance for Higher Education Remains 
Limited: 

Factors That Contribute to the Effectiveness and Efficiency of Federal 
Higher Education Assistance Programs: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Descriptions of Title IV Programs and Higher Education-
Related Tax Expenditures: 

Appendix III: Text to Accompany Interactive Figures 1, 2, 6, 7, and 8: 

Appendix IV: Comments from the Department of Education: 

Appendix V: Comments from the Internal Revenue Service: 

Appendix VI: GAO Contacts and Staff Acknowledgments: 

Bibliography: 

Related GAO Products: 

Tables: 

Table 1: Estimated Suboptimal Choices on Federal Tax Returns Made by 
Taxpayers in 2009: 

Table 2: Research We Reviewed on the Effects of Federal Assistance Is 
Limited and Cannot Be Generalized: 

Table 3: GAO Framework for Evaluating Federal Higher Education 
Assistance Programs: 

Table 4: Percentage of Returns Included in GAO's Analysis of 
Taxpayers' Maximizing Their Benefits in Tax Year 2009: 

Table 5: Description of Federal Student Aid Programs Authorized under 
Title IV of the Higher Education Act: 

Table 6: Description of Selected Higher Education Tax Expenditures 
(Tax Year 2010): 

Table 7: Text to Accompany Interactive Figure 1: Illustration of 
Planning and Payment Processes for Higher Education Expenses: 

Table 8: Text to Accompany Interactive Figure 2: Size and 
Characteristics of Title IV Aid Programs and Higher Education Tax 
Expenditures: 

Table 9: Text to Accompany Interactive Figure 6: Number and Percentage 
of Title IV Aid Recipients and Dollars Received, by Income Category 
and Dependency Status, 2007-2008 (Information for Base Graphic): 

Table 10: Text to Accompany Interactive Figure 6: Number and 
Percentage of Title IV Aid Recipients and Dollars Received, by Income 
Category and Dependency Status, 2007-2008 (Information for Roll-over): 

Table 11: Text to Accompany Interactive Figure 7: Number and 
Percentage of Campus-Based Aid Recipients and Dollars Received, by 
Income Category and Dependency Status, 2007-2008 (Information for Base 
Graphic): 

Table 12: Text to Accompany Interactive Figure 7: Number and 
Percentage of Campus-Based Aid Recipients and Dollars Received, by 
Income Category and Dependency Status, 2007-2008 (Information for Roll-
over): 

Table 13: Text to Accompany Interactive Figure 8: Number and 
Percentage of Tax Filers Claiming Higher Education Tax Expenditures 
and Total Benefits, by Income Category, 2009 (Information for Base 
Graphic): 

Table 14: Text to Accompany Interactive Figure 8: Number and 
Percentage of Tax Filers Claiming Higher Education Tax Expenditures 
and Total Benefits, by Income Category, 2009 (Information for Roll-
over): 

Figures: 

Figure 1: Illustration of Planning and Payment Processes for Higher 
Education Expenses: 

Figure 2: Size and Characteristics of Title IV Aid Programs and Higher 
Education Tax Expenditures: 

Figure 3: Number of Recipients of Title IV Programs and Tax 
Expenditures Who Pay for Current Expenses, 2006-2009: 

Figure 4: Amount of Benefits from Selected Title IV Programs and Tax 
Expenditures That Pay for Current Expenses, 2006-2009: 

Figure 5: Tax Benefits Received by Tax Filers Claiming the Tuition 
Deduction, Hope Credit, LLC, and AOC, 2006-2009: 

Figure 6: Number and Percentage of Title IV Aid Recipients and Dollars 
Received, by Income Category and Dependency Status, 2007-2008: 

Figure 7: Number and Percentage of Campus-Based Aid Recipients and 
Dollars Received, by Income Category and Dependency Status, 2007-2008: 

Figure 8: Number and Percentage of Tax Filers Claiming Higher 
Education Tax Provisions and Total Benefits, by Income Category, 2009: 

Abbreviations: 

AOC: American opportunity credit: 

EFC: expected family contribution: 

EITC: Earned Income Tax Credit: 

ESA: education savings account: 

FAFSA: Free Application for Federal Student Aid: 

FSEOG: Federal Supplemental Educational Opportunity Grant: 

GAO: Government Accountability Office: 

GPRAMA: Government Performance and Results Act Modernization Act of 
2010: 

IES: Institute of Education Sciences: 

IRC: Internal Revenue Code: 

IRS: Internal Revenue Service: 

LLC: lifetime learning credit: 

NBER: National Bureau of Economic Research: 

NPSAS: National Postsecondary Student Aid Study: 

PLUS: Parent Loans for Undergraduate Students: 

QTP: qualified tuition program: 

SCF: Survey of Consumer Finances: 

SOI: Statistics of Income: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

May 18, 2012: 

The Honorable Max Baucus: 
Chairman: 
The Honorable Orrin Hatch: 
Ranking Member: 
Committee on Finance: 
United States Senate: 

The federal government provides billions of dollars in assistance each 
year to help millions of students and families meet the costs of 
higher education. This assistance is provided through federal student 
aid programs authorized under Title IV of the Higher Education Act of 
1965, as amended, (Title IV) and through tax expenditures--reductions 
in federal tax liabilities that result from provisions in the tax code 
such as tax credits, deductions, exemptions, and tax-preferred savings 
programs. Providing federal financial assistance in these varied ways 
presents students and their families with multiple tools to help them 
pay higher education expenses. However, as we have previously 
reported, it may be difficult for families to understand higher 
education tax expenditures and use them correctly.[Footnote 1] 
Moreover, policymakers have raised questions about the effect of 
federal assistance on student outcomes such as graduation rates, and 
whether there is an appropriate return on the federal investment. In 
addition, the existence of multiple programs with similar goals and 
beneficiaries could potentially be an indicator of overlap or 
duplication of federal efforts. 

Many meaningful results that the federal government seeks to achieve--
including those for higher education--require the coordinated efforts 
of more than one agency. The GPRA Modernization Act of 2010 (GPRAMA) 
[Footnote 2] amended the Government Performance Results Act of 1993 to 
establish a new framework for providing a more crosscutting and 
integrated approach to focusing on results and improving government 
performance. Moving forward, GPRAMA implementation can help inform 
tough choices in setting priorities as government policymakers address 
the rapidly building fiscal pressures facing our national government. 

In response to your request, this report addresses the following 
objectives: (1) describe the size and distribution of federal grants, 
loans, and tax expenditures available to assist students and families 
with higher education expenses; (2) assess the extent to which tax 
filers select higher education provisions that maximize their tax 
benefit; (3) summarize what is known about the effect of grants, 
loans, and tax expenditures on student attendance, choice, 
persistence,[Footnote 3] and completion; and (4) describe factors that 
contribute to the effectiveness and efficiency of federal higher 
education student assistance programs. 

To describe Title IV aid and higher education tax expenditures, we 
analyzed the most recently available data and reviewed relevant 
federal laws, regulations, and guidance from the U.S. Department of 
Education (Education), Internal Revenue Service (IRS), and the Board 
of Governors of the Federal Reserve System (Federal Reserve). We 
selected Title IV programs that served more than 500,000 participants 
in school year 2007-2008. We selected tax expenditures that (1) are 
designed to assist students and their families save for, pay current 
expenses, or repay expenses for higher education; (2) have eligibility 
requirements that are not based on criteria other than income or 
higher education expenses; (3) were available in tax years 2006-2009; 
and (4) had more than 50,000 tax filers claim the benefit in 2009. 
[Footnote 4] Our analysis of data from Education's 2007-2008 National 
Postsecondary Student Aid Study (NPSAS), IRS's 2006-2009 Statistics of 
Income (SOI) individual tax return file, and the Federal Reserve's 
2007 Survey of Consumer Finances (SCF) are subject to sampling errors 
because these data sets are based on samples. Unless otherwise noted, 
all percentage estimates based on the SOI and NPSAS have 95 percent 
confidence intervals that are within 10 percentage points of the 
estimate itself, and all numerical estimates other than percentages 
have 95 percent confidence intervals that are within 10 percent of the 
estimate itself. The 95 percent confidence intervals for all SCF 
estimates are provided along with the estimates in table notes or 
footnotes. To assess the reliability of the data we analyzed, we 
reviewed agency documentation and interviewed agency officials 
familiar with the data. We determined that these data were 
sufficiently reliable for our purposes. 

To assess the extent to which tax filers selected higher education tax 
provisions that maximized their tax benefit, we combined information 
from the SOI individual tax file with information from Form 1098-T 
Tuition Statement, which provides information on students' enrollment 
status at an educational institution. We then calculated which tax 
provision would maximize filers' tax benefits based on program 
eligibility criteria for tax year 2009.[Footnote 5] Our analysis only 
covers a portion of all returns claiming an education credit or 
tuition deduction. Our analysis is limited to tax filers who appeared 
eligible for the lifetime learning credit (LLC) or tuition and fees 
deduction (tuition deduction) in 2009, had a 1098-T with information 
on the student's education expenses, and had a tax liability after 
claiming other tax benefits. After eliminating returns where 
eligibility was not clear, we included only 29 percent of returns in 
our analysis of filers with a 1098-T but selecting neither the LLC nor 
the tuition deduction in 2009. Appendix I provides details on the 
percentage of returns included in our analysis. Our findings could 
also be influenced if institutions reported inaccurate expense 
information on the 1098-T. Also, our analysis did not consider whether 
a taxpayer who appeared to make a suboptimal choice by not claiming an 
LLC or tuition deduction did so to avoid being subject to alternative 
minimum tax liability.[Footnote 6] To estimate the effect state tax 
laws may have on the optimal choices of taxpayers filing their federal 
income taxes, we utilized the National Bureau of Economic Research's 
(NBER) TAXSIM Model, a model that calculates estimated tax liabilities 
under U.S. federal and state income tax laws. 

To summarize what is known about the effect of grants, loans, and tax 
expenditures on student attendance, choice, persistence, and 
completion, we conducted a literature review for original research 
published since our previous report in 2005.[Footnote 7] We searched 
literature that provides original empirical data analyses according to 
professional standards of econometric analysis for their 
methodological rigor and contains acceptably identified statistical 
estimates. 

We identified factors that contribute to the effectiveness and 
efficiency of federal higher education assistance programs by 
reviewing criteria from prior and ongoing GAO studies. We supplemented 
this review and validated our framework by conducting semi-structured 
interviews with five academic experts in higher education and economic 
policy. We selected experts based on the relevance of their published 
work on higher education assistance, their recognition in the 
professional community, their demonstrated expertise in Title IV 
programs or tax expenditures, and others' recommendations. See 
appendix I for more information about our scope and methodology. 

We conducted this performance audit from June 2011 to May 2012 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

Title IV aid and tax expenditures help reduce the cost of attendance 
for students and families. Students and families may be eligible for 
multiple Title IV programs and tax expenditures, depending on each 
program's rules. We identified seven Title IV programs and eight tax 
expenditures that help students and families save for, pay, and repay 
the costs of higher education; the seven Title IV programs we reviewed 
account for about 89 percent of the total aid available for higher 
education and training through Education in fiscal year 2011.[Footnote 
8] Two departments within the scope of this review have responsibility 
for federal higher education assistance: Education, which administers 
Title IV programs; and the Department of the Treasury (Treasury), 
which administers higher education tax provisions. In fiscal year 
2010, Education provided approximately $37.5 billion in grants and 
made more than $104.3 billion in loan assistance available through 
Title IV programs reviewed in this report.[Footnote 9] In the same 
year, revenue losses from higher education tax provisions reviewed in 
this report--the amount of revenue the government forgoes--were an 
estimated $25 billion.[Footnote 10] 

Students receive Title IV aid while they are in school and use it to 
pay for current education expenses. Tax expenditures, on the other 
hand, reach widely across students' life spans. For example, tax-
preferred savings vehicles allow families to save for future expenses; 
tax credits help families pay for current expenses; and the student 
loan interest deduction helps people repay expenses after their 
education. Major programs are summarized below, and detailed 
descriptions of Title IV programs and tax expenditures are in appendix 
II. 

Title IV Aid: 

Federal assistance is provided to students and families through 
multiple Title IV grant and loan programs. Grants such as Pell Grants 
reduce the cost of higher education for the student and do not need to 
be repaid. Federal student loans, which include subsidized and 
unsubsidized Direct Stafford loans and Parent Loans for Undergraduate 
Students (PLUS) loans, also help students and their families finance 
the costs of higher education but must be repaid. Title IV also 
authorizes programs that are funded by the government and administered 
by participating higher education institutions, which are collectively 
known as campus-based aid.[Footnote 11] 

A substantial portion of Title IV aid is awarded based on the amount 
of a student's financial need, which is generally the difference 
between a student's cost of attendance and an estimate of the 
student's (and his or her family's ability in the case of a dependent 
student) ability to pay these costs--called the expected family 
contribution (EFC). To apply for Title IV aid, students or families 
submit a Free Application for Federal Student Aid (FAFSA), which 
includes information on the student's and/or family's income, assets, 
and federal income tax expenses. After Education processes an 
applicant's FAFSA, a report summarizing the EFC and the student's 
federal aid eligibility is sent to the applicant or made available 
online. After admission, colleges send applicants award letters that 
include the types and amounts of federal, state, and institutional aid 
for which the student would be eligible, should the student decide to 
enroll. 

Tax Expenditures: 

Federal assistance is also provided to students and families through 
multiple tax expenditures. For tax year 2010, IRS guidance on higher 
education tax expenditures, Publication 970, Tax Benefits for 
Education, describes several tax credits, deductions, and tax-
preferred savings vehicles that help students and families pay for 
qualified higher education expenses.[Footnote 12] 

Tax credits such as the American opportunity credit (AOC) and the 
lifetime learning credit (LLC) reduce tax filers' income tax liability 
on a dollar-for-dollar basis for qualified education expenses. Tax 
deductions, such as the tuition and fees deduction (tuition 
deduction), permit tax filers to subtract qualified education expenses 
from income that would otherwise be taxable.[Footnote 13] Therefore, 
deductions reduce filers' tax liability less than credits for any 
given amount claimed.[Footnote 14] To benefit from a higher education 
tax credit or the tuition deduction, a tax filer must use tax form 
1040 or 1040A and have an adjusted gross income[Footnote 15] below the 
tax provisions' statutorily specified income limits, among other 
requirements. 

Tax-preferred savings vehicles, including qualified tuition programs 
(also known as 529 plans) and Coverdell education savings accounts 
(ESA) allow tax filers to save for education expenses (using post-tax 
income), and in some cases prepay tuition, without paying tax on the 
income from those investments. Tax penalties apply if the funds are 
not used for qualified education expenses. 

Parents of children attending college can also benefit from tax 
provisions not listed in the Publication 970. For example, filers can 
claim a parental personal exemption for a dependent who is age 19 
through 23 and a full-time student at least 5 months of the year. 
Exemptions reduce taxable income by permitting tax filers to deduct a 
certain amount from their gross income for each dependent they claim. 
In addition, certain eligible tax filers with earned income and a 
qualifying child who is aged 19 through 23 and a full time student at 
least 5 months of the year can claim a larger Earned Income Tax Credit 
(EITC). 

Planning, Predicting, and Applying for Assistance: 

To benefit from both Title IV aid and tax expenditures, students and 
families must navigate many uncertainties. 

Planning for future college expenses. Saving for a child's college 
education requires families to make complicated decisions about the 
best strategy to finance a child's future college education. For 
example, families have to make decisions about whether their child 
will go to college, the amount to save, and whether to use a tax-
preferred savings vehicle (and if so, which one). In addition, parents 
need to make their best guesses about the price of the school the 
child will attend or whether the child will be a dependent at the time 
he or she becomes a college student. 

Predicting the amount and time frames of assistance. A key challenge 
students and families face is that they must make college application 
decisions before knowing their eligibility for federal assistance, as 
illustrated in figure 1 below. For Title IV aid, students receive 
eligibility information after they apply for and are accepted to a 
school, generally in the spring of their senior year in high school, 
but before they need to accept an offer of admission and enroll in a 
school. Students applying to colleges and their families also may not 
know for certain if they are eligible for one of the tax provisions or 
what the amount of the tax benefit will be until they prepare and file 
their tax returns well into the student's first year in college. This 
makes it difficult for families to predict and plan for the true cost 
of college prior to enrolling. 

Figure 1: Illustration of Planning and Payment Processes for Higher 
Education Expenses: 

[Refer to PDF for image: interactive graphic] 

Directions: Roll over time spans in the chart below for more details. 

Source: GAO (information); Digital Vision (photo). 

Notes: This graphic provides one example of the timing for financial 
aid, tax, and loan repayment decisions. The process may
differ for nontraditional students. For example, students that attend 
school less than half time or at times other than the fall through
spring semesters may make decisions and payments at times other than 
those depicted in this illustration. Also, individuals other
than parents-—such as legal guardians-—may be involved in financial 
aid and tax decisions. 

FAFSA deadlines vary by state, and the Department of Education Web 
site often directs students to contact their financial aid
administrator for deadlines. Each college within a state may also have 
a different deadline. For 2011-2012, the federal deadline
is June 30, 2012. 

[A] Some education institutions may require a FAFSA before families 
have filed a tax return. 

To print text version of this graphic, go to appendix III. 

[End of figure] 

In response to a statutory requirement designed to provide students 
and families a better understanding of the net price of a college, 
[Footnote 16] higher education institutions have posted net price 
calculators on their Web sites. The calculators use institutional data 
to provide estimated net price information to current and prospective 
students and their families based on a student's individual 
circumstances. However, the net price calculation includes 
consideration of grant aid but does not take into account tax benefits 
a student or family may receive. 

Applying for assistance. While Title IV aid and tax expenditures 
differ in who is responsible for obtaining aid, they both provide 
challenges to families in understanding and applying for assistance. 
With Title IV aid, Education and higher education institutions are 
responsible for determining aid eligibility and award amounts. While 
families do not need to learn the eligibility rules for each Title IV 
program, they have to answer numerous questions when applying for aid. 
Many experts, both within and outside of government, have expressed 
concern about the length and complexity of the FAFSA, including the 
possibility that the application process itself may discourage some 
students from applying.[Footnote 17] With tax expenditures, the 
responsibility for selecting among and properly using them rests with 
tax filers, who face many challenges in selecting the best choice from 
among the numerous tax expenditures available for higher education. 

Multiple Title IV Programs and Tax Expenditures Provided Substantial 
Aid across Income Levels: 

Title IV Aid and Tax Expenditures Are Substantial and Have Generally 
Increased in Recent Years: 

Multiple Title IV programs and tax expenditures are available to help 
eligible students and families pay for higher education. Figure 2 
gives an overview of the number and type of programs included in this 
review, along with total benefits and recipients for each program, the 
median amount of each award, and the median income of recipients. 

Figure 2: Size and Characteristics of Title IV Aid Programs and Higher 
Education Tax Expenditures: 

[Refer to PDF for image: interactive graphic] 

Directions: Roll over each program beneath the dotted line of the 
flowchart below to see the number of beneficiaries, the total dollars 
of the benefit, the average amount of each benefit, and the median
income of recipients. 

Key: 

Programs used to pay for current expenses; 
Programs used to save for future expenses; 
Programs used to repay expenses. 

Source: GAO analysis of U.S. Department of Education documents, school-
year 2007-2008 NPSAS data, IRS SOI data for tax year 2009, and the 
2007 Federal Reserve Survey of Consumer Finance. 

Note: For estimates of tax expenditures other than QTPs and ESAs, we 
report the tax benefit a filer receives from claiming the tax 
expenditure. All figures presented are sample estimates and are 
subject to sampling error. We are 95 percent confident that in 2006, 
between 3.5 and 4.9 million households held a QTP or ESA; that the 
median account balance was between $7,500 and $12,000; and that the 
median gross income of households was between $106,000 and $138,000. 
Data for QTPs and ESAs are presented together because the public SCF 
data file does not provide separate estimates for the two accounts.
Our estimates for the number of filers claiming an education tax 
benefit only include those filers that reduced their tax liability by 
claiming these expenditures. All other estimates in this figure have 
95% confidence intervals that are within +/- 10 percent of the 
estimate itself. 

[End of figure] 

Since 2006, the number of recipients and the value of benefits 
provided through Title IV aid and tax expenditures have generally 
increased, though the overall size of each program differed.[Footnote 
18] The number of students receiving Title IV aid increased by 23 
percent from 2006-2009, from 10.4 million to 12.8 million. The number 
of tax filers benefiting from an education tax expenditure was larger, 
and increased by 25 percent from 2006 to 2009, from 14.4 million to 
18.0 million (see figure 3). The total number of Title IV and tax 
recipients should not be added together, as in some cases students and 
families may be eligible for benefits from both types of programs. 

Figure 3: Number of Recipients of Title IV Programs and Tax 
Expenditures Who Pay for Current Expenses, 2006-2009: 

[Refer to PDF for image: vertical bar graph] 

Number of recipients: 

Year: 2006; 
Tax Expenditures: 14.4 million; 
Title IV Aid: 10.4 million. 

Year: 2007; 
Tax Expenditures: 14.7 million; 
Title IV Aid: 10.1 million. 

Year: 2008; 
Tax Expenditures: 14.9 million; 
Title IV Aid: 11.6 million. 

Year: 2009; 
Tax Expenditures: 18.0 million; 
Title IV Aid: 12.8 million. 

Source: GAO analysis of the Budget of the United States Government, 
fiscal years 2008-2011 and IRS data 2006-2009. 

Note: Title IV data are presented by federal fiscal year (October-
September) and IRS data are by tax year (January-December). The number 
of Title IV aid recipients may include students and families who also 
filed for tax benefits as well, and vice versa. Within Title IV and 
tax expenditures, separately, the number of recipients is 
unduplicated. For example, a family with two students claiming AOC's 
for both students would be counted as one tax filer. For the number of 
recipients, Title IV programs include grants, work-study, and loans 
within the scope of this review. These figures also include programs 
we did not review, including Academic Competitiveness Grants, National 
Science & Mathematics Access to Retain Student Talent Grants, and 
Leveraging Educational Assistance Partnership Grants. Tax expenditures 
include the AOC, Hope credit, LLC, tuition deduction, EITC for 
students ages 19-23, and the parental exemption for dependent students 
ages 19-23. Estimated number of recipients from IRS data have 95 
percent confidence intervals that are within 10 percent of the 
estimate itself. 

[End of figure] 

From 2006 to 2009, tax filers claimed a roughly comparable dollar 
amount of tax benefits as students received through Title IV grants 
during these years (see figure 4). This analysis focuses on Title IV 
grants because they are most comparable to tax expenditures.[Footnote 
19] The dollar value of both tax benefits and grants increased from 
2006 to 2009. Tax benefits increased by about 78 percent ($16.4 
billion in 2006 to $29.2 billion in 2009) and grants by 97 percent 
($15.5 billion in 2006 to $30.5 billion in 2009).[Footnote 20] 

Figure 4: Amount of Benefits from Selected Title IV Programs and Tax 
Expenditures That Pay for Current Expenses, 2006-2009: 

[Refer to PDF for image: vertical bar graph] 

Year: 2006; 
Tax Benefits: $16.4 billion; 
Title IV Grants (Pell and SEOG): $15.5 billion. 

Year: 2007; 
Tax Benefits: $16.4 billion; 
Title IV Grants (Pell and SEOG): $16.7 billion. 

Year: 2008; 
Tax Benefits: $17.4 billion; 
Title IV Grants (Pell and SEOG): $20.3 billion. 

Year: 2009; 
Tax Benefits: $29.2 billion; 
Title IV Grants (Pell and SEOG): $30.5 billion. 

Source: GAO analysis of the Budget of the United States Government, 
fiscal years 2008-2011 and IRS data 2006-2009. 

Note: Values are reported in 2012 constant dollars. Title IV data are 
presented by federal fiscal year (October-September) and IRS data are 
by tax year (January-December). For the Title IV benefits, only Pell 
Grants and Federal Supplemental Educational Opportunity Grants are 
included. Tax expenditures include the AOC, Hope credit, LLC, tuition 
deduction, EITC for students ages 19-23, and the parental exemption 
for dependent students ages 19-23. Dollar estimates from IRS data have 
95 percent confidence intervals that are within 10 percent of the 
estimate itself. 

[End of figure] 

The sharp increase in benefits for both tax expenditures and Title IV 
grants from 2008 to 2009 may be due to increases in enrollment and 
legislative changes, among other factors. The overall number of 
students enrolling in college increased 11.9 percent from 2007 to 
2009--from 18.2 million to 20.4 million. The most recent national 
recession--which lasted from December 2007 through June 2009--may have 
led more individuals to enroll in college. Researchers have found that 
as unemployment increases during a recession, unemployed individuals 
may return to school to obtain additional skills, certifications, or 
degrees.[Footnote 21] In addition to these factors, legislative 
changes influenced the increase in benefits from 2008 to 2009. For 
example, for Title IV programs, Congress increased the maximum Pell 
Grant award by 13 percent, from $4,731 in the 2008-2009 school year to 
$5,350 in the 2009-2010 school year.[Footnote 22] During this period, 
the total benefits provided through Pell Grants increased by 
approximately $10 billion.[Footnote 23] For tax expenditures, 
legislation in 2009 replaced the Hope credit with the AOC. Compared to 
the Hope credit, the AOC is available to a broader range of tax filers 
because it: 

* is larger (the maximum available credit increased from $1,800 to 
$2,500); 

* has higher income phase-out limits; 

* adds required course materials to the definition of qualified 
education expenses; 

* is available for the first 4 years of higher education, instead of 
the first 2; and: 

* is refundable up to 40 percent of the credit (up to $1,000 a year), 
allowing filers without income tax liability to receive a benefit they 
would not get under the Hope credit, which was not refundable. 

In 2008, before the legislative change, approximately 7.7 million tax 
filers claimed a Hope credit or LLC, receiving $7.6 billion in 
benefits.[Footnote 24] In 2009, after the change, 12.5 million tax 
filers claimed an AOC, LLC, or Hope credit,[Footnote 25] receiving 
about $18.7 billion in benefits. This increase more than offset a 
concurrent decrease in the number of tax filers' claiming the tuition 
deduction. From 2008 to 2009, the number of tax filers claiming the 
tuition deduction decreased from about 3.3 million to about 1.7 
million, and the amount of benefits received decreased from about $1.5 
billion to about $658 million (see figure 5). 

Figure 5: Tax Benefits Received by Tax Filers Claiming the Tuition 
Deduction, Hope Credit, LLC, and AOC, 2006-2009: 

[Refer to PDF for image: vertical bar graph] 

Year: 2006; 
Tuition deduction: $1.6 billion; 
Hope credit: $3.9 billion; 
LLC: $4.0 billion. 

Year: 2007; 7 billion; 674; 
Hope credit: $3.6 billion; 
LLC: $3.9 billion. 

Year: 2008; 
Tuition deduction: $1.6 billion; 
Hope credit: $4.0 billion; 
LLC: $4.1 billion. 

Year: 2009; 
Tuition deduction: $657 million; 
Hope credit: $325 million; 
LLC: $2.5 billion; 
AOC: $16.7 billion. 

Source: GAO analysis of IRS SOI data. 

Note: Values are presented in 2012 constant dollars. We are 95 percent 
confident that our estimate for the 2009 Hope credit is between about 
$270 million and $382 million. All other dollar estimates have 95 
percent confidence intervals that are within 10 percent of the 
estimate itself. 

[End of figure] 

Title IV and Tax Expenditures Offer Assistance to Students across 
Income Levels: 

Title IV Programs: 

Title IV grants tend to benefit students and families[Footnote 26] 
with incomes below the national median (which was about $52,000 from 
2006-2010), while loans and work-study benefit these students and 
families with incomes well above the national median. The income 
distribution of students served by the two largest Title IV programs--
the Pell Grant and Stafford loan programs--differs by dependency 
status because independent students generally have lower incomes and 
less accumulated savings than dependent students and their 
families.[Footnote 27] Funds from these programs were generally spread 
across various income levels for dependent students, but concentrated 
at lower income levels for independent students, as shown in figure 6. 
For example, nearly 90 percent of subsidized Stafford funds for 
independent students went to the 91 percent of independent students 
with incomes $60,000 and below. In contrast, about 60 percent of 
subsidized Stafford funds for dependent students went to students and 
families with incomes $60,000 and below.[Footnote 28] 

Figure 6: Number and Percentage of Title IV Aid Recipients and Dollars 
Received, by Income Category and Dependency Status, 2007-2008: 

[Refer to PDF for image: interactive graphic] 

Directions: Roll over each program for more details. 

Source: GAO analysis of Education NPSAS 2007-2008 data. 

Note: Numbers may not add due to rounding. See appendix III for 
confidence intervals. 

[End of figure] 

The distribution of the three small campus-based aid programs (FSEOG, 
Perkins, and Federal Work-Study) has some similarities and differences 
with the larger Title IV programs. While the larger Title IV programs--
Pell Grants, Stafford loans, and PLUS loans--distributed more funds to 
independent students, more campus-based aid went to dependent 
students.[Footnote 29] Like Pell Grants, and as intended, campus-based 
FSEOG primarily benefited students and families with incomes below the 
national median household income.[Footnote 30] Like subsidized 
Stafford loans, the majority of all campus-based Perkins loan 
recipients with incomes $40,000 and under received the majority of 
funds from the program. See figure 7 for additional detail. 

Figure 7: Number and Percentage of Campus-Based Aid Recipients and 
Dollars Received, by Income Category and Dependency Status, 2007-2008: 

[Refer to PDF for image: interactive graphic] 

Directions: Roll over each program for more details. 

Source: GAO analysis of Education NPSAS 2007-2008 data. 

Note: Numbers may not add due to rounding. See appendix III for 
confidence intervals. 

[End of figure] 

While FSEOG and Perkins provide aid in the form of grants and loans 
(respectively) for students with exceptional financial need, the 
Federal Work-Study program provides funding for the employment of 
students with any financial need. This difference in targeted 
populations is reflected in the distribution of work-study funds by 
income. For example, 36 percent of the funds went to the 36 percent of 
recipients from families with incomes over $60,000. The share of work-
study funds distributed to students from families with incomes over 
$100,000 grew significantly from the 2003-2004 school year to the 2007-
2008 school year, from 9 percent to 15 percent.[Footnote 31] 

Tax Expenditures: 

Most tax benefits from the tuition and fees deduction and the parental 
exemption for dependent students went to households with incomes above 
$60,000, whereas the majority of benefits for the other higher 
education tax expenditures in our review (e.g., student loan interest 
deduction, AOC, LLC, and EITC) went to households with incomes below 
$60,000.[Footnote 32] Figure 8 summarizes the distribution of tax 
benefits to filers, by income. 

Figure 8: Number and Percentage of Tax Filers Claiming Higher 
Education Tax Provisions and Total Benefits, by Income Category, 2009: 

[Refer to PDF for image: interactive graphic] 

Directions: Roll over each program for more details. 

Source: GAO analysis of IRS SOI data. 

Note: Numbers may not add due to rounding. See appendix III for 
confidence intervals. Our estimates for the percentage of filers 
claiming the tuition and fees deduction and the student loan interest 
deduction only include those filers that reduced their tax liability 
by claiming these deductions. 

[End of figure] 

With the introduction of the AOC, the distribution of filers claiming 
tax credits in the lowest and highest income categories changed. In 
2008, 14 percent of tax filers claiming a Hope credit had incomes 
under $20,000, and they received 6 percent of the total benefits 
provided. In 2009, however, 28 percent of tax filers claiming the AOC 
had incomes under $20,000, receiving 15 percent of the total benefits 
provided. Similarly, tax filers making more than $100,000 made up only 
5 percent of the tax filers who claimed the Hope credit in 2008 
(receiving 4 percent of benefits), but accounted for 16 percent of tax 
filers claiming the AOC in 2009 (receiving 22 percent of the total 
benefits). Almost half of tax filers receiving an AOC in 2009 (about 
4.2 million of the 9.1 million who claimed the credit) received a 
refundable credit that exceeded their tax liability. 

Education savings accounts are primarily used by households with 
incomes greater than the national median. Education savings accounts 
are more advantageous to families with higher incomes and tax 
liabilities because, among other reasons, these families have more 
available money to save and have a higher marginal tax rate, and thus 
benefit the most from these tax preferences. According to our analysis 
of the 2007 Survey of Consumer Finances, the most recent year which 
survey results are available, we found that the gross income of 
households with Coverdell and 529 accounts is significantly higher 
than households without these accounts, across all income ranges we 
reviewed. For example, in 2007, households with these accounts had a 
median income of $122,400, whereas households without these accounts 
had a median income of $43,400.[Footnote 33] In addition, we found 
that 12 percent of households with incomes above $100,000 held these 
accounts. In contrast, about 4 percent of households with incomes from 
$50,001 to $100,000 and about 1 percent of households with incomes 
below $50,000 held these accounts.[Footnote 34] 

Taxpayers Do Not Always Select Provisions That Maximize Potential Tax 
Benefits: 

Some Filers Do Not Claim a Tax Credit or Deduction When Eligible, and 
Others Choose One That Does Not Give Them the Largest Available Tax 
Benefit: 

Taxpayers may not maximize their tax benefits if they 1) claim no 
credit or deduction when they are eligible or 2) choose a credit or 
deduction that yields less of a tax benefit than another provision 
would, also known as making a "suboptimal choice."[Footnote 35] Our 
analysis only covers a portion of all returns claiming an education 
credit or tuition deduction. Our analysis is limited to tax filers who 
appeared eligible for the LLC or tuition deduction in 2009, had a 1098-
T with information on the student's education expenses, and had a tax 
liability after claiming other tax benefits. After eliminating returns 
where eligibility was not clear, we included only 29 percent of 
returns in our analysis of filers with a 1098-T but selecting neither 
the LLC nor the tuition deduction in 2009. Our findings could also be 
influenced if institutions reported inaccurate expense information on 
the 1098-T. In addition, some of the students we include in our 
analysis have qualified tuition and related expenses reported on a 
1098-T but may not be eligible to use those expenses to claim an 
education credit or the tuition deduction. For example, a tax filer 
cannot claim an AOC based on the same expenses paid for with a private 
scholarship, but the educational institution may not know to include 
this amount on box 5, "scholarships or grants" on the 1098-T. In 
addition, we examined whether taxpayers' choices were suboptimal when 
state income taxes were taken into account. See appendix I for a full 
description of our methodology and its limitations. 

Claiming no credit or deduction. Since 2005, we have repeatedly found 
that some taxpayers fail to claim the LLC or tuition deduction for 
which they appear eligible.[Footnote 36] This continues to be the 
case. We estimate that almost 11 million filers could have claimed the 
LLC or the tuition deduction and thereby reduced their taxes in 2009. 
However, about 14 percent of those filers, representing more than 1.5 
million returns, failed to claim either of them.[Footnote 37] On 
average, taxpayers who claimed no credit or deduction could have 
claimed benefits of $466. We estimate that the total amount of tax 
benefits filers did not claim was approximately $726 million in 2009. 
We found no cases where filers' combined state and federal tax 
liability would have been higher if they had claimed one of those 
benefits on their federal return. 

Choosing a credit or deduction that yields less of a tax benefit. We 
found a portion of filers who appeared eligible for the LLC or the 
tuition deduction made suboptimal choices in 2009. For example, of the 
approximately 588,000 filers who claimed the tuition deduction, about 
237,000 (40 percent) would have increased their tax benefit by 
claiming the LLC instead. On average, these filers failed to increase 
their tax benefit by $284. We estimate that the total amount of tax 
benefit filers did not claim was approximately $67.2 million in 2009. 
In some states, lowering AGI (as the deduction does) can reduce state 
income tax liability enough to compensate for the higher federal 
income tax paid. Among filers who appeared to make a suboptimal choice 
at the federal level by claiming the tuition deduction (i.e., they 
claimed the tuition deduction but would have maximized their federal 
tax benefit by claiming the LLC), about one third (about 79,000 of 
237,000 filers) actually maximized their combined federal and state 
tax benefit by selecting the tuition deduction, even though their 
federal income tax was higher. Table 1 summarizes other suboptimal 
choices we found among 2009 federal filers. 

Table 1: Estimated Suboptimal Choices on Federal Tax Returns Made by 
Taxpayers in 2009: 

Type of suboptimal choice: Claiming no credit or deduction; 
Number of taxpayers making suboptimal choice: 1.5 million; 
Percent of eligible taxpayers making a suboptimal choice: 14; 
Average amount tax filer failed to increase their tax benefit: $466; 
Total amount of tax benefit not claimed: $726 million; 
Number of filers who appeared to make suboptimal choice at the federal 
level but maximized their combined federal and state tax benefit: 0. 

Type of suboptimal choice: Claimed the LLC instead of the tuition 
deduction; 
Number of taxpayers making suboptimal choice: 38,000; 
Percent of eligible taxpayers making a suboptimal choice: 2; 
Average amount tax filer failed to increase their tax benefit: [A]; 
Total amount of tax benefit not claimed: [A]; 
Number of filers who appeared to make suboptimal choice at the federal 
level but maximized their combined federal and state tax benefit: 0. 

Type of suboptimal choice: Claimed the tuition deduction instead of 
the LLC[B]; 
Number of taxpayers making suboptimal choice: 237,000; 
Percent of eligible taxpayers making a suboptimal choice: 40; 
Average amount tax filer failed to increase their tax benefit: $284; 
Total amount of tax benefit not claimed: $67.2 million; 
Number of filers who appeared to make suboptimal choice at the federal 
level but maximized their combined federal and state tax benefit: 
79,000. 

Source: GAO analysis of IRS SOI data. 

Note: Because of data limitations, we were unable to assess whether a 
filer claiming the LLC or tuition deduction would have increased his 
or her tax benefit by claiming the AOC instead. Our estimates for the 
number of filers making a suboptimal choice only include those filers 
that had a tax liability after claiming other tax benefits. See 
appendix I for details. 

[A] Sample size is too small to estimate the average amount the tax 
filers failed to increase their tax benefit. 

[B] In some states, lowering AGI (as the deduction does) can reduce 
state income tax liability enough to compensate for higher federal 
income tax paid. Among filers who appeared to make a suboptimal choice 
at the federal level by claiming the tuition deduction (i.e., they 
claimed the tuition deduction but would have maximized their federal 
tax benefit by claiming the LLC), about one-third actually maximized 
their combined federal and state tax benefit by selecting the tuition 
deduction, even though their federal income tax was higher. 

[End of table] 

Suboptimal tax choices were not limited to tax filers who prepared 
their own tax returns without assistance. We estimate that about 16 
percent of returns prepared with software (representing about 689,000 
returns) and 17 percent of returns filed by paid preparers 
(representing about 912,000 returns) did not select a credit or 
deduction that maximized higher education tax benefits in tax year 
2009. However, filers preparing their tax returns without the aid of a 
paid preparer or software appeared more likely to make suboptimal 
choices. In tax year 2009, 38 percent of filers (about 206,000 of 
539,000 paper returns filed) made a suboptimal choice. 

Taxpayers May Be Unaware of Tax Provisions or Confused about Their Use: 

It is good practice for tax systems to be transparent and 
understandable, giving as much certainty as possible to taxpayers and 
allowing them to better plan for decisions about employment, 
investment, and consumption.[Footnote 38] However, as we have 
previously reported, the apparently suboptimal use of higher education 
tax expenditures may arise, in part, from the complexity of these 
provisions.[Footnote 39] 

Unaware of tax provisions or misunderstanding eligibility rules. Tax 
filers may fail to maximize their tax benefits because they are 
unaware of their eligibility for the provision. In addition, 
determining one's eligibility to claim a credit or deduction for 
qualified education expenses is a complex process. In the case of the 
AOC, a student (or tax filer on behalf of the student) is only 
eligible to claim the credit in the student's first 4 years of higher 
education.[Footnote 40] Since the academic year of the student is 
determined by the educational institution and is not equivalent to a 
calendar year, determining whether a student meets the AOC's academic 
eligibility requirement--particularly for students who do not follow a 
traditional path of 4 years of college--can be challenging. 

For example, a student enrolls more than half time at an eligible 
community college in 2005 and then takes 4 calendar years to complete 
2 academic years' worth of credits. He claims a Hope credit in 2007 
and 2008. In his fifth year, he enrolls full-time at a 4-year 
university. Although he is in his fifth calendar year of school, the 
student may be eligible for an AOC if the 4-year university considers 
him to be in his third academic year. 

Number of provisions. The number of higher education tax provisions 
may make it harder for taxpayers to determine which one is best for 
them. For example, 12 higher education tax benefits are outlined in 
IRS Publication 970, Tax Benefits for Education: For Use in Preparing 
2010 Returns. Publication 970 does not include the parental personal 
exemption and the Earned Income Tax Credit, which may also be 
available to parents supporting dependents who are full-time students. 
Not all of the benefits are available to all tax filers, and the 
number of available benefits may make it more difficult to determine 
eligibility. 

Similarity of provisions. If provisions are similar, it may be 
difficult for taxpayers to determine which one is best for them. For 
example, IRS Publication 970 includes four different tax expenditures 
for educational saving, each with different requirements and benefits 
to the taxpayer. 

Differences in key definitions. What tax filers are allowed to claim 
as a qualified higher-education expense varies among some of the 
higher education savings and credit provisions in the tax code. For 
example, while Coverdell education savings accounts and qualified 
tuition programs under Section 529 of the Internal Revenue Code permit 
tax filers to include room and board as qualified expenses if the 
student is enrolled at least half time, the AOC and the LLC do not. 
Tax filers must keep track of expenses separately, applying some 
expenses to certain tax provisions, but not others. 

Also, although IRS requires educational institutions to report on Form 
1098-T information about qualifying educational expenses to taxpayers 
and IRS, the information reported may not be easily understood by tax 
filers or it may not include all eligible expenses. Institutions can 
report the amount billed or paid, but these amounts may not equal the 
expenses the filer can use to claim a credit or deduction. For 
example, Form 1098-T may not account for all scholarships or grants 
the student received. In such cases, correctly reported qualified 
expenses on the tax return will not match the 1098-T. Conversely, if 
institutions do not provide information on other eligible expenses, 
such as books or equipment, taxpayers may underreport educational 
expenses. Because many of the higher education tax benefits are based 
on the expenses paid, taxpayers who underreport expenses may receive 
less of the benefit for which they would otherwise be eligible to 
receive. Also, if an institution reports the amount billed on the 1098-
T, but the filer pays the bill in the following tax year, the 1098-T 
will not reflect the amount that can be reported on the tax return 
because a filer can only claim a higher education tax benefit in the 
year the filer paid for qualified education expenses. 

Coordination with other tax provisions. In addition to learning about, 
comparing, and selecting tax provisions, tax filers must also 
understand how the use of one tax provision affects the use of others. 
The use of multiple education-related tax provisions is coordinated 
through rules that prohibit the application of the same qualified 
higher education expenses for the same student to more than one 
education-related tax preference, sometimes referred to as "anti-
double-dipping rules." These rules are important because they prevent 
tax filers from underreporting their tax liability. Nonetheless, anti-
double-dipping rules are potentially difficult for tax filers to 
understand and apply, and misunderstanding them may have consequences 
for a filer's tax liability. 

State tax rules may add complexity. As discussed earlier, figuring out 
how to maximize tax benefits is complicated by interactions with state 
tax codes. Some states offer tax incentives for higher education, 
including benefits for qualified state tuition programs and student 
loan interest deductions. To maximize their combined federal and state 
tax benefit, tax filers may also need to take into account the state 
treatment of federal higher education tax expenditures. A recent study 
found that filers may be more aware of federal tax effects than state 
tax effects, since some tax filers may not be aware of the state tax 
implications of higher education provisions.[Footnote 41] 

IRS and Education Have Taken Steps to Inform Filers, but Additional 
Tax Information Could Improve Take-Up of Tax Benefits: 

While IRS and Education have taken steps to provide information on 
higher education tax benefits to students and their families, the 
number of filers failing to claim a higher education tax benefit 
suggests more could be done. Publication 970, Tax Benefits for 
Education provides information--including eligibility rules and how to 
coordinate tax benefits with other forms of financial aid--on the tax 
provisions available to save or pay for higher education expenses. IRS 
also developed a communication plan for the AOC and other higher 
education tax benefits in 2009 and took steps to implement the plan. 
For example, IRS reached out to tax professionals at the IRS 
Nationwide Tax Forum and provided information through traditional and 
social media, including IRS.gov. Officials also stated they 
coordinated with software providers to ensure that tax preparation 
software provided links to the relevant higher education forms, 
including the Form 8863 Education Credits and the Form 8917 Tuition 
and Fees Deduction. Education's Federal Student Aid Web site provides 
a link to IRS's Publication 970, Tax Benefits for Education. Education 
officials told us they are considering whether they could provide 
additional information to increase students' and families' awareness 
of these tax benefits. 

IRS and Education officials have begun to coordinate their efforts to 
inform students and families of tax benefits. In its AOC communication 
plan, IRS indicates it is coordinating with the Department of 
Education and state education agencies to discuss communication 
options. Education officials told us that they have a general 
agreement with IRS on what tax benefit information Education will 
provide to students and families. Education officials told us they 
were willing to provide additional information to students and 
families, as long as it does not contradict guidance provided by IRS. 
Also, Education officials told us they are discussing the possibility 
of sharing information with IRS to help the IRS target outreach to 
students and families that may be eligible for higher education tax 
benefits. 

It may be possible to reduce the number of filers who fail to claim a 
higher education tax benefit and improve students' and families' 
ability to pay for college. A possible starting point could be for IRS 
to identify the key characteristics of filers who appear eligible for 
higher education tax provisions but fail to claim them. IRS could then 
work with software developers and tax preparers to identify reasons 
why filers using these services are not claiming benefits for which 
they appear eligible. IRS could also provide additional assistance to 
students and families by developing a calculator (similar to the net 
price calculator) that students and families could use to estimate 
their tax benefits for the upcoming school year. In addition, 
Education officials stated that they could coordinate with IRS to 
provide tax benefit information before students and families need to 
make key financial decisions. For example, Education officials 
expressed interest in working with IRS to provide a link to the 
Publication 970 in the College Scorecard and the Model Financial Aid 
Offer Form, which Education is developing to assist students and 
families in comparing college costs and financial aid offers. Given 
the number of filers not claiming benefits, it should be possible for 
IRS and Education officials to design outreach efforts in such a way 
that the potential benefits outweigh the costs. 

Research on Effects of Federal Assistance for Higher Education Remains 
Limited: 

Since 2005, when we last reported on this subject,[Footnote 42] 
research into the effects of federal assistance for higher education 
on the student outcomes of attendance, choice, persistence, and 
completion has addressed more Title IV aid programs and tax 
expenditures, but some forms of assistance and outcomes remain largely 
unstudied (see table 2).[Footnote 43] In addition to new studies that 
complement existing research on federal grants, loans, and tax 
credits, a few researchers have recently examined the effects of the 
Federal Work-Study program and the tuition deduction, which we 
previously reported had not been the subject of any evaluative 
research. We did not, however, identify evaluative research into these 
student outcomes for a number of federal tax expenditures for higher 
education including 529 savings plans, Coverdell ESAs, the student 
loan interest deduction, or the parental personal exemption. The 
studies we identified did not cover the effects of any single program 
or tax provision on all four student outcomes. We found that 
researchers have examined the effects of Title IV aid and federal tax 
expenditures on a limited basis--in particular, only for certain 
states, types of schools, and groups of students. The studies we 
reviewed suggest that federal assistance has varying effects, 
depending on the students and situations involved and provide an 
incomplete view of the effects of federal assistance because of the 
studies' narrow focus. As a result, research on federal assistance for 
higher education continues to provide an incomplete picture of the 
effectiveness of federal assistance for higher education. 

Table 2: Research We Reviewed on the Effects of Federal Assistance Is 
Limited and Cannot Be Generalized: 

Federal assistance for higher education: Grants[A]; 
Attendance: [Check]; 
Choice: [Check]; 
Persistence: [Check]; 
Completion: [Empty]. 

Federal assistance for higher education: Student loans; 
Attendance: [Check]; 
Choice: [Empty]; 
Persistence: [Check]; 
Completion: [Check]. 

Federal assistance for higher education: Work-study; 
Attendance: [Empty]; 
Choice: [Empty]; 
Persistence: [Check]; 
Completion: [Check]. 

Tax expenditures: 

Federal assistance for higher education: Tuition and fees deduction; 
Attendance: [Check]; 
Choice: [Empty]; 
Persistence: [Empty]; 
Completion: [Check]. 

Federal assistance for higher education: Student loan interest 
deduction; 
Attendance: [Empty]; 
Choice: [Empty]; 
Persistence: [Empty]; 
Completion: [Empty]. 

Federal assistance for higher education: Parental exemption for 
students 19 to 23; 
Attendance: [Empty]; 
Choice: [Empty]; 
Persistence: [Empty]; 
Completion: [Empty]. 

Federal assistance for higher education: American opportunity credit; 
Attendance: [Empty]; 
Choice: [Empty]; 
Persistence: [Empty]; 
Completion: [Empty]. 

Federal assistance for higher education: Hope credit; 
Attendance: [Check]; 
Choice: [Empty]; 
Persistence: [Empty]; 
Completion: [Empty]. 

Federal assistance for higher education: Lifetime learning credit; 
Attendance: [Check]; 
Choice: [Empty]; 
Persistence: [Empty]; 
Completion: [Check]. 

Federal assistance for higher education: Earned income tax credit for 
students 19 to 23; 
Attendance: [Empty]; 
Choice: [Empty]; 
Persistence: [Empty]; 
Completion: [Empty]. 

Federal assistance for higher education: Coverdell education savings 
account; 
Attendance: [Empty]; 
Choice: [Empty]; 
Persistence: [Empty]; 
Completion: [Empty]. 

Federal assistance for higher education: 529 Qualified tuition program; 
Attendance: [Empty]; 
Choice: [Empty]; 
Persistence: [Empty]; 
Completion: [Empty]. 

Source: GAO analysis. 

Note: We did not find research that could be generalized. A check mark 
indicates that one or more Title IV aid or tax provisions in the 
category has been studied for certain states, types of school, or 
groups of students. 

[A] Research conducted into the effects of Pell Grants but not Federal 
Supplemental Educational Opportunity Grants. 

[End of table] 

Although evaluative research linking federal assistance to student 
outcomes remains limited, a number of studies address other issues 
that promote or complicate the effective use of federal assistance, 
and researchers have also studied the effects of nonfederal student-
aid programs. For example, researchers have determined that a lack of 
information on the costs and benefits of higher education can limit 
students' choice of institutions to attend. In addition, researchers 
have provided mixed evidence on the extent to which schools raise 
their tuition or decrease the institutional aid they offer in response 
to federal assistance. There is also a wide body of research into the 
effectiveness of both need-and merit-based state, regional, and 
institutional aid programs. Researchers we interviewed told us they 
have turned to the study of state-based student aid--for which there 
may be better data than for federal programs, and some of which are 
designed to allow for high quality evaluation--because these studies 
can yield informative lessons about the effects of assistance for 
higher education. 

Data and Methodological Challenges Remain Persistent Obstacles to 
Research: 

Continuing gaps in research-based evidence on the effectiveness of 
Title IV aid and tax expenditures may be due, in part, to data and 
methodological challenges that have proved difficult to overcome. Data 
from Education necessary to conduct evaluative research on Title IV 
aid are fragmented and not routinely available to researchers. 
Education commissioned a 2011 study to report on issues associated 
with Education's sources of data on federal grants, loans, and work-
study.[Footnote 44] According to the study, multiple offices within 
Education are responsible for tracking and compiling data and the 
datasets produced by these offices are often incompatible with each 
other. For example, Education does not have a uniform method for 
assigning codes to identify college and university campuses. As a 
result, researchers are unable to combine information from the 
datasets to create comprehensive, comparable, and accurate data that 
would allow them to estimate the effect of Title IV aid programs on 
student outcomes. Additionally, some of Education's data sources are 
subject to time lags, and others are not regularly made available for 
research. According to Education officials, data for individual 
students developed primarily for the administration of Title IV aid 
are also protected by privacy laws and generally unavailable to 
researchers.[Footnote 45] In some cases, the data that Education does 
make publicly available are preliminary and subject to change with 
little public notice. The study recommended that Education should 
assess the feasibility of making its data more compatible and 
accessible, acknowledging that this would require additional resources 
and could place increased reporting burdens on higher education 
institutions. 

Education officials reported they are addressing the study's 
recommendations through several recently completed and ongoing 
initiatives intended to make its data more accessible and useable. For 
example, in March 2012 Education expanded an ongoing effort to provide 
school districts with data on which students have submitted a FAFSA 
and whether their submissions were complete. Education told us these 
data are intended to help high school principals and guidance 
counselors increase FAFSA filings and attendance at institutions of 
higher education by their students. Education also reported taking 
steps intended to facilitate higher education research by improving 
the accuracy of its data on the student outcome of completion and by 
developing a tool for possible release in 2012 that will address 
differences between Education's various data sources in the codes used 
to identify colleges and universities. Education told us these steps 
will allow for more precise measurement of student outcomes for Title 
IV recipients and may enable researchers to merge some of Education's 
data sources to create reports on institutions of higher education. 
Education is also pursuing a process for the release of additional 
data both to the public and to fulfill specific research requests 
while protecting the privacy of federal aid recipients. Education 
estimates that one of the steps required to do this could take between 
2 and 6 months to complete while the other could take close to a year 
or more to complete. 

Individual taxpayer data needed to evaluate federal tax expenditures 
are subject to privacy restrictions or are not collected by IRS. 
Although tax expenditures are now a well-established source of 
assistance for students and their families, tax information that may 
be useful for research is unavailable to most researchers. Section 
6103 of the Internal Revenue Code protects tax returns and other tax 
information collected by IRS as confidential, and it prohibits 
disclosure of federal tax information, except as specifically 
authorized by statute. Also, IRS in general only collects tax 
information required for administering the tax code. For example, 
while the IRS collects data on distributions from 529 plans, it does 
not collect information on contributions to these accounts, as these 
plans do not have a defined contribution limit.[Footnote 46] 

Methodological challenges also add to the difficulty of measuring the 
effect of federal assistance efforts. Opportunities are limited within 
the study of higher education financial aid for researchers to conduct 
the type of experiments that allow them to isolate the effects of a 
particular federal aid program or tax expenditure. This is because, in 
addition to sufficient data, evaluative research requires some level 
of variation in a Title IV program or tax expenditure that allows 
researchers to compare outcomes across students before and after a 
change. Most of the federal government's major Title IV programs and 
higher education tax expenditures have been in place for many years 
and have changed incrementally over this time. Changes often affect 
all eligible students nationwide in the same way, which makes it hard 
to determine students' behavior in the absence of a change. Also, it 
is difficult to separate the effects of a change from larger social or 
economic events that can affect student outcomes. For example, using 
the introduction of the AOC in 2009 to measure the effects of tax 
credits on student outcomes might be complicated by economic changes 
attributable to the national recession, which lasted through June of 
that year. Although capitalizing on the opportunities substantive 
changes provide for evaluative research can be challenging, recent 
changes in Title IV aid and higher education tax expenditures--such as 
the introduction of the AOC in 2009--could provide the needed 
variation to conduct evaluations of these programs. 

Researchers can in some cases mitigate such challenges through the use 
of various statistical techniques and research designs. For example, 
program administrators can create experiments in which individuals are 
randomly divided into a treatment group that is subject to a change in 
benefits and a control group that is not. Short of such efforts by 
federal agencies to create experiments in partnership with the higher 
education community, substantive changes, including the introduction 
and expiration of federal programs and tax provisions, are among the 
most viable opportunities for evaluative research. For example, one 
researcher used the introduction of unsubsidized Stafford loans in 
1992, which extended federal loans to previously ineligible families, 
to estimate the effects of student loans on attendance.[Footnote 47] 

Education Has Taken Steps to Address Research Limitations: 

Education's efforts to sponsor and undertake research into the effects 
of Title IV aid represent an important step, but research available at 
present still lacks evaluative information on the effects of federal 
grants, loans, and work-study. Education has taken steps to sponsor 
research into the effects of student aid programs. In 2006, 
Education's Institute of Education Sciences (IES) funded the National 
Center for Postsecondary Research with a grant of about $9.8 million. 
The center conducts research on the effectiveness of programs designed 
to reduce barriers to higher education and improve student outcomes 
such as attendance, persistence, and completion. In 2011, IES funded 
the Center for Analysis of Postsecondary Education and Employment with 
a grant of about $10 million to conduct research on labor market 
outcomes for higher education students, including ongoing research 
into the effects of Federal Work-Study on students in Florida. 
[Footnote 48] IES has also awarded a number of grants funding research 
into, among other things, efforts to increase access to, persistence 
in, and completion of higher education. Although these steps have not 
resulted in published research evaluating the effects of federal 
assistance on student outcomes, they have resulted in a number of 
published and ongoing studies, including experimentation with efforts 
to simplify the application process for Title IV aid[Footnote 49] and 
encourage savings for higher education,[Footnote 50] and research into 
the effects of state and local financial aid programs.[Footnote 51] 

In addition to sponsoring research, Education has also taken steps to 
directly undertake experimental research in partnership with the 
higher education community. The Secretary of Education has flexibility 
to grant higher education institutions waivers from federal 
requirements in order to test alternate methods for administering 
Title IV programs.[Footnote 52] Using this flexibility, Education is 
soliciting participation in an Experimental Site Initiative that will 
allow participating institutions to set up evaluations including 
random experiments to test, among other things, specific aspects of 
the Pell Grant and Stafford Loan programs. For example, Education is 
inviting institutions to set up an experiment to test whether allowing 
low-income students who have a bachelor's degree to receive a Pell 
Grant in order to complete vocational training would reduce 
unemployment.[Footnote 53] 

Education's efforts to date have not resulted in direct evidence of 
Title IV aid's effect on student outcomes.[Footnote 54] Although 
policymakers may in some cases be able to draw on lessons learned from 
studies of nonfederal aid programs, state and institutional aid 
programs are different from federal programs in important ways--such 
as the types of incentives they offer and the requirements they make 
of students--that make direct comparisons difficult. While Education's 
initiatives to conduct experimental research in conjunction with 
institutions of higher education may provide insights into specific 
aspects of Title IV programs, these initiatives are fairly narrow in 
scope due in part to both limitations in Education's authority to 
waive Title IV provisions and in the level of resources Education 
officials told us they devote to such experimentation. As a result, 
these initiatives are unlikely to yield broadly applicable lessons 
about the effects of Title IV aid on student attendance, choice, 
persistence, or completion. Recent and future substantive changes to 
Title IV grants and loans may represent valuable opportunities to 
study the effects of these programs, but Education officials told us 
they have not have not sponsored or conducted such research. 

We have long recommended greater scrutiny of tax expenditures, 
[Footnote 55] as tax expenditures and their relative contributions 
toward achieving federal missions and goals are often less visible 
than spending programs, which are subject to more systematic review. 
To date, IRS and Treasury have not conducted studies on the effects of 
tax expenditures, and have no plans to do so. Also IRS officials 
stated that their focus is on administering programs as opposed to 
evaluating their effectiveness. 

Factors That Contribute to the Effectiveness and Efficiency of Federal 
Higher Education Assistance Programs: 

The challenges that students and families face in planning for and 
choosing among federal higher education benefits and that researchers 
face in determining the impact of federal higher education assistance 
on student outcomes, raise questions about the effectiveness and 
efficiency of federal higher education assistance programs and the 
potential for improving them. In this challenging fiscal climate, 
policymakers face difficult choices in allocating limited resources 
among multiple programs. In response to these issues, we identified 
factors that contribute to effective and efficient higher-education 
assistance programs and developed a framework of questions to help 
assess whether programs incorporate these elements in their design. 
[Footnote 56] 

This framework can be used as a policy tool for considering 
improvements to current programs, consolidating programs, eliminating 
programs, or designing features of new programs (table 3). It guides 
the user to think strategically about both program design and 
implementation. Some of the questions raised in the framework may be 
difficult to answer completely, but are important to analyze and 
consider. For example, determining whether the program has clearly 
defined purposes may yield different results as policymakers modify 
the program over time. A few concepts appear in multiple places within 
the framework, highlighting the importance of certain program 
characteristics. For example, the timing of the assistance, and 
information provided about it, may influence whether students seek out 
the aid at all and whether they use it to inform their decisions about 
attendance. Timing is also a factor in how effectively the program 
interacts with other federal assistance--Title IV programs tend to 
provide benefits while the student is enrolled in school and tax 
expenditures cover a range of timeframes. The examples below provide 
an illustration of how each factor is relevant to federal higher 
education assistance programs. The examples indicate how considering 
each factor could help improve a program or policy scenario, but they 
are not intended to be specific suggestions. 

Table 3: GAO Framework for Evaluating Federal Higher Education 
Assistance Programs: 

Factors: Achieves program goals and produces demonstrable results[A]; 
Key questions: 
1. Does the program have clearly defined and measurable goals or 
objectives? 
a. If so, do the program's stated goals reflect the current objectives 
of various policymakers and practitioners? 
b. If not, what should be the goals and objectives of the program? 
2. To what extent does the program produce benefits that are timely 
and sufficient to achieve its purpose, e.g., encouraging choice, 
attendance, persistence, and completion? 
3. Does the program produce long-term results for the individual, 
institutions, and society? 
Example: Considering the program's purpose may help align the 
structure or features of the program with intended outcomes. For 
example, if the purpose of a given program is to encourage students to 
attend school in the first place, the program could be designed to 
maximize benefits in the first years of school. Because education is a 
long-term investment, considering how the program's benefits are 
distributed to different groups across time could help in assessing 
whether and how well the program produces benefits. 

Factors: Provides appropriate incentives for targeted populations; 
Key questions: 
4. Is it clear what behaviors the program is designed to incentivize? 
5. Is it clear what population the program is designed to target? 
6. Does the program provide appropriate incentives to individual 
students who are likely to change their behavior? 
7. Are there disincentives associated with the program that adversely 
affect individuals' participation, such as the risk of debt and 
default for those participating in federal student loan programs? 
8. Does the program reasonably address how different populations may 
respond to incentives, such as the different responses that 
independent and dependent students may have? 
8. To what extent does the program minimize "windfalls," i.e., 
rewarding beneficiaries for activities that they would have undertaken 
without the aid? 
Example: Some programs target assistance to students and families with 
specific income ranges, while others distribute benefits to a broader 
range of incomes. Considering these key questions can help clarify 
whether a given program is meant, for example, to target low-income 
students and incentivize them to complete school, or whether the 
program is meant to help students from all income levels to complete 
school. This can inform decisions about the distribution of assistance 
and allocation of resources. 

Factors: Facilitates use of the program by beneficiaries; 
Key questions: 
10. Does the program provide sufficient and timely information to make 
students and families aware of the assistance available and manage 
expectations? 
a. Can families obtain timely and reliable estimates of how much 
assistance they are eligible to receive? 
b. Does the program provide sufficient guidance so that families can 
make informed and appropriate decisions about college attendance and 
financing their postsecondary education? 
c. Do students and families understand whether and how the program 
interacts with other programs? 
11. How do the procedures for accessing and using the program affect 
individuals' participation? For example, is the application process 
simple enough to understand and complete? 
12. Does the timing of the assistance facilitate participation in the 
program? 
Example: The administration of a program can affect the public's 
ability to take advantage of benefits for which they may be eligible. 
For example, researchers have raised questions about the length and 
complexity of the application process for Title IV aid and whether the 
FAFSA could be simplified. In addition, tax filers face challenges in 
selecting the best choice from among the numerous tax expenditures 
available for higher education. Considering whether the design and 
administration of these tax programs are user-friendly may help 
determine how to minimize confusing choices and provide further 
guidance to facilitate program use. 

Factors: Interacts effectively with other programs; 
Key questions: 
13. To what extent does the program effectively complement other 
programs, in terms of incentives created, populations served, reducing 
the cost of attendance, and the timing of the assistance? 
Example: It is important to consider how programs function together to 
assist students with the costs of higher education. For example, 
students and families generally receive Title IV benefits early in the 
school year, and tax benefits toward the end. Considering how programs 
interact could also help avoid duplication, for example, by 
incorporating provisions similar to current rules that prevent double 
dipping. Additionally, identifying whether multiple programs serve 
similar needs for similar populations could help in redesigning 
programs to reduce overlap or fragmentation. 

Factors: Minimizes costs and risks; 
Key questions: 
14. Does the design of the program reasonably and appropriately 
address costs and risks (e.g., the compliance burden placed on 
individuals or the risk of fraud) to the individual, institutions, and 
society? 
15. Can the program produce its benefit while minimizing 
administrative, compliance, budget, and tax revenue costs? 
16. Does the program incorporate safeguards to protect against fraud, 
waste, abuse, and mismanagement? 
Example: Addressing issues of cost and risk can help protect taxpayer 
funds and improve efficiency. Different mechanisms of providing higher 
education assistance may involve different costs and risks. For 
example, student loans must be repaid and therefore may come at a low 
cost to the government and a high cost to the individual. However, the 
risk of loan default is borne by the government and taxpayers. 

Factors: Establishes monitoring and evaluation mechanisms; 
Key questions: 
17. To what extent does the program establish mechanisms for 
continuous monitoring and periodic evaluations? 
18. How does the program's performance compare with similar programs, 
particularly with regard to efficiency and effectiveness? 
19. Is it clear which entities are responsible for collecting data and 
evaluating the program? 
20. Are the data necessary for evaluation available on a continuous or 
timely basis? 
Example: Performance measurement and program evaluation help agencies 
assess the impact of their programs and learn how to improve results. 
Considering whether programs have sufficient mechanisms for this would 
help to determine the need for a new or revised performance monitoring 
mechanism or data collection process to analyze program performance in 
relation to its objectives. In the case of a new program, considering 
whether to establish these mechanisms at the outset would create 
opportunities for evaluating the program in future years. 

Source: GAO. 

Note: Programs include federal assistance through Title IV grants, 
loans, and work-study, and tax expenditures directed at future, 
current, and past education expenses. 

[A] The first factor, Achieves program goals and produces demonstrable 
results, can be assessed at the program level and also underlies many 
of the key questions under other factors. Generally, the other factors 
are most relevant at the individual level, such as changing 
individuals' behavior or minimizing costs and risk to the individual. 

[End of table] 

This framework can help shed light on how well a program is designed 
and how well it functions. The user should consider which issues in 
the framework are most applicable when considering the design or 
implementation of a given program. While this framework focuses on 
characteristics of federal higher education assistance programs, it 
may also provide insight on other policy areas. 

Conclusions: 

Higher education tax provisions should be transparent and 
understandable. Students and families need sufficient and timely 
information on these provisions to ensure they are aware of their 
eligibility and understand how to claim the tax benefits. The multiple 
higher education tax expenditures available to help offset current 
education expenses fall short of this principle in that tax filers 
must be aware that they are eligible to claim tax expenditures and 
understand the provisions' eligibility requirements as well as the 
interaction of those provisions. Identifying the key characteristics 
of filers who appear eligible for higher education tax expenditures 
but fail to claim them could provide important information on why some 
filers are not claiming these benefits. While IRS and Education have 
taken steps in providing information to students and families, 
developing a coordinated and comprehensive strategy that seeks to 
better inform eligible students could improve eligible taxpayers' take-
up of these programs. Without such information, some tax filers will 
continue to fail to maximize their tax benefit--in some cases forgoing 
hundreds of dollars in benefits. 

Evaluative research on the effects of federal assistance for higher 
education continues to be limited. Without this kind of research, 
policymakers will be challenged to make fact-based decisions on the 
merits and value of various federal assistance efforts. While 
methodological and data limitations pose considerable obstacles to 
conducting evaluative research on these federal programs, program 
administrators and researchers have shown that it is possible to take 
advantage of changes in Title IV programs and tax expenditures to 
conduct evaluative research. In an environment of constrained budgets, 
evaluative research can help inform decisions to build on successful 
programs and make changes to less effective programs. 

Recommendations for Executive Action: 

To help ensure individuals who are eligible to claim a higher 
education tax expenditure are aware of their eligibility and the 
benefit they may receive, we recommend that the Commissioner of 
Internal Revenue and the Secretary of Education work together to: 

* identify characteristics of tax filers who are not claiming a higher 
education tax expenditure when they appear to be eligible for one and 
possible reasons for this, and: 

* use this information to identify strategies to improve information 
provided to eligible students and families. 

To provide federal policymakers information on the relative 
effectiveness of Title IV programs and higher education tax 
expenditures, we recommend the Secretary of Education take advantage 
of opportunities presented by recent and anticipated substantive 
program changes to sponsor and conduct evaluative research into the 
effectiveness of Title IV programs and higher education tax 
expenditures at improving student outcomes. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Secretary of Education, 
Secretary of the Treasury, and the Commissioner of Internal Revenue 
for comment. In written comments, reproduced in appendix IV, Education 
agreed with our two recommendations. Education noted that it does not 
currently have jurisdiction over or access to tax data to determine 
which filers may be eligible for tax benefits but have not claimed 
such benefits, or their reasons for not claiming such benefits. 
Education said that after IRS identifies such individuals, Education 
will work with IRS to explore how Education may assist with outreach 
to these individuals and further disseminate information on tax 
expenditures to assist students and their families. Education also 
recognized the need for more research into the effects of federal 
assistance for higher education and said it will determine whether 
additional data can be made available to support such research. 

With respect to Education's access to taxpayer data, our 
recommendation was not meant to imply that Education should have 
access to taxpayer data or that IRS could disclose taxpayer data to 
Education without authorization in Section 6103 of the Internal 
Revenue Code. Rather, the recommendation was meant to suggest other 
means by which Education and IRS can coordinate in their efforts to 
provide information on higher education tax benefits to eligible 
students and families. 

In written comments, reproduced in appendix V, IRS agreed with our 
recommendation to identify characteristics of taxpayers claiming sub-
optimal benefits and devise strategies to improve the information 
available to them. IRS noted that improved clarity around higher 
education tax benefits can assist taxpayers in determining which 
provisions will yield the greatest benefit. IRS also stated that the 
nuances of each taxpayer's situation affecting their eligibility for 
education credits or deductions are not evidenced by information 
reported on their tax return or by information reported by educational 
institutions on Form 1098-T, Tuition Statement. For this reason, IRS 
considered education and outreach effective means of addressing this 
issue. IRS stated that it is taking steps to simplify the decision-
making process faced by taxpayers by revising Form 8863, Education 
Credits (American Opportunity and Lifetime Learning Credits) to use a 
series of questions for the taxpayers to ascertain eligibility on a 
per-student basis. 

Treasury and Education provided technical comments on our draft 
report, which we incorporated as appropriate. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to the 
Secretary of Education, the Secretary of the Treasury, and the 
Commissioner of Internal Revenue. In addition, the report will be 
available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact James R. White at (202) 512-9110 or George A. Scott at (202) 
512-7215. You may also reach us by email at whitej@gao.gov or 
scottg@gao.gov. Contact points for our Offices of Congressional 
Relations and Public Affairs may be found on the last page of this 
report. GAO staff who made key contributions to this report are listed 
in appendix VI. 

Signed by: 

James R. White: 
Director, Strategic Issues: 

Signed by: 

George A. Scott: 
Director, Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Objectives and Scope: 

This appendix describes our methodology for addressing the following 
objectives: (1) describe the size and distribution of federal grants, 
loans, and tax expenditures available to assist students and families 
with higher education expenses; (2) assess the extent to which tax 
filers select higher education provisions that maximize their tax 
benefit; (3) summarize what is known about the effect of grants, 
loans, and tax expenditures on student attendance, choice, 
persistence, and completion; and (4) describe factors that contribute 
to the effectiveness and efficiency of federal higher education 
student assistance programs. 

To address these objectives, we reviewed federal student aid--
including grants, loans, and work-study--authorized under Title IV of 
the Higher Education Act of 1965, as amended, and tax expenditures--
reductions in federal tax liabilities that result from provisions in 
the tax code such as tax credits, deductions, exemptions, and tax-
preferred savings programs. We selected Title IV programs that served 
more than 500,000 participants in school year 2007-2008. We excluded 
Academic Competitiveness Grants and the National Science & Mathematics 
Access to Retain Talent Grants because these programs expired at the 
end of fiscal year 2011. We selected tax expenditures that: (1) are 
designed to help students and their families save for, pay current 
expenses, or repay expenses for higher education; (2) have eligibility 
requirements that are not based on criteria other than income or 
higher education expenses; (3) were available in tax years 2006-2009; 
and (4) had more than 50,000 tax filers claim the benefit in 2009. We 
did not include the tax exclusion for scholarships and fellowships, 
which may include awards based upon scholastic achievement or promise. 
We selected these years because they were the most recent years data 
that were available. Appendix II summarizes Title IV aid and higher 
education-related tax expenditures, including those not reviewed in 
this report. 

Methodology: 

To describe the size and distribution of Title IV aid and higher 
education tax expenditures, we analyzed data from the U.S. Department 
of Education (Education), Internal Revenue Service (IRS), and the 
Board of Governors of the Federal Reserve System (Federal Reserve). We 
also reviewed statutes, regulations, and guidance relevant to federal 
student aid and tax expenditures. Our analysis of data from 
Education's 2007-2008 National Postsecondary Student Aid Study 
(NPSAS), IRS's 2006-2009 Statistics of Income (SOI) individual tax 
return file, and the Federal Reserve's 2007 Survey of Consumer 
Finances (SCF) are subject to sampling errors because these data sets 
are based on samples. Because NPSAS, the SOI files, and SCF follow a 
probability procedure based on random selections, they represent only 
one of a large number of samples that could have been drawn. Since 
each sample could have provided different estimates, we express our 
confidence in the precision of our particular sample's results as a 95 
percent confidence interval (e.g., plus or minus 2.5 percentage 
points). This is the interval that would contain the actual population 
value for 95 percent of the samples we could have drawn. Unless 
otherwise noted, all percentage estimates based on the SOI and NPSAS 
have 95 percent confidence intervals that are within 10 percentage 
points of the estimate itself, and all numerical estimates other than 
percentages have 95 percent confidence intervals that are within 10 
percent of the estimate itself. The 95 percent confidence intervals 
for all SCF estimates are provided along with the estimates in table 
notes or footnotes. We also reviewed studies by GAO, the Congressional 
Budget Office, Congressional Research Service, Education, and the 
Department of the Treasury. 

The 2007-2008 NPSAS, 2009 SOI, and 2007 SCF were the most recent data 
available at the time of our engagement. NPSAS is a comprehensive 
study that examines how students and their families pay for higher 
education. It includes nationally representative samples of 113,535 
undergraduates, 12,585 graduate students, and 1,581 first-professional 
students[Footnote 57] enrolled during the 2007-2008 academic year. The 
NPSAS data are based on administrative records and student interviews, 
and NPSAS includes survey results from both students who received 
financial aid and those who did not. The SOI individual tax return 
file is a stratified probability sample of income returns filed with 
IRS. The SOI sample of 230,364 returns represented approximately 140.5-
million tax returns filed for 2009. The SCF sample of 4,418 households 
represented approximately 116-million households in 2007. 

To estimate the number of households that hold Coverdell education 
savings accounts (ESA) or qualified tuition programs (also known as 
529 plans), we analyzed 2007 data from the Federal Reserve's SCF. This 
survey is conducted every 3 years to provide detailed information on 
the finances of U.S. households. The SCF collects detailed financial 
characteristics on an economically dominant single individual or 
couple (married or living as partners) in a household. For our 
analysis, we aggregated the financial information of these persons to 
obtain household-level financial information, including whether the 
household possessed a Coverdell ESA or 529 account and the balances of 
those accounts. We were unable to analyze Coverdell ESAs or 529 
accounts separately because SCF combines these into one variable. Our 
analysis does not incorporate possible changes in account trends due 
to the recession ending in June 2009, as the most recent survey data 
publicly available are for 2007. 

To assess the extent to which tax filers selected higher education tax 
provisions that maximized their tax benefit, we combined information 
from the SOI individual tax file with information from tax filers' 
Form 1098-T Tuition Statement.[Footnote 58] We then calculated which 
tax provision would maximize filers' tax benefit based on program 
eligibility criteria for tax year 2009. We calculated filers' tax 
benefit using the instructions on IRS Forms 1040 U.S. Individual 
Income Tax Return, 8917 Tuition and Fees Deduction, and 8863 Education 
Credits. Our analysis included the lifetime learning credit (LLC) and 
the tuition and fees deduction (tuition deduction). Details on these 
tax provisions' eligibility rules are included in appendix II. Our 
analysis did not consider whether a taxpayer who appeared to make a 
suboptimal choice by not claiming an LLC or tuition deduction did so 
to avoid being subject to alternative minimum tax liability.[Footnote 
59] 

Form 1098-T includes the student's name, address, social security 
number, and the education institution's federal identification number. 
Form 1098-T also indicates if students were graduate students and if 
they were enrolled at least half-time. Education institutions have the 
option of providing information on the payments they have received or 
the amounts billed for qualified tuition and related expenses. By 
combining information on the Form 1098-T with information on the tax 
return, we were able to identify the higher education student 
population in the SOI sample and the choices that tax filers made 
concerning education-related tax provisions. Because of data 
limitations, we were unable to assess whether a tax filers who 
selected an LLC or tuition deduction would have increased their tax 
benefits by selecting the AOC. Since the AOC is available only during 
a student's first 4 years of higher education, a student claiming the 
tuition deduction or the LLC may not be eligible for the AOC. 
Information on whether students are in their first 4 years of higher 
education is not included in the Form 1098-T. Our analysis may also be 
limited if institutions reported inaccurate information on Form 1098-T. 

We excluded tax returns where filers were ineligible to claim the 
tuition deduction or LLC. We excluded returns from filers that: 

* were claimed as a dependent on someone else's tax return; 

* filed using a married filing separately filing status; 

* used a Form 1040-EZ; 

* had (1) income that exceeded the program thresholds for the relevant 
tax year, (2) no taxable income, (3) no tax liability after claiming 
other tax credits, or (4) no net educational expenses after accounting 
for scholarships and grants as reported on the Form 1098-T; 

* received an education tax credit or tuition deduction but did not 
receive a Form 1098-T; and: 

* received a Form 1098-T with no information concerning students' 
education expenses because we could not analyze the corresponding tax 
returns without these data. We only used Form 1098-Ts that reported 
amounts paid in the current year. 

This limited our analysis of SOI data to approximately 10.3-million 
returns in 2009. Table 4 summarizes the percentage of returns we 
included in our suboptimal analyses. 

Table 4: Percentage of Returns Included in GAO's Analysis of 
Taxpayers' Maximizing Their Benefits in Tax Year 2009: 

Credit selected: Lifetime learning credit; 
Other option: Choosing the tuition and fees deduction; 
Percent of returns included in analysis[A]: 57%. 

Credit selected: Tuition and fees deduction; 
Other option: Choosing lifetime learning credit; 
Percent of returns included in analysis[A]: 35%. 

Credit selected: Selected no higher education credit or deduction; 
Other option: Choosing lifetime learning credit or the tuition and 
fees deduction; 
Percent of returns included in analysis[A]: 29%. 

Source: GAO analysis of IRS data. 

[A] The denominators for the first two rows are those returns that 
claimed the provision. For the "selected no credit or deduction" 
category, the denominator includes those returns with a Form 1098-T 
that appear to be eligible for either the credit or deduction. 

[End of table] 

In our analysis of taxpayers who would have reduced their liability by 
choosing a different tax benefit, in addition to using data from the 
1098-Ts, we also used data reported by the taxpayer elsewhere on their 
tax return. For example, for tax filers who claimed the tuition and 
fees deduction we used the expenses they reported on the Form 8917 to 
calculate their potential benefit from claiming the LLC. Using these 
expenses rather than expenses reported on 1098-Ts allowed us to 
directly compare the benefits by using the same expenses for a 
taxpayer. Relying on the amounts the taxpayer reported in claiming the 
tuition deduction or LLC should take into account expenses that cannot 
be used in claiming an education tax provision. These include expenses 
paid with tax-exempt assistance, such as the tax-exempt portion of a 
distribution from a Coverdell ESA or a 529 account, scholarship, 
grant, or employer assistance. 

Of the returns that we included in our analysis of taxpayers who 
claimed LLC but possibly could have reduced their tax liability by 
choosing the tuition deduction, 46 percent of the cases had expenses 
reported on the Form 8863 and 1098-T that were the same. Forty percent 
of the cases had a 1098-T with reported expenses that were larger than 
those the filer reported on the Form 8863. This is consistent with the 
idea that these taxpayers adjusted their education expenses to account 
for tax-exempt aid that cannot be used to claim a higher education tax 
provision. 

To estimate the effect state tax laws may have on the optimal choices 
of taxpayers filing their federal income taxes, we utilized the 
National Bureau of Economic Research's (NBER) TAXSIM Model, a 
microsimulation model of U.S. federal and state income tax systems. 
TAXSIM calculates estimated liabilities under U.S. federal and state 
income tax laws from actual tax returns prepared for public uses by 
the Statistics of Income Division of the Internal Revenue Service. 
[Footnote 60] 

To identify available academic research on the effects of Title IV aid 
programs and higher education tax expenditures within our research 
scope, we reviewed studies that examined whether the programs or tax 
expenditures affect college choice, attendance, persistence, and 
completion. We looked for these measures because they are utilized by 
academic researchers and administrators of student aid programs; they 
allow for comparison with past GAO literature reviews; and they have 
been the focus of congressional concern as expressed in requests for 
our work from Congress and a statutorily established study committee 
report. We searched literature published since 2005, when we published 
a similar literature review.[Footnote 61] We searched information 
sources such as EconLit, the NBER Web site, JSTOR, Social SciSearch, 
Education Research Information Center, Nexis, and ProQuest 
Dissertations & Theses. These online sources are nationally recognized 
databases that index research results. Our search terms included 
phrases such as "tax relief and education," "tuition and college," 
"financial aid and tuition," program names such as "American 
opportunity credit," and the names of authors included in our 2005 
literature review. 

Of the over 300 studies we identified, 12 studies met the following 
criteria: (1) provided original empirical data analyses according to 
professional standards of econometric analysis for their 
methodological rigor, (2) contained acceptably identified statistical 
estimates, or (3) are cited in studies by other researchers. We used 
the results of the studies that we judged to contain acceptably 
identified statistical estimates to form the basis of the findings 
about the availability of information concerning the relative 
effectiveness of major federal financial assistance programs. Because 
few studies met our criteria for evaluative research, we selected 
examples of studies on the effects of nonfederal student-aid programs 
to provide context for other forms of higher education studies that 
have been published. These included studies on the effects of state, 
regional, and institutional financial aid programs. Our selection of 
non-federal studies is not exhaustive. We also found related research 
on the responses of institutions of higher education to federal 
assistance. A bibliography of studies we reviewed is provided at the 
end of this report. 

For our fourth objective, we developed a framework to help identify 
factors that contribute to the effectiveness and efficiency of federal 
higher education programs. To develop the framework, we reviewed 
criteria from prior and ongoing GAO studies, as well as relevant work 
from other federal agencies. We informed and validated our framework 
by conducting semi-structured interviews with five academic experts in 
higher education and economic policy. We interviewed a small number of 
experts since the framework was developed using previous GAO reports. 
We selected experts based on their recognition in the professional 
community, the relevance of their published work on higher education 
assistance, demonstrated expertise in Title IV programs or tax 
expenditures, and others' recommendations. We also consulted with 
these experts to provide context for the challenges researchers face 
in studying the effects of federal assistance for higher education on 
college choice, attendance, persistence, and completion. 

Data Reliability and Audit Standards: 

To assess the reliability of the NPSAS, SOI, and SCF data we analyzed, 
we reviewed agency documentation and interviewed agency officials 
familiar with the data. We determined that these data were 
sufficiently reliable for our purposes. 

We conducted this performance audit from June 2011 to May 2012 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Descriptions of Title IV Programs and Higher Education-
Related Tax Expenditures: 

Tables 5 and 6 below provide descriptions of Title IV programs and 
higher education-related tax expenditures reviewed in this report. 

Table 5: Description of Federal Student Aid Programs Authorized under 
Title IV of the Higher Education Act: 

Title IV student aid program: Pell Grants; 
Program details: Grant amounts are based on the student's enrollment 
status and the difference between the expected family contribution and 
cost of attendance, up to the maximum Pell Grant allowed under the 
Higher Education Act; 
Annual award amounts (school year 2010-2011): For the 2010-2011 school 
years, undergraduates can receive from $555 to $5,550[A]. 

Title IV student aid program: Federal Supplemental Educational 
Opportunity Grants (FSEOG); 
Program details: Schools administer grant funds, which are awarded to 
undergraduate students with exceptional financial need, with a 
priority given to students who receive Pell Grants. Schools are 
generally required to match at least 25 percent of the federal funds 
allocated; 
Annual award amounts (school year 2010-2011): Undergraduates can 
receive up to $4,000 per year (up to $4,400 for students participating 
in an approved study-abroad program). The minimum award amount is $100. 

Title IV student aid program: Federal Work-Study; 
Program details: Schools administer federal funds and make part-time 
employment available to undergraduate, graduate and professional 
students with federally defined financial need. Participating schools 
or nonprofit employers generally contribute at least 25 percent of the 
student's earnings (50 percent in the case of for-profit employers); 
Annual award amounts (school year 2010-2011): No specific limits. Net 
earnings may not exceed the student's financial need[B]. 

Title IV student aid program: Federal Perkins Loans; 
Program details: Loans are made to undergraduate, graduate and 
professional students with priority given to those with exceptional 
financial need. Schools administer funds for the low-interest (5 
percent) loans, comprised of federal capital contributions and school 
matching funds (at least one-third of federal contributions). 
Repayment is made to the school; 
Annual award amounts (school year 2010-2011): Undergraduates can 
borrow up to $5,500 annually, up to a total of $11,000 for 
undergraduates who have not completed two academic years and $27,500 
for undergraduates who have completed two academic years; 
Graduate or professional students can borrow up to $8,000 annually, up 
to a total of $60,000, including loans borrowed as an undergraduate[C]. 

Title IV student aid program: Subsidized Direct Stafford Loans[D]; 
Program details: Loans are made on the basis of financial need to 
undergraduate, graduate and professional students who are enrolled at 
least half-time. The federal government pays the interest costs on 
subsidized loans while the student is in school, for a grace period of 
6 months after the student leaves school, and during subsequent 
periods if needed.[E]; 
Annual award amounts (school year 2010-2011): Undergraduate students 
can borrow between $3,500--the maximum available in their first year--
and $5,500 annually, up to a total of $23,000; 
Graduate or professional students can borrow up to $8,500 per year up 
to a total of $65,500. 

Title IV student aid program: Unsubsidized Direct Stafford Loans; 
Program details: Loans are made to undergraduate graduate and 
professional students who are enrolled at least half-time; 
Unlike subsidized Stafford Loans, students are responsible for 
interest costs throughout the life of the loan. Annual and aggregate 
borrowing limits for unsubsidized Stafford Loans include any 
subsidized Stafford Loans taken by the student; 
Annual award amounts (school year 2010-2011): Undergraduate students 
and graduate or professional students can borrow between $5,500 and 
$20,500 annually, depending on their year of schooling and dependent 
status (including any subsidized loan amounts received for the same 
period); Aggregate limits are $31,000 for dependent undergraduate 
students, $57,500 for independent undergraduate students, and $138,500 
for graduate or professional students; Students completing coursework 
in certain health professions can borrow an additional amount between 
$12,500 and $26,667 annually, up to a total of $224,000[F]. 

Title IV student aid program: Parent Loans for Undergraduate Students 
(PLUS) Loans; 
Program details: Loans are made to parents of dependent undergraduates 
and to graduate and professional students who are enrolled at least 
half-time. Borrowers are subject to a credit check for adverse credit 
history and may be denied a loan. Borrowers are responsible for paying 
all interest on the loan; 
Annual award amounts (school year 2010-2011): There are no fixed 
annual or aggregate loan limits for PLUS loans. Parents, graduate 
students, and professional students can borrow up to the cost of 
attendance minus any financial aid the student receives. 

Source: GAO analysis of applicable federal laws, regulations, and 
Education guidance. 

[A] The maximum annual Pell Grant award has increased over $1,000 
since school year 2007-2008, with the largest increase occurring in 
school year 2009-2010, when the annual maximum Pell Grant Award 
increased by over $600. Additionally, under the Student Aid and Fiscal 
Responsibility Act, part of the Health Care and Education 
Reconciliation Act of 2010,(Pub. L. No. 111-152, Title II, Subtitle A) 
the maximum EFC for Pell Grant eligibility increased in school year 
2010-2011. 

[B] Student's gross earnings can exceed the student's financial need 
by the amount of taxes and job-related expenses the student pays. 

[C] Perkins loan limits were increased by the Higher Education 
Opportunity Act of 2008, Pub. L. No. 110-315. 

[D] The Student Aid and Fiscal Responsibility Act terminated the 
authority to make new Federal Family Education Loans as of July 2010. 

[E] Borrowers can temporarily suspend repayment of their loans if for 
example they pursue additional higher education studies, provide 
military service, or experience economic hardships. 

[F] In the Deficit Reduction Act of 2005, Pub. L. No. 109-171, 
Congress increased Stafford loan limits for school year 2007-2008--the 
first such increase since school year 1993-1994--in order to help 
students finance higher education amid concerns about high tuition 
rates. For undergraduates, the higher limits reflected an increase of 
between $875 and $1,000 depending on the undergraduate's class level, 
dependency status, and whether the student was receiving a subsidized 
or an unsubsidized loan. Congress increased Stafford loan limits more 
recently in the Ensuring Continued Access to Student Loans Act of 
2008, Pub. L. No. 110-227. 

[End of table] 

Table 6: Description of Selected Higher Education Tax Expenditures 
(Tax Year 2010): 

Tax expenditure: American opportunity credit; 
Eligibility: Tax filer on behalf of self, spouse, or dependent who: 
(1) for at least one academic period during the tax year, is working 
toward an undergraduate degree, certificate or other recognized 
education credential; (2) is enrolled at least half-time for at least 
one academic period that begins during the tax year; (3) has not 
completed the first four years of higher education (including any 
year(s) Hope credit was claimed); and; (4) has not been convicted of a 
federal or state felony offense for possession or distribution of a 
controlled substance; 
Income ranges for phasing out benefits[A]: Single filer: $80,000-
$90,000; Joint return: $160,000-$180,000; 
Eligible expenses: Tuition, fees and required course materials[B]; 
Tax benefit: Maximum credit: $2,500 per each eligible student. Credit 
rate is 100 percent on first $2,000 of qualified education expenses 
and 25 percent on the next $2,000; 
Forty percent of credit may be refundable as long as the student is 
not a child whose income is subject to the "kiddie" tax[C]. 

Tax expenditure: Lifetime learning credit; 
Eligibility: Tax filer on behalf of self, spouse or dependent who is 
enrolled in a course that is part of a higher education degree program 
or taken by the student to acquire or improve job skills.[D] Credit is 
available for one or more courses at an eligible institution and there 
is no limit on the number of years the credit can be claimed; 
Income ranges for phasing out benefits[A]: Single filer: $50,000-
$60,000; Joint return: $100,000-$120,000; 
Eligible expenses: Tuition and fees required for enrollment; 
Tax benefit: Maximum credit: $2,000 per return (20 percent of the 
first $10,000 of qualified education expenses); 
Nonrefundable credit limited to the amount of tax paid on taxable 
income. 

Tax expenditure: Tuition and fees deduction[E]; 
Eligibility: Tax filer on behalf of self, spouse or dependent who is 
enrolled in one or more courses at an eligible educational institution; 
Income ranges for phasing out benefits[A]: Single filer: $65,000-
$80,000; Joint return: $130,000-$160,000; 
Eligible expenses: Tuition and fees required for enrollment; 
Tax benefit: Maximum deduction: $4,000 per return for single filers 
whose modified adjusted gross income does not exceed $65,000 ($130,000 
for joint filers); $2000 per return for single filers whose modified 
adjusted gross income is more than $65,000 but does not exceed $80,000 
(more than $130,000, but does not exceed $160,000 for joint filers). 

Tax expenditure: Student loan interest deduction; 
Eligibility: Tax filer on behalf of self, spouse or dependent. Student 
must have been enrolled at least half-time in a program leading to a 
degree, certificate or other recognized educational credential[F]; 
Income ranges for phasing out benefits[A]: Single filer: $60,000-
$75,000; Joint return: $120,000-$150,000; 
Eligible expenses: Eligible loans are those used to pay for tuition, 
fees, room and board, books, supplies and equipment, and other 
necessary expenses (e.g., transportation); 
Tax benefit: Maximum deduction: $2,500 interest paid on eligible 
education loans. 

Tax expenditure: Section 529 qualified tuition programs (QTP); 
Eligibility: For use by designated beneficiary. No eligibility 
requirements but withdrawals must be used for qualified higher 
education expenses at an eligible educational institution. QTPs are 
established and maintained by states or higher education institutions 
and eligibility for enrollment varies by program; 
Income ranges for phasing out benefits[A]: No income limits; 
Eligible expenses: Tuition, fees, books, supplies, and equipment if 
required for enrollment or attendance. Expenses paid to purchase 
computer technology or Internet access in 2009 or 2010. Room and board 
if enrolled at least half-time; 
Tax benefit: No tax is due on a distribution from an account unless 
the amount distributed is greater than the beneficiary's adjusted 
qualified education expenses; Contributions cannot be more than the 
amount necessary for the qualified education expenses of the 
beneficiary[G]. 

Tax expenditure: Coverdell education savings accounts (ESA); 
Eligibility: Beneficiary must be under age 18 or be a special needs 
beneficiary when the account is established and when any contributions 
are made; Account must be closed within 30 days after the earlier of 
the beneficiary reaching age 30, unless it's a special needs 
beneficiary, or the beneficiary's death; 
Income ranges for phasing out benefits[A]: For contributions: single 
filer: $95,000-$110,000; Joint returns: $190,000-$220,000; 
Eligible expenses: Tuition, fees, books, supplies, and equipment if 
required for enrollment or attendance. Room and board if enrolled at 
least half-time; 
Tax benefit: No tax is due on a distribution from an account unless 
the amount distributed is greater than the beneficiary's adjusted 
qualified education expenses[H]; Total annual contribution limit is 
$2,000 per beneficiary from all sources (through age 17 unless he or 
she is a special needs beneficiary). 

Tax expenditure: Parental personal exemption for students ages 19-23; 
Eligibility: Tax filer can claim an exemption for a dependent who is a 
child ages 19 through 23 and a full-time student at least five months 
of the year. Other dependency tests must also be met; 
Income ranges for phasing out benefits[A]: No income limits; 
Eligible expenses: N/A; 
Tax benefit: Taxpayer is allowed an exemption of $3,650 per dependent. 

Tax expenditure: Earned Income Tax Credit for students ages 19-23; 
Eligibility: Tax filer with earned income and a qualifying child who 
is ages 19 through 23 and a full time student at least 5 months of the 
year can claim a larger EITC.[I] Other requirements must also be met; 
Income ranges for phasing out benefits[A]: Tax filer's adjusted gross 
income must be less than: Single filer: 
$43,352 (if 3 or more qualifying children); 
$40,363 (if 2 qualifying children); 
$35,535 (if 1 qualifying child; 
Joint returns: 
$48,362 (if 3 or more qualifying children); 
$45,373 (if 2 qualifying children); 
$40,545 (if 1 qualifying child); 
Eligible expenses: N/A; 
Tax benefit: Maximum credit: 
$5,666 with 3 or more qualifying children; 
$5,036 with two qualifying children; 
$3,050 with one qualifying child; 
Credit is refundable. 

Source: GAO analysis of the Internal Revenue Code, Treasury 
regulations, and applicable IRS guidance. 

[A] Unless otherwise noted, amounts refer to modified adjusted gross 
income, which is the taxpayer's adjusted gross income increased by 
amounts which were excluded as foreign income or income from Puerto 
Rico or other U.S. Territories. 

[B] Course materials mean books, supplies, and equipment needed for a 
course of study whether or not the materials are purchased from the 
educational institution as a condition of enrollment or attendance. 

[C] You do not qualify for a refund if (1) you were (a) under 18 at 
the end of the tax year; or (b) 18 at the end of tax year and your 
earned income was less than one-half of your support, or (c) a full 
time student over 18 and under 24 at the end of the tax year and your 
earned income was less than one-half of your support; (2) at least one 
of your parents was alive at the end of the tax year; and (3) you are 
filing as a single filer, head of household, qualifying widow(er) or 
married filing separately for 2010. 26 U.S.C. § 25A(i)(6); 26 U.S.C. § 
1(g); see also IRS Publication 970. 

[D] Student does not need to be pursuing a degree or other recognized 
education credential. 

[E] The tuition deduction expired December 31, 2011 and as of May 10, 
2012, has not been extended. 

[F] Includes graduate school. 

[G] Contributors are permitted to contribute to both a Section 529 
program and Coverdell ESA account in the same year for the same 
designated beneficiary. 

[H] Beneficiary must pay taxes on distributions in excess of qualified 
education expenses for the year. Beneficiary must pay a 6 percent 
excise tax each year on excess contributions (more than $2000 per 
year) in the account at end of the year. 

[I] Tax filers do not need a qualifying child to claim the EITC 
provided other rules are met. 

[End of table] 

While the Hope credit was not available in 2010, our analysis of tax 
expenditures from 2006 to 2009 includes this credit. The American 
opportunity credit replaced the Hope credit for most taxpayers in 
2009. However, a larger Hope credit (up to $3,600) was available for 
students in 2008 and 2009 who attended an eligible institution in a 
Midwestern disaster area and met other eligibility requirements. 

We did not review the following higher education tax expenditures in 
this report: 

Education Savings Bond Program. Tax filers may exclude the tax due on 
interest accrued on qualified U.S. savings bonds if the interest is 
used to pay for qualified education expenses and other eligibility 
criteria are met. 

Education Exception to Additional Tax on Early IRA Distributions. 
Generally, taxpayers must pay an additional 10 percent tax on 
distributions from IRA accounts before they reach age 59½. However, if 
taxpayers use these distributions for qualified higher education 
expenses, they may not have to pay the 10 percent additional tax. 

Scholarships, Fellowships, Grants, and Tuition Reductions. 
Scholarships and fellowships received by degree-candidate students at 
eligible educational institutions and used to pay for tuition, fees, 
books, supplies, and equipment required for enrollment are not taxed 
as income. Pell Grants and other Title IV need-based education grants 
are treated as scholarships for tax purposes. Tuition reductions, 
where tax filers are allowed to study tuition free or for a reduced 
rate, are not counted as income for tax purposes provided certain 
requirements are met. The rules for determining whether a tuition 
reduction is tax free depend on whether the education provided is 
below the graduate level or is graduate education. 

Employer-Provided Educational Assistance. Tax filers who receive 
educational assistance benefits from their employers under an 
educational assistance program do not have to count a certain amount 
of that assistance as income for tax purposes.[Footnote 62] Only funds 
used to pay for tuition, fees, books, equipment, and similar expenses 
are tax-free. 

Student Loan Cancellations and Repayment Assistance. Tax filers whose 
student loans are canceled or who receive repayment assistance in 
exchange for working for a certain period of time, in certain 
professions, and for any of a broad class of employers may qualify for 
tax-free treatment of canceled loan or repayment assistance. 

Business Deduction for Work-Related Education. Tax filers may deduct 
the cost of work-related education as business expenses if the 
education meets one of the following tests: 1) the education is 
required by the tax filer's employer or the law to maintain the tax 
filer's present salary, status, or job; or 2) the education maintains 
or improves skills needed in the tax filer's present work. Deductible 
expenses include tuition, books, supplies, lab fees, certain 
transportation and travel costs and other education expenses. 

Gift Tax Educational Exclusion. Tuition paid directly to a qualifying 
education institution for another person as a gift is not a taxable 
gift. No exclusion is allowed for amounts paid for books, supplies, 
room and board, or other expenses that are not direct tuition costs. 

[End of section] 

Appendix III: Text to Accompany Interactive Figures 1, 2, 6, 7, and 8: 

Table 7: Text to Accompany Interactive Figure 1: Illustration of 
Planning and Payment Processes for Higher Education Expenses: 

Before college: 
Birth through senior year of high school: Parents make financial 
planning decisions for future educational expenses. For example, 
parents decide whether to invest in tax-preferred savings plans; 
During college: Each academic year: (Repeats until end of college); 
Student or parents track expenses they can use toward education-
related tax provisions; 
After college: Monthly: Student or parents repay federal student loans. 

Senior year of high school: 
Fall through spring: 
1. Student applies to college; 
2. College receives application and admits student; 
January through March: 
1. Student or parents receive information returns (such as a W-2 Wage 
and Tax Statement) that help complete their individual tax return; 
2. Student or parents file a tax return by April; 
3. Student or parents complete a Free Application for Federal Student 
Aid (FAFSA) using information from their income tax return and other 
sources[A]; 
4. Education processes FAFSA to calculate the family's expected family 
contribution (EFC) and reports the EFC to the student and schools; 
March through April: 
Student learns aid eligibility; [Eligibility notification period]; 
During college: 
August: 
1. Student or parents begin paying tuition for fall semester; 
2. Student or parents use financial aid package (tax-preferred saving, 
grants, and loans) and other savings to pay for college expenses; 
January through March: 
Student or parents receive information returns that help them complete 
their individual tax return. For example, student or parents receive a 
1098-T Tuition Statement. The 1098-T may not have all the information 
needed to claim education tax provisions; 
January through April 15th: On or before April 15th, Student or 
parents file an individual income tax return (i.e., a 1040) with 
supporting forms if claiming an education tax credit or tuition 
deduction; [Eligibility notification period]; 
After college: 
January: 
Student or parents receive a 1098-E Student Loan Interest Statement; 
January through April 15th: 
Student or parents claim the student loan interest deduction on 
individual income tax return. 

Sources: GAO (information); Digital Vision (photo). 

Notes: This graphic provides one example of the timing for financial 
aid, tax, and loan repayment decisions. The process may differ for 
nontraditional students. For example, students who attend school less 
than half time or at times other than the fall through spring 
semesters may make decisions and payments at times other than those 
depicted in this illustration. Also, individuals other than parents--
such as legal guardians--may be involved in financial aid and tax 
decisions. 

FAFSA deadlines vary by state, and the Department of Education Web 
site often directs students to contact their financial aid 
administrator for deadlines. Each college within a state may also have 
a different deadline. For 2011-2012, the federal deadline is June 30, 
2012. 

[A] Some education institutions may require a FAFSA before families 
have filed a tax return. 

[End of table] 

Table 8: Text to Accompany Interactive Figure 2: Size and 
Characteristics of Title IV Aid Programs and Higher Education Tax 
Expenditures: 

Pell Grants: 
School Year 2007-2008; 
Total grants awarded: 5.7 million; 
Total dollars awarded: $14.6 billion; 
Average grant award: $2,559; 
Median income of recipients: $18,128. 

Federal Supplemental Educational Opportunity Grants (FSEOG): 
School Year 2007-2008; 
Total grants awarded: 1.3 million; 
Total dollars awarded: $883.7 million; 
Average grant award: $696; 
Median income of recipients: $15,806. 

Federal Work-Study: 
School Year 2007-2008; 
Total awards: 1.6 million; 
Total dollars awarded: $4.0 billion; 
Average award: $2,461; 
Median income of recipients: $44,045. 

Federal Perkins Loans: 
School Year 2007-2008; 
Total loans made: 674,700; 
Total face value of loans: $1.5 billion; 
Average loan amount: $2,230; 
Median income of recipients: $31,939. 

Subsidized Direct Stafford Loans: 
School Year 2007-2008; 
Total loans made: 7.4 million; 
Total face value of loans: $29.6 billion; 
Average loan amount: $3,972; 
Median income of recipients: $30,286. 

Unsubsidized Direct Stafford Loans: 
School Year 2007-2008; 
Total loans made: 5.8 million; 
Total face value of loans: $27.2 billion; 
Average loan amount: $4,731; 
Median income of recipients: $33,473. 

PLUS Loans: 
School Year 2007-2008; 
Total loans made: 790,600; 
Total face value of loans: $8.5 billion; 
Average loan amount: $10,753; 
Median income of recipients: $80,396. 

American opportunity credit (AOC): 
Tax Year 2009; 
Total filers claiming: 9.1 million; 
Total amount claimed: $16 billion; 
Average tax benefit: $1,755; 
Median income of filers claiming credit: $39,287. 

Lifetime learning credit: 
Tax Year 2009; 
Total filers claiming: 3.4 million; 
Total amount claimed: $2.4 billion; 
Average tax benefit: $714; 
Median income of filers claiming credit: $42,903. 

Tuition and fees deduction: 
Tax Year 2009; 
Total filers deducting: 1.7 million; 
Total amount deducted: $628.9 million; 
Average tax benefit: $378; 
Median income of filers using deduction: $73,277. 

Student loan interest deduction: 
Tax Year 2009; 
Total filers deducting: 9 million; 
Total amount deducted: $1.3 billion; 
Average tax benefit: $148; 
Median income of filers using deduction: $53,959. 

Section 529 qualified tuition programs (QTP) and Coverdell education 
savings accounts (ESAs): 
Tax Year 2006; 
Total households holding QTPs or Coverdell ESAs: 4.2 million; 
Median account balance: $9,880; 
Median gross income of households with QTPs or Coverdell ESAs: 
$122,400. 

Parental personal exemption for students ages 19-23: 
Tax Year 2009; 
Total filers claiming: 7 million; 
Total amount claimed: $5.3 billion; 
Average tax benefit: $765; 
Median income of filers claiming: $77,070. 

Earned Income Tax Credit for students ages 19-23: 
Tax Year 2009; 
Total filers claiming: 1.8 million; 
Total amount claimed: $3.3 billion; 
Average tax benefit: $1,849; 
Median income of filers claiming: $20,100. 

Source: GAO Analysis of U.S. Department of Education documents and 
school year 2007-2008 NPSAS data, IRS SOI data for tax year 2009, and 
the 2007 Federal Reserve Survey of Consumer Finance. 

Note: For estimates of tax expenditures other than QTPs and ESAs, we 
report the tax benefit a filer receives from claiming the tax 
expenditure. All figures presented are sample estimates and are 
subject to sampling error. We are 95 percent confident that in 2006, 
between 3.5-and 4.9-million households held a QTP or ESA; that the 
median account balance was between $7,500 and $12,000; and that the 
median gross income of households was between $106,000 and $138,000. 
Data for QTPs and ESAs are presented together because the public SCF 
data file does not provide separate estimates for the two accounts. 
Our estimates for the number of filers claiming an education tax 
benefit only include those filers that reduced their tax liability by 
claiming these expenditures. All other estimates in this figure have 
95 percent confidence intervals that are within +/-10 percent of the 
estimate itself. 

[End of table] 

Table 9: Text to Accompany Interactive Figure 6: Number and Percentage 
of Title IV Aid Recipients and Dollars Received, by Income Category 
and Dependency Status, 2007-2008 (Information for Base Graphic): 

Pell Grant: $0-$20,000; 

Estimate; 
Dependent: dollars received: $2,993,296,755; 
Dependent: Share of benefits: 45%; 
Independent: dollars received: $5,708,275,819; 
Independent: Share of benefits: 72%. 

Lower bound; 
Dependent: dollars received: $2,893,105,484; 
Dependent: Share of benefits: 44%; 
Independent: dollars received: $5,566,262,444; 
Independent: Share of benefits: 71%. 

Upper bound; 
Dependent: dollars received: $3,093,488,026; 
Dependent: Share of benefits: 46%; 
Independent: dollars received: $5,850,289,195; 
Independent: Share of benefits: 73%. 

Pell Grant: $20,001-$40,000; 

Estimate; 
Dependent: dollars received: $2,962,215,274; 
Dependent: Share of benefits: 44%; 
Independent: dollars received: $2,033,734,008; 
Independent: Share of benefits: 26%. 

Lower bound; 
Dependent: dollars received: $2,864,070,740; 
Dependent: Share of benefits: 43%; 
Independent: dollars received: $1,945,340,927; 
Independent: Share of benefits: 25%. 

Upper bound; 
Dependent: dollars received: $3,060,359,808; 
Dependent: Share of benefits: 46%; 
Independent: dollars received: $2,122,127,088; 
Independent: Share of benefits: 27%. 

Pell Grant: $40,001-$60,000; 

Estimate; 
Dependent: dollars received: $708,298,173; 
Dependent: Share of benefits: 11%; 
Independent: dollars received: $220,020,619; 
Independent: Share of benefits: 3%. 

Lower bound; 
Dependent: dollars received: $668,348,738; 
Dependent: Share of benefits: 10%; 
Independent: dollars received: $196,167,834; 
Independent: Share of benefits: 2%. 

Upper bound; 
Dependent: dollars received: $748,247,608; 
Dependent: Share of benefits: 11%; 
Independent: dollars received: $243,873,403; 
Independent: Share of benefits: 3%. 

Pell Grant: $60,001-$80,000; 

Estimate; 
Dependent: dollars received: $8,350,502; 
Dependent: Share of benefits: 0%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Lower bound; 
Dependent: dollars received: $6,005,886; 
Dependent: Share of benefits: 0%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Upper bound; 
Dependent: dollars received: $10,695,117; 
Dependent: Share of benefits: 0%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Pell Grant: $80,001-$100,000; 

Estimate; 
Dependent: dollars received: $0; 
Dependent: Share of benefits: 0%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Lower bound; 
Dependent: dollars received: $0; 
Dependent: Share of benefits: 0%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Upper bound; 
Dependent: dollars received: $0; 
Dependent: Share of benefits: 0%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Pell Grant: Greater than $100,000; 

Estimate; 
Dependent: dollars received: $0; 
Dependent: Share of benefits: 0%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Lower bound; 
Dependent: dollars received: $0; 
Dependent: Share of benefits: 0%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Upper bound; 
Dependent: dollars received: $0; 
Dependent: Share of benefits: 0%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Subsidized Stafford Loan: $0-$20,000; 

Estimate; 
Dependent: dollars received: $1,576,033,411; 
Dependent: Share of benefits: 15%; 
Independent: dollars received: $9,421,293,323; 
Independent: Share of benefits: 50%. 

Lower bound; 
Dependent: dollars received: $1,502,686,977; 
Dependent: Share of benefits: 14%; 
Independent: dollars received: $9,159,128,415; 
Independent: Share of benefits: 49%. 

Upper bound; 
Dependent: dollars received: $1,649,379,845; 
Dependent: Share of benefits: 15%; 
Independent: dollars received: $9,683,458,230; 
Independent: Share of benefits: 51%. 

Subsidized Stafford Loan: $20,001-$40,000; 

Estimate; 
Dependent: dollars received: $2,600,677,516; 
Dependent: Share of benefits: 24%; 
Independent: dollars received: $5,143,430,349; 
Independent: Share of benefits: 27%. 

Lower bound; 
Dependent: dollars received: $2,497,875,430; 
Dependent: Share of benefits: 23%; 
Independent: dollars received: $4,854,802,992; 
Independent: Share of benefits: 26%. 

Upper bound; 
Dependent: dollars received: $2,703,479,602; 
Dependent: Share of benefits: 25%; 
Independent: dollars received: $5,432,057,707; 
Independent: Share of benefits: 29%. 

Subsidized Stafford Loan: $40,001-$60,000; 

Estimate; 
Dependent: dollars received: $2,399,719,215; 
Dependent: Share of benefits: 22%; 
Independent: dollars received: $2,332,929,154; 
Independent: Share of benefits: 12%. 

Lower bound; 
Dependent: dollars received: $2,298,193,364; 
Dependent: Share of benefits: 21%; 
Independent: dollars received: $2,127,127,031; 
Independent: Share of benefits: 11%. 

Upper bound; 
Dependent: dollars received: $2,501,245,066; 
Dependent: Share of benefits: 23%; 
Independent: dollars received: $2,538,731,277; 
Independent: Share of benefits: 13%. 

Subsidized Stafford Loan: $60,001-$80,000; 

Estimate; 
Dependent: dollars received: $1,777,159,779; 
Dependent: Share of benefits: 17%; 
Independent: dollars received: $1,065,865,463; 
Independent: Share of benefits: 6%. 

Lower bound; 
Dependent: dollars received: $1,689,883,373; 
Dependent: Share of benefits: 16%; 
Independent: dollars received: $948,015,973; 
Independent: Share of benefits: 5%. 

Upper bound; 
Dependent: dollars received: $1,864,436,185; 
Dependent: Share of benefits: 17%; 
Independent: dollars received: $1,183,714,953; 
Independent: Share of benefits: 6%. 

Subsidized Stafford Loan: $80,001-$100,000; 

Estimate; 
Dependent: dollars received: $1,145,483,437; 
Dependent: Share of benefits: 11%; 
Independent: dollars received: $831,217,599; 
Independent: Share of benefits: 4%. 

Lower bound; 
Dependent: dollars received: $1,072,613,678; 
Dependent: Share of benefits: 10%; 
Independent: dollars received: $687,503,308; 
Independent: Share of benefits: 4%. 

Upper bound; 
Dependent: dollars received: $1,218,353,195; 
Dependent: Share of benefits: 11%; 
Independent: dollars received: $974,931,890; 
Independent: Share of benefits: 5%. 

Subsidized Stafford Loan: Greater than $100,000; 

Estimate; 
Dependent: dollars received: $1,268,645,799; 
Dependent: Share of benefits: 12%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Lower bound; 
Dependent: dollars received: $1,193,721,012; 
Dependent: Share of benefits: 11%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Upper bound; 
Dependent: dollars received: $1,343,570,586; 
Dependent: Share of benefits: 12%; 
Independent: dollars received: $0; 
Independent: Share of benefits: 0%. 

Unsubsidized Stafford Loan: $0-$20,000; 

Estimate; 
Dependent: dollars received: $480,773,388; 
Dependent: Share of benefits: 8%; 
Independent: dollars received: $9,539,027,035; 
Independent: Share of benefits: 46%. 

Lower bound; 
Dependent: dollars received: $439,589,679; 
Dependent: Share of benefits: 7%; 
Independent: dollars received: $9,167,175,297; 
Independent: Share of benefits: 44%. 

Upper bound; 
Dependent: dollars received: $521,957,098; 
Dependent: Share of benefits: 8%; 
Independent: dollars received: $9,910,878,773; 
Independent: Share of benefits: 47%. 

Unsubsidized Stafford Loan: $20,001-$40,000; 

Estimate; 
Dependent: dollars received: $706,246,969; 
Dependent: Share of benefits: 11%; 
Independent: dollars received: $4,980,847,097; 
Independent: Share of benefits: 24%. 

Lower bound; 
Dependent: dollars received: $653,568,889; 
Dependent: Share of benefits: 10%; 
Independent: dollars received: $4,650,336,624; 
Independent: Share of benefits: 22%. 

Upper bound; 
Dependent: dollars received: $758,925,049; 
Dependent: Share of benefits: 12%; 
Independent: dollars received: $5,311,357,570; 
Independent: Share of benefits: 25%. 

Unsubsidized Stafford Loan: $40,001-$60,000; 

Estimate; 
Dependent: dollars received: $668,956,702; 
Dependent: Share of benefits: 11%; 
Independent: dollars received: $2,688,876,994; 
Independent: Share of benefits: 13%. 

Lower bound; 
Dependent: dollars received: $614,035,030; 
Dependent: Share of benefits: 10%; 
Independent: dollars received: $2,419,228,606; 
Independent: Share of benefits: 12%. 

Upper bound; 
Dependent: dollars received: $723,878,374; 
Dependent: Share of benefits: 11%; 
Independent: dollars received: $2,958,525,381; 
Independent: Share of benefits: 14%. 

Unsubsidized Stafford Loan: $60,001-$80,000; 

Estimate; 
Dependent: dollars received: $863,722,923; 
Dependent: Share of benefits: 14%; 
Independent: dollars received: $1,531,454,768; 
Independent: Share of benefits: 7%. 

Lower bound; 
Dependent: dollars received: $803,916,870; 
Dependent: Share of benefits: 13%; 
Independent: dollars received: $1,386,552,806; 
Independent: Share of benefits: 7%. 

Upper bound; 
Dependent: dollars received: $923,528,976; 
Dependent: Share of benefits: 15%; 
Independent: dollars received: $1,676,356,730; 
Independent: Share of benefits: 8%. 

Unsubsidized Stafford Loan: $80,001-$100,000; 

Estimate; 
Dependent: dollars received: $1,055,285,595; 
Dependent: Share of benefits: 17%; 
Independent: dollars received: $1,474,347,793; 
Independent: Share of benefits: 7%. 

Lower bound; 
Dependent: dollars received: $986,143,816; 
Dependent: Share of benefits: 16%; 
Independent: dollars received: $1,246,749,487; 
Independent: Share of benefits: 6%. 

Upper bound; 
Dependent: dollars received: $1,124,427,374; 
Dependent: Share of benefits: 18%; 
Independent: dollars received: $1,701,946,098; 
dependent: Share of benefits: 8%. 

Unsubsidized Stafford Loan: Greater than $100,000; 

Estimate; 
Dependent: dollars received: $2,539,426,756; 
Dependent: Share of benefits: 40%; 
Independent: dollars received: $702,578,936; 
Independent: Share of benefits: 3%. 

Lower bound; 
Dependent: dollars received: $2,435,744,774; 
Dependent: Share of benefits: 39%; 
Independent: dollars received: $571,149,930; 
Independent: Share of benefits: 3%. 

Upper bound; 
Dependent: dollars received: $2,643,108,738; 
Dependent: Share of benefits: 41%; 
Independent: dollars received: $834,007,942; 
Independent: Share of benefits: 4%. 

PLUS Loan: $0-$20,000; 

Estimate; 
Dependent: dollars received: $306,178,690; 
Dependent: Share of benefits: 4%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Lower bound; 
Dependent: dollars received: $248,794,084; 
Dependent: Share of benefits: 3%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Upper bound; 
Dependent: dollars received: $363,563,296; 
Dependent: Share of benefits: 4%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

PLUS Loan: $20,001-$40,000; 

Estimate; 
Dependent: dollars received: $791,392,564; 
Dependent: Share of benefits: 9%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Lower bound; 
Dependent: dollars received: $642,770,660; 
Dependent: Share of benefits: 8%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Upper bound; 
Dependent: dollars received: $940,014,468; 
Dependent: Share of benefits: 11%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

PLUS Loan: $40,001-$60,000; 

Estimate; 
Dependent: dollars received: $1,069,231,412; 
Dependent: Share of benefits: 13%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Lower bound; 
Dependent: dollars received: $915,551,532; 
Dependent: Share of benefits: 11%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Upper bound; 
Dependent: dollars received: $1,222,911,292; 
Dependent: Share of benefits: 14%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

PLUS Loan: $60,001-$80,000; 

Estimate; 
Dependent: dollars received: $1,332,716,460; 
Dependent: Share of benefits: 16%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Lower bound; 
Dependent: dollars received: $1,186,491,288; 
Dependent: Share of benefits: 14%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Upper bound; 
Dependent: dollars received: $1,478,941,632; 
Dependent: Share of benefits: 17%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

PLUS Loan: $81,000-$100,000; 

Estimate; 
Dependent: dollars received: $1,434,575,441; 
Dependent: Share of benefits: 17%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Lower bound; 
Dependent: dollars received: $1,272,533,699; 
Dependent: Share of benefits: 15%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Upper bound; 
Dependent: dollars received: $1,596,617,182; 
Dependent: Share of benefits: 19%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

PLUS Loan: Greater than $100,000; 

Estimate; 
Dependent: dollars received: $3,567,182,411; 
Dependent: Share of benefits: 42%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Lower bound; 
Dependent: dollars received: $3,278,117,463; 
Dependent: Share of benefits: 39%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Upper bound; 
Dependent: dollars received: $3,856,247,358; 
Dependent: Share of benefits: 44%; 
Independent: dollars received: [A]; 
Independent: Share of benefits: [A]. 

Source: GAO analysis of Education NPSAS 2007-2008 data. 

Note: Numbers may not add due to rounding. 

[A] Figure includes PLUS loans for parents of dependent students only. 
Grad PLUS loans for independent students are not in the scope of this 
review because they served under 500,000 students in 2007-2008. 

[End of table] 

Table 10: Text to Accompany Interactive Figure 6: Number and 
Percentage of Title IV Aid Recipients and Dollars Received, by Income 
Category and Dependency Status, 2007-2008 (Information for Roll-over): 

Pell Grant: $0-$20,000; 

Estimate; 
Dependent: Number of Recipients: 877,503; 
Dependent: Share of Recipients: 36%; 
Independent: Number of Recipients: 2,218,880; 
Independent: Share of Recipients: 67%. 

Lower bound; 
Dependent: Number of Recipients: 848,046; 
Dependent: Share of Recipients: 35%; 
Independent: Number of Recipients: 2,164,529; 
Independent: Share of Recipients: 66%. 

Upper bound; 
Dependent: Number of Recipients: 906,959; 
Dependent: Share of Recipients: 37%; 
Independent: Number of Recipients: 2,273,231; 
Independent: Share of Recipients: 68%. 

Pell Grant: $20,001-$40,000; 

Estimate; 
Dependent: Number of Recipients: 1,079,892; 
Dependent: Share of Recipients: 45%; 
Independent: Number of Recipients: 907,156; 
Independent: Share of Recipients: 27%. 

Lower bound; 
Dependent: Number of Recipients: 1,046,185; 
Dependent: Share of Recipients: 44%; 
Independent: Number of Recipients: 870,299; 
Independent: Share of Recipients: 26%. 

Upper bound; 
Dependent: Number of Recipients: 1,113,599; 
Dependent: Share of Recipients: 46%; 
Independent: Number of Recipients: 944,013; 
Independent: Share of Recipients: 28%. 

Pell Grant: $40,001-$60,000; 

Estimate; 
Dependent: Number of Recipients: 434,219; 
Dependent: Share of Recipients: 18%; 
Independent: Number of Recipients: 183,458; 
Independent: Share of Recipients: 6%. 

Lower bound; 
Dependent: Number of Recipients: 412,524; 
Dependent: Share of Recipients: 17%; 
Independent: Number of Recipients: 164,970; 
Independent: Share of Recipients: 5%. 

Upper bound; 
Dependent: Number of Recipients: 455,915; 
Dependent: Share of Recipients: 19%; 
Independent: Number of Recipients: 201,947; 
Independent: Share of Recipients: 6%. 

Pell Grant: $60,001-$80,000; 

Estimate; 
Dependent: Number of Recipients: 18,717; 
Dependent: Share of Recipients: 1%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Lower bound; 
Dependent: Number of Recipients: 13,767; 
Dependent: Share of Recipients: 1%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Upper bound; 
Dependent: Number of Recipients: 23,668; 
Dependent: Share of Recipients: 1%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Pell Grant: $80,001-$100,000; 

Estimate; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Lower bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Upper bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Pell Grant: Greater than $100,000; 

Estimate; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
[A]; 
Independent: Share of Recipients[A]. 

Lower bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Upper bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Subsidized Stafford Loan: $0-$20,000; 

Estimate; 
Dependent: Number of Recipients: 456,220; 
Dependent: Share of Recipients: 15%; 
Independent: Number of Recipients: 2,156,910; 
Independent: Share of Recipients: 50%. 

Lower bound; 
Dependent: Number of Recipients: 434,945; 
Dependent: Share of Recipients: 14%; 
Independent: Number of Recipients: 2,098,700; 
Independent: Share of Recipients: 49%. 

Upper bound; 
Dependent: Number of Recipients: 477,494; 
Dependent: Share of Recipients: 15%; 
Independent: Number of Recipients: 2,215,119; 
Independent: Share of Recipients: 51%. 

Subsidized Stafford Loan: $20,001-$40,000; 

Estimate; 
Dependent: Number of Recipients: 729,441; 
Dependent: Share of Recipients: 23%; 
Independent: Number of Recipients: 1,236,366; 
Independent: Share of Recipients: 29%. 

Lower bound; 
Dependent: Number of Recipients: 700,807; 
Dependent: Share of Recipients: 23%; 
Independent: Number of Recipients: 1,179,975; 
Independent: Share of Recipients: 27%. 

Upper bound; 
Dependent: Number of Recipients: 758,074; 
Dependent: Share of Recipients: 24%; 
Independent: Number of Recipients: 1,292,757; 
Independent: Share of Recipients: 30%. 

Subsidized Stafford Loan: $40,001-$60,000; 

Estimate; 
Dependent: Number of Recipients: 671,967; 
Dependent: Share of Recipients: 22%; 
Independent: Number of Recipients: 516,525; 
Independent: Share of Recipients: 12%. 

Lower bound; 
Dependent: Number of Recipients: 643,347; 
Dependent: Share of Recipients: 21%; 
Independent: Number of Recipients: 478,359; 
Independent: Share of Recipients: 11%. 

Upper bound; 
Dependent: Number of Recipients: 700,587; 
Dependent: Share of Recipients: 22%; 
Independent: Number of Recipients: 554,692; 
Independent: Share of Recipients: 13%. 

Subsidized Stafford Loan: $60,001-$80,000; 

Estimate; 
Dependent: Number of Recipients: 520,841; 
Dependent: Share of Recipients: 17%; 
Independent: Number of Recipients: 246,789; 
Independent: Share of Recipients: 6%. 

Lower bound; 
Dependent: Number of Recipients: 494,685; 
Dependent: Share of Recipients: 16%; 
Independent: Number of Recipients: 223,258; 
Independent: Share of Recipients: 5%. 

Upper bound; 
Dependent: Number of Recipients: 546,998; 
Dependent: Share of Recipients: 18%; 
Independent: Number of Recipients: 270,321; 
Independent: Share of Recipients: 6%. 

Subsidized Stafford Loan: $80,001-$100,000; 

Estimate; 
Dependent: Number of Recipients: 343,004; 
Dependent: Share of Recipients: 11%; 
Independent: Number of Recipients: 179,982; 
Independent: Share of Recipients: 4%. 

Lower bound; 
Dependent: Number of Recipients: 321,623; 
Dependent: Share of Recipients: 10%; 
Independent: Number of Recipients: 156,697; 
Independent: Share of Recipients: 4%. 

Upper bound; 
Dependent: Number of Recipients: 364,385; 
Dependent: Share of Recipients: 12%; 
Independent: Number of Recipients: 203,266; 
Independent: Share of Recipients: 5%. 

Subsidized Stafford Loan: Greater than $100,000; 

Estimate; 
Dependent: Number of Recipients: 385,491; 
Dependent: Share of Recipients: 12%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Lower bound; 
Dependent: Number of Recipients: 362,872; 
Dependent: Share of Recipients: 12%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Upper bound; 
Dependent: Number of Recipients: 408,110; 
Dependent: Share of Recipients: 13%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Unsubsidized Stafford Loan: $0-$20,000; 

Estimate; 
Dependent: Number of Recipients: 156,545; 
Dependent: Share of Recipients: 8%; 
Independent: Number of Recipients: 1,771,762; 
Independent: Share of Recipients: 46%. 

Lower bound; 
Dependent: Number of Recipients: 143,131; 
Dependent: Share of Recipients: 7%; 
Independent: Number of Recipients: 1,717,257; 
Independent: Share of Recipients: 45%. 

Upper bound; 
Dependent: Number of Recipients: 169,960; 
Dependent: Share of Recipients: 9%; 
Independent: Number of Recipients: 1,826,267; 
Independent: Share of Recipients: 47%. 

Unsubsidized Stafford Loan: $20,001-$40,000; 

Estimate; 
Dependent: Number of Recipients: 251,950; 
Dependent: Share of Recipients: 13%; 
Independent: Number of Recipients: 1,057,347; 
Independent: Share of Recipients: 28%. 

Lower bound; 
Dependent: Number of Recipients: 233,387; 
Dependent: Share of Recipients: 12%; 
Independent: Number of Recipients: 1,002,933; 
Independent: Share of Recipients: 26%. 

Upper bound; 
Dependent: Number of Recipients: 270,512; 
Dependent: Share of Recipients: 14%; 
Independent: Number of Recipients: 1,111,761; 
Independent: Share of Recipients: 29%. 

Unsubsidized Stafford Loan: $40,001-$60,000; 

Estimate; 
Dependent: Number of Recipients: 240,232; 
Dependent: Share of Recipients: 12%; 
Independent: Number of Recipients: 479,163; 
Independent: Share of Recipients: 13%. 

Lower bound; 
Dependent: Number of Recipients: 220,852; 
Dependent: Share of Recipients: 12%; 
Independent: Number of Recipients: 441,852; 
Independent: Share of Recipients: 12%. 

Upper bound; 
Dependent: Number of Recipients: 259,611; 
Dependent: Share of Recipients: 13%; 
Independent: Number of Recipients: 516,474; 
Independent: Share of Recipients: 13%. 

Unsubsidized Stafford Loan: $60,001-$80,000; 

Estimate; 
Dependent: Number of Recipients: 293,565; 
Dependent: Share of Recipients: 15%; 
Independent: Number of Recipients: 260,392; 
Independent: Share of Recipients: 7%. 

Lower bound; 
Dependent: Number of Recipients: 273,213; 
Dependent: Share of Recipients: 14%; 
Independent: Number of Recipients: 236,564; 
Independent: Share of Recipients: 6%. 

Upper bound; 
Dependent: Number of Recipients: 313,916; 
Dependent: Share of Recipients: 16%; 
Independent: Number of Recipients: 284,220; 
Independent: Share of Recipients: 7%. 

Unsubsidized Stafford Loan: $81,000-$100,000; 

Estimate; 
Dependent: Number of Recipients: 309,798; 
Dependent: Share of Recipients: 16%; 
Independent: Number of Recipients: 194,390; 
Independent: Share of Recipients: 5%. 

Lower bound; 
Dependent: Number of Recipients: 289,829; 
Dependent: Share of Recipients: 15%; 
Independent: Number of Recipients: 170,907; 
Independent: Share of Recipients: 5%. 

Upper bound; 
Dependent: Number of Recipients: 329,768; 
Dependent: Share of Recipients: 17%; 
Independent: Number of Recipients: 217,874; 
Independent: Share of Recipients: 6%. 

Unsubsidized Stafford Loan: Greater than $100,000; 

Estimate; 
Dependent: Number of Recipients: 670,456; 
Dependent: Share of Recipients: 35%; 
Independent: Number of Recipients: 70,133; 
Independent: Share of Recipients: 2%. 

Lower bound; 
Dependent: Number of Recipients: 643,657; 
Dependent: Share of Recipients: 34%; 
Independent: Number of Recipients: 56,753; 
Independent: Share of Recipients: 1%. 

Upper bound; 
Dependent: Number of Recipients: 697,255; 
Dependent: Share of Recipients: 36%; 
Independent: Number of Recipients: 83,512; 
Independent: Share of Recipients: 2%. 

PLUS Loan: $0-$20,000; 

Estimate; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Lower bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Upper bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

PLUS Loan: $20,001-$40,000; 

Estimate; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Lower bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Upper bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

PLUS Loan: $40,001-$60,000; 

Estimate; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Lower bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Upper bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

PLUS Loan: $60,001-$80,000; 

Estimate; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Lower bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Upper bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

PLUS Loan: $80,001-$100,000; 

Estimate; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Lower bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Upper bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

PLUS Loan: Greater than $100,000; 

Estimate; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Lower bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Upper bound; 
Dependent: Number of Recipients[A]; 
Dependent: Share of Recipients[A]; 
Independent: Number of Recipients: [B]; 
Independent: Share of Recipients[B]. 

Source: GAO analysis of Education NPSAS 2007-2008 data. 

Note: Numbers may not add due to rounding. 

[A] Cannot provide estimate due to sample size. 

[B] PLUS loans for independent students are not in the scope of this 
review because they served under 500,000 students in 2007-2008. 

[End of table] 

Table 11: Text to Accompany Interactive Figure 7: Number and 
Percentage of Campus-Based Aid Recipients and Dollars Received, by 
Income Category and Dependency Status, 2007-2008 (Information for Base 
Graphic): 

FSEOG: $0-$20,000; 

Estimate; 
Dependent: Dollars received: $209,167,876; 
Dependent: Share of Benefits: 40%; 
Independent: Dollars received: $287,140,334; 
Independent: Share of Benefits: 79%. 

Lower bound; 
Dependent: Dollars received: $191,444,182; 
Dependent: Share of Benefits: 38%; 
Independent: Dollars received: $267,377,116; 
Independent: Share of Benefits: 76%. 

Upper bound; 
Dependent: Dollars received: $226,891,570; 
Dependent: Share of Benefits: 43%; 
Independent: Dollars received: $306,903,553; 
Independent: Share of Benefits: 81%. 

FSEOG: $20,001-$40,000; 

Estimate; 
Dependent: Dollars received: $229,314,569; 
Dependent: Share of Benefits: 44%; 
Independent: Dollars received: $64,666,358; 
Independent: Share of Benefits: 18%. 

Lower bound; 
Dependent: Dollars received: $208,201,016; 
Dependent: Share of Benefits: 41%; 
Independent: Dollars received: $56,314,225; 
Independent: Share of Benefits: 16%. 

Upper bound; 
Dependent: Dollars received: $250,428,122; 
Dependent: Share of Benefits: 47%; 
Independent: Dollars received: $73,018,492; 
Independent: Share of Benefits: 20%. 

FSEOG: $40,001-$60,000; 

Estimate; 
Dependent: Dollars received: $74,901,541; 
Dependent: Share of Benefits: 14%; 
Independent: Dollars received: $12,253,894; 
Independent: Share of Benefits: 3%. 

Lower bound; 
Dependent: Dollars received: $65,006,580; 
Dependent: Share of Benefits: 13%; 
Independent: Dollars received: $8,076,542; 
Independent: Share of Benefits: 2%. 

Upper bound; 
Dependent: Dollars received: $84,796,502; 
Dependent: Share of Benefits: 16%; 
Independent: Dollars received: $16,431,247; 
Independent: Share of Benefits: 4%. 

FSEOG: $60,001-$80,000; 

Estimate; 
Dependent: Dollars received: $5,224,562; 
Dependent: Share of Benefits: 1%; 
Independent: Dollars received: $198,775; 
Independent: Share of Benefits: 0%. 

Lower bound; 
Dependent: Dollars received: $2,582,049; 
Dependent: Share of Benefits: 0%; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

Upper bound; 
Dependent: Dollars received: $7,867,076; 
Dependent: Share of Benefits: 2%; 
Independent: Dollars received: $477,611; 
Independent: Share of Benefits: 0%. 

FSEOG: $80,001-$100,000; 

Estimate; 
Dependent: Dollars received: [A]; 
Dependent: Share of Benefits: [A]; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

Lower bound; 
Dependent: Dollars received: [A]; 
Dependent: Share of Benefits: [A]; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

Upper bound; 
Dependent: Dollars received: [A]; 
Dependent: Share of Benefits: [A]; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

FSEOG: Greater than $100,000; 

Estimate; 
Dependent: Dollars received: [A]; 
Dependent: Share of Benefits: [A]; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

Lower bound; 
Dependent: Dollars received: [A]; 
Dependent: Share of Benefits: [A]; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

Upper bound; 
Dependent: Dollars received: [A]; 
Dependent: Share of Benefits: [A]; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

Federal Perkins Loan: $0-$20,000; 

Estimate; 
Dependent: Dollars received: $152,790,728; 
Dependent: Share of Benefits: 17%; 
Independent: Dollars received: $433,717,269; 
Independent: Share of Benefits: 73%. 

Lower bound; 
Dependent: Dollars received: $132,647,243; 
Dependent: Share of Benefits: 15%; 
Independent: Dollars received: $392,867,642; 
Independent: Share of Benefits: 70%. 

Upper bound; 
Dependent: Dollars received: $172,934,213; 
Dependent: Share of Benefits: 19%; 
Independent: Dollars received: $474,566,897; 
Independent: Share of Benefits: 77%. 

Federal Perkins Loan: $20,001-$40,000; 

Estimate; 
Dependent: Dollars received: $259,282,922; 
Dependent: Share of Benefits: 28%; 
Independent: Dollars received: $95,943,420; 
Independent: Share of Benefits: 16%. 

Lower bound; 
Dependent: Dollars received: $233,558,609; 
Dependent: Share of Benefits: 26%; 
Independent: Dollars received: $79,398,864; 
Independent: Share of Benefits: 14%. 

Upper bound; 
Dependent: Dollars received: $285,007,236; 
Dependent: Share of Benefits: 31%; 
Independent: Dollars received: $112,487,976; 
Independent: Share of Benefits: 19%. 

Federal Perkins Loan: $40,001-$60,000; 

Estimate; 
Dependent: Dollars received: $220,640,219; 
Dependent: Share of Benefits: 24%; 
Independent: Dollars received: $38,661,997; 
Independent: Share of Benefits: 7%. 

Lower bound; 
Dependent: Dollars received: $195,048,110; 
Dependent: Share of Benefits: 22%; 
Independent: Dollars received: $26,745,360; 
Independent: Share of Benefits: 5%. 

Upper bound; 
Dependent: Dollars received: $246,232,329; 
Dependent: Share of Benefits: 27%; 
Independent: Dollars received: $50,578,633; 
Independent: Share of Benefits: 8%. 

Federal Perkins Loan: $60,001-$80,000; 

Estimate; 
Dependent: Dollars received: $118,530,334; 
Dependent: Share of Benefits: 13%; 
Independent: Dollars received: $7,690,437; 
Independent: Share of Benefits: 1%. 

Lower bound; 
Dependent: Dollars received: $100,699,980; 
Dependent: Share of Benefits: 11%; 
Independent: Dollars received: $3,375,164; 
Independent: Share of Benefits: 1%. 

Upper bound; 
Dependent: Dollars received: $136,360,688; 
Dependent: Share of Benefits: 15%; 
Independent: Dollars received: $12,005,710; 
Independent: Share of Benefits: 2%. 

Federal Perkins Loan: $80,001-$100,000; 

Estimate; 
Dependent: Dollars received: $67,018,955; 
Dependent: Share of Benefits: 7%; 
Independent: Dollars received: $15,385,335; 
Independent: Share of Benefits: 3%. 

Lower bound; 
Dependent: Dollars received: $50,713,975; 
Dependent: Share of Benefits: 6%; 
Independent: Dollars received: $6,394,314; 
Independent: Share of Benefits: 1%. 

Upper bound; 
Dependent: Dollars received: $83,323,934; 
Dependent: Share of Benefits: 9%; 
Independent: Dollars received: $24,376,356; 
Independent: Share of Benefits: 4%. 

Federal Perkins Loan: Greater than $100,000; 

Estimate; 
Dependent: Dollars received: $95,266,510; 
Dependent: Share of Benefits: 10%; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

Lower bound; 
Dependent: Dollars received: $74,989,999; 
Dependent: Share of Benefits: 8%; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

Upper bound; 
Dependent: Dollars received: $115,543,021; 
Dependent: Share of Benefits: 12%; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

Federal Work-Study: $0-$20,000; 

Estimate; 
Dependent: Dollars received: $349,134,109; 
Dependent: Share of Benefits: 12%; 
Independent: Dollars received: $707,382,578; 
Independent: Share of Benefits: 63%. 

Lower bound; 
Dependent: Dollars received: $312,290,322; 
Dependent: Share of Benefits: 11%; 
Independent: Dollars received: $644,186,709; 
Independent: Share of Benefits: 59%. 

Upper bound; 
Dependent: Dollars received: $385,977,896; 
Dependent: Share of Benefits: 14%; 
Independent: Dollars received: $770,578,448; 
Independent: Share of Benefits: 67%. 

Federal Work-Study: $20,001-$40,000; 

Estimate; 
Dependent: Dollars received: $605,006,564; 
Dependent: Share of Benefits: 21%; 
Independent: Dollars received: $238,661,357; 
Independent: Share of Benefits: 21%. 

Lower bound; 
Dependent: Dollars received: $547,875,239; 
Dependent: Share of Benefits: 19%; 
Independent: Dollars received: $199,985,943; 
Independent: Share of Benefits: 18%. 

Upper bound; 
Dependent: Dollars received: $662,137,889; 
Dependent: Share of Benefits: 23%; 
Independent: Dollars received: $277,336,772; 
Independent: Share of Benefits: 24%. 

Federal Work-Study: $40,001-$60,000; 

Estimate; 
Dependent: Dollars received: $535,082,448; 
Dependent: Share of Benefits: 19%; 
Independent: Dollars received: $97,670,405; 
Independent: Share of Benefits: 9%. 

Lower bound; 
Dependent: Dollars received: $488,470,952; 
Dependent: Share of Benefits: 17; 
Independent: Dollars received: $70,377,114; 
Independent: Share of Benefits: 6. 

Upper bound; 
Dependent: Dollars received: $581,693,944; 
Dependent: Share of Benefits: 20%; 
Independent: Dollars received: $124,963,696; 
Independent: Share of Benefits: 11%. 

Federal Work-Study: $60,001-$80,000; 

Estimate; 
Dependent: Dollars received: $434,541,331; 
Dependent: Share of Benefits: 15%; 
Independent: Dollars received: $51,330,515; 
Independent: Share of Benefits: 5%. 

Lower bound; 
Dependent: Dollars received: $388,756,824; 
Dependent: Share of Benefits: 14%; 
Independent: Dollars received: $26,856,536; 
Independent: Share of Benefits: 2%. 

Upper bound; 
Dependent: Dollars received: $480,325,837; 
Dependent: Share of Benefits: 17%; 
Independent: Dollars received: $75,804,494; 
Independent: Share of Benefits: 7%. 

Federal Work-Study: $80,001-$100,000; 

Estimate; 
Dependent: Dollars received: $342,452,892; 
Dependent: Share of Benefits: 12%; 
Independent: Dollars received: $21,051,799; 
Independent: Share of Benefits: 2%. 

Lower bound; 
Dependent: Dollars received: $297,724,485; 
Dependent: Share of Benefits: 11%; 
Independent: Dollars received: $9,357,957; 
Independent: Share of Benefits: 1%. 

Upper bound; 
Dependent: Dollars received: $387,181,298; 
Dependent: Share of Benefits: 13%; 
Independent: Dollars received: $32,745,640; 
Independent: Share of Benefits: 3%. 

Federal Work-Study: Greater than $100,000; 

Estimate; 
Dependent: Dollars received: $580,623,357; 
Dependent: Share of Benefits: 20%; 
Independent: Dollars received: $2,987,375; 
Independent: Share of Benefits: 0%. 

Lower bound; 
Dependent: Dollars received: $528,212,793; 
Dependent: Share of Benefits: 19%; 
Independent: Dollars received: $0; 
Independent: Share of Benefits: 0%. 

Upper bound; 
Dependent: Dollars received: $633,033,922; 
Dependent: Share of Benefits: 22%; 
Independent: Dollars received: $7,826,508; 
Independent: Share of Benefits: 1%. 

Source: GAO Analysis of Education NPSAS 2007-2008 data. 

Note: Numbers may not add due to rounding. 

[A] Cannot provide estimate because of sample size. 

[End of table] 

Table 12: Text to Accompany Interactive Figure 7: Number and 
Percentage of Campus-Based Aid Recipients and Dollars Received, by 
Income Category and Dependency Status, 2007-2008 (Information for Roll-
over): 

FSEOG: $0-$20,000; 

Estimate; 
Dependent: Number of Recipients: 246,780; 
Dependent: Share of Recipients: 43%; 
Independent: Number of Recipients: 524,336; 
Independent: Share of Recipients: 76%. 

Lower bound; 
Dependent: Number of Recipients: 231,282; 
Dependent: Share of Recipients: 41%; 
Independent: Number of Recipients: 497,380; 
Independent: Share of Recipients: 74%. 

Upper bound; 
Dependent: Number of Recipients: 262,278; 
Dependent: Share of Recipients: 45%; 
Independent: Number of Recipients: 551,292; 
Independent: Share of Recipients: 78%. 

FSEOG: $20,001-$40,000; 

Estimate; 
Dependent: Number of Recipients: 242,838; 
Dependent: Share of Recipients: 42%; 
Independent: Number of Recipients: 141,319; 
Independent: Share of Recipients: 20%. 

Lower bound; 
Dependent: Number of Recipients: 226,611; 
Dependent: Share of Recipients: 40%; 
Independent: Number of Recipients: 126,762; 
Independent: Share of Recipients: 19%. 

Upper bound; 
Dependent: Number of Recipients: 259,066; 
Dependent: Share of Recipients: 44%; 
Independent: Number of Recipients: 155,876; 
Independent: Share of Recipients: 22%. 

FSEOG: $40,001-$60,000; 

Estimate; 
Dependent: Number of Recipients: 83,023; 
Dependent: Share of Recipients: 14%; 
Independent: Number of Recipients: 24,232; 
Independent: Share of Recipients: 4%. 

Lower bound; 
Dependent: Number of Recipients: 74,208; 
Dependent: Share of Recipients: 13%; 
Independent: Number of Recipients: 14,826; 
Independent: Share of Recipients: 2%. 

Upper bound; 
Dependent: Number of Recipients: 91,839; 
Dependent: Share of Recipients: 16%; 
Independent: Number of Recipients: 33,638; 
Independent: Share of Recipients: 5%. 

FSEOG: $60,001-$80,000; 

Estimate; 
Dependent: Number of Recipients: 5,621; 
Dependent: Share of Recipients: 1%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients: [A]. 

Lower bound; 
Dependent: Number of Recipients: 2,656; 
Dependent: Share of Recipients: 1%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients: [A]. 

Upper bound; 
Dependent: Number of Recipients: 8,585; 
Dependent: Share of Recipients: 2%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients: [A]. 

FSEOG: $80,001-$100,000; 

Estimate; 
Dependent: Number of Recipients: [A]; 
Dependent: Share of Recipients: [A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients: [A]. 

Lower bound; 
Dependent: Number of Recipients: [A]; 
Dependent: Share of Recipients: [A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients: [A]. 

Upper bound; 
Dependent: Number of Recipients: [A]; 
Dependent: Share of Recipients: [A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients: [A]. 

FSEOG: Greater than $100,000; 

Estimate; 
Dependent: Number of Recipients: [A]; 
Dependent: Share of Recipients: [A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients: [A]. 

Lower bound; 
Dependent: Number of Recipients: [A]; 
Dependent: Share of Recipients: [A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients: [A]. 

Upper bound; 
Dependent: Number of Recipients: [A]; 
Dependent: Share of Recipients: [A]; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients: [A]. 

Federal Perkins Loan: $0-$20,000; 

Estimate; 
Dependent: Number of Recipients: 77,162; 
Dependent: Share of Recipients: 17%; 
Independent: Number of Recipients: 160,257; 
Independent: Share of Recipients: 73%. 

Lower bound; 
Dependent: Number of Recipients: 67,682; 
Dependent: Share of Recipients: 15%; 
Independent: Number of Recipients: 147,483; 
Independent: Share of Recipients: 69%. 

Upper bound; 
Dependent: Number of Recipients: 86,641; 
Dependent: Share of Recipients: 19%; 
Independent: Number of Recipients: 173,031; 
Independent: Share of Recipients: 75%. 

Federal Perkins Loan: $20,001-$40,000; 

Estimate; 
Dependent: Number of Recipients: 120,699; 
Dependent: Share of Recipients: 27%; 
Independent: Number of Recipients: 40,567; 
Independent: Share of Recipients: 18%. 

Lower bound; 
Dependent: Number of Recipients: 110,196; 
Dependent: Share of Recipients: 25%; 
Independent: Number of Recipients: 34,398; 
Independent: Share of Recipients: 16%. 

Upper bound; 
Dependent: Number of Recipients: 131,201; 
Dependent: Share of Recipients: 29%; 
Independent: Number of Recipients: 46,735; 
Independent: Share of Recipients: 21%. 

Federal Perkins Loan: $40,001-$60,000; 

Estimate; 
Dependent: Number of Recipients: 112,790; 
Dependent: Share of Recipients: 25%; 
Independent: Number of Recipients: 12,892; 
Independent: Share of Recipients: 6%. 

Lower bound; 
Dependent: Number of Recipients: 100,080; 
Dependent: Share of Recipients: 23%; 
Independent: Number of Recipients: 9,429; 
Independent: Share of Recipients: 4%. 

Upper bound; 
Dependent: Number of Recipients: 125,500; 
Dependent: Share of Recipients: 27%; 
Independent: Number of Recipients: 16,356; 
Independent: Share of Recipients: 8%. 

Federal Perkins Loan: $60,001-$80,000; 

Estimate; 
Dependent: Number of Recipients: 60,826; 
Dependent: Share of Recipients: 13%; 
Independent: Number of Recipients: 3,488; 
Independent: Share of Recipients: 2%. 

Lower bound; 
Dependent: Number of Recipients: 52,679; 
Dependent: Share of Recipients: 12%; 
Independent: Number of Recipients: 1,665; 
Independent: Share of Recipients: 1%. 

Upper bound; 
Dependent: Number of Recipients: 68,974; 
Dependent: Share of Recipients: 15%; 
Independent: Number of Recipients: 5,310; 
Independent: Share of Recipients: 3%. 

Federal Perkins Loan: $80,001-$100,000; 

Estimate; 
Dependent: Number of Recipients: 35,724; 
Dependent: Share of Recipients: 8%; 
Independent: Number of Recipients: 3,794; 
Independent: Share of Recipients: 2%. 

Lower bound; 
Dependent: Number of Recipients: 27,727; 
Dependent: Share of Recipients: 6%; 
Independent: Number of Recipients: 1,742; 
Independent: Share of Recipients: 1%. 

Upper bound; 
Dependent: Number of Recipients: 43,720; 
Dependent: Share of Recipients: 10%; 
Independent: Number of Recipients: 5,846; 
Independent: Share of Recipients: 3%. 

Federal Perkins Loan: Greater than $100,000; 

Estimate; 
Dependent: Number of Recipients: 46,550; 
Dependent: Share of Recipients: 10%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Lower bound; 
Dependent: Number of Recipients: 38,822; 
Dependent: Share of Recipients: 9%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Upper bound; 
Dependent: Number of Recipients: 54,277; 
Dependent: Share of Recipients: 12%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients: [A]. 

Federal Work-Study: $0-$20,000; 

Estimate; 
Dependent: Number of Recipients: 155,404; 
Dependent: Share of Recipients: 13%; 
Independent: Number of Recipients: 262,659; 
Independent: Share of Recipients: 68%. 

Lower bound; 
Dependent: Number of Recipients: 142,022; 
Dependent: Share of Recipients: 12%; 
Independent: Number of Recipients: 244,673; 
Independent: Share of Recipients: 65%. 

Upper bound; 
Dependent: Number of Recipients: 168,786; 
Dependent: Share of Recipients: 14%; 
Independent: Number of Recipients: 280,645; 
Independent: Share of Recipients: 70%. 

Federal Work-Study: $20,001-$40,000; 

Estimate; 
Dependent: Number of Recipients: 268,903; 
Dependent: Share of Recipients: 22%; 
Independent: Number of Recipients: 74,287; 
Independent: Share of Recipients: 19%. 

Lower bound; 
Dependent: Number of Recipients: 250,588; 
Dependent: Share of Recipients: 21%; 
Independent: Number of Recipients: 64,772; 
Independent: Share of Recipients: 17%. 

Upper bound; 
Dependent: Number of Recipients: 287,218; 
Dependent: Share of Recipients: 23%; 
Independent: Number of Recipients: 83,802; 
Independent: Share of Recipients: 21%. 

Federal Work-Study: $40,001-$60,000; 

Estimate; 
Dependent: Number of Recipients: 231,671; 
Dependent: Share of Recipients: 19%; 
Independent: Number of Recipients: 31,134; 
Independent: Share of Recipients: 8%. 

Lower bound; 
Dependent: Number of Recipients: 215,316; 
Dependent: Share of Recipients: 18%; 
Independent: Number of Recipients: 24,591; 
Independent: Share of Recipients: 7%. 

Upper bound; 
Dependent: Number of Recipients: 248,026; 
Dependent: Share of Recipients: 20%; 
Independent: Number of Recipients: 37,677; 
Independent: Share of Recipients: 10%. 

Federal Work-Study: $60,001-$80,000; 

Estimate; 
Dependent: Number of Recipients: 180,705; 
Dependent: Share of Recipients: 15%; 
Independent: Number of Recipients: 12,062; 
Independent: Share of Recipients: 3%. 

Lower bound; 
Dependent: Number of Recipients: 165,556; 
Dependent: Share of Recipients: 14%; 
Independent: Number of Recipients: 7,563; 
Independent: Share of Recipients: 2%. 

Upper bound; 
Dependent: Number of Recipients: 195,855; 
Dependent: Share of Recipients: 16%; 
Independent: Number of Recipients: 16,561; 
Independent: Share of Recipients: 4%. 

Federal Work-Study: $80,001-$100,000; 

Estimate; 
Dependent: Number of Recipients: 141,945; 
Dependent: Share of Recipients: 12%; 
Independent: Number of Recipients: 6,493; 
Independent: Share of Recipients: 2%. 

Lower bound; 
Dependent: Number of Recipients: 126,505; 
Dependent: Share of Recipients: 10%; 
Independent: Number of Recipients: 3,688; 
Independent: Share of Recipients: 1%. 

Upper bound; 
Dependent: Number of Recipients: 157,384; 
Dependent: Share of Recipients: 13%; 
Independent: Number of Recipients: 9,298; 
Independent: Share of Recipients: 3%. 

Federal Work-Study: Greater than $100,000; 

Estimate; 
Dependent: Number of Recipients: 245,298; 
Dependent: Share of Recipients: 20%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Lower bound; 
Dependent: Number of Recipients: 227,301; 
Dependent: Share of Recipients: 19%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Upper bound; 
Dependent: Number of Recipients: 263,294; 
Dependent: Share of Recipients: 21%; 
Independent: Number of Recipients: [A]; 
Independent: Share of Recipients[A]. 

Source: GAO Analysis of Education NPSAS 2007-2008 data. 

Note: Numbers may not add due to rounding. 

[A] Cannot provide estimate because of sample size. 

[End of table] 

Table 13: Text to Accompany Interactive Figure 8: Number and 
Percentage of Tax Filers Claiming Higher Education Tax Expenditures 
and Total Benefits, by Income Category, 2009 (Information for Base 
Graphic): 

Program: Tuition and fees deduction: $0 to 20,000; 

Estimate; 
Total Benefits: 23,237,000; 
Share of Benefits: 4%. 

Lower bound; 
Total Benefits: 17,298,000; 
Share of Benefits: 3%. 

Upper bound; 
Total Benefits: 29,177,000; 
Share of Benefits: 5%. 

Program: Tuition and fees deduction: $20,001 to 40,000; 

Estimate; 
Total Benefits: 60,962,000; 
Share of Benefits: 10%. 

Lower bound; 
Total Benefits: 50,985,000; 
Share of Benefits: 8%. 

Upper bound; 
Total Benefits: 70,940,000; 
Share of Benefits: 11%. 

Program: Tuition and fees deduction: $40,001 to 60,000; 

Estimate; 
Total Benefits: 125,127,000; 
Share of Benefits: 20%. 

Lower bound; 
Total Benefits: 107,739,000; 
Share of Benefits: 17%. 

Upper bound; 
Total Benefits: 142,516,000; 
Share of Benefits: 22%. 

Program: Tuition and fees deduction: $60,001 to 80,000; 

Estimate; 
Total Benefits: 78,621,000; 
Share of Benefits: 13%. 

Lower bound; 
Total Benefits: 66,696,000; 
Share of Benefits: 11%. 

Upper bound; 
Total Benefits: 90,547,000; 
Share of Benefits: 14%. 

Program: Tuition and fees deduction: $80,001 to 100,000; 

Estimate; 
Total Benefits: 55,363,000; 
Share of Benefits: 9%. 

Lower bound; 
Total Benefits: 43,828,000; 
Share of Benefits: 7%. 

Upper bound; 
Total Benefits: 66,898,000; 
Share of Benefits: 11%. 

Program: Tuition and fees deduction: Over $100,000; 
Estimate; 
Total Benefits: 285,550,000; 
Share of Benefits: 45%. 

Lower bound; 
Total Benefits: 258,612,000; 
Share of Benefits: 42%. 

Upper bound; 
Total Benefits: 312,489,000; 
Share of Benefits: 48%. 

Program: Student loan interest deduction: $0 to 20,000; 

Estimate; 
Total Benefits: 56,757,000; 
Share of Benefits: 4%. 

Lower bound; 
Total Benefits: 50,479,000; 
Share of Benefits: 4%. 

Upper bound; 
Total Benefits: 63,035,000; 
Share of Benefits: 5%. 

Program: Student loan interest deduction: $20,001 to 40,000; 

Estimate; 
Total Benefits: 271,208,000; 
Share of Benefits: 20%. 

Lower bound; 
Total Benefits: 256,154,000; 
Share of Benefits: 19%. 

Upper bound; 
Total Benefits: 286,263,000; 
Share of Benefits: 21%. 

Program: Student loan interest deduction: $40,001 to 60,000; 

Estimate; 
Total Benefits: 341,352,000; 
Share of Benefits: 26%. 

Lower bound; 
Total Benefits: 320,833,000; 
Share of Benefits: 24%. 

Upper bound; 
Total Benefits: 361,870,000; 
Share of Benefits: 27%. 

Program: Student loan interest deduction: $60,001 to 80,000; 

Estimate; 
Total Benefits: 204,966,000; 
Share of Benefits: 15%. 

Lower bound; 
Total Benefits: 191,187,000; 
Share of Benefits: 14%. 

Upper bound; 
Total Benefits: 218,745,000; 
Share of Benefits: 16%. 

Program: Student loan interest deduction: $80,001 to 100,000; 

Estimate; 
Total Benefits: 177,270,000; 
Share of Benefits: 13%. 

Lower bound; 
Total Benefits: 162,802,000; 
Share of Benefits: 12%. 

Upper bound; 
Total Benefits: 191,737,000; 
Share of Benefits: 14%. 

Program: Student loan interest deduction: Over $100,000; 
Estimate; 
Total Benefits: 282,212,000; 
Share of Benefits: 21%. 

Lower bound; 
Total Benefits: 262,376,000; 
Share of Benefits: 20%. 

Upper bound; 
Total Benefits: 302,047,000; 
Share of Benefits: 22%. 

Program: Parental exemption for students ages 19-23: $0 to 20,000; 

Estimate; 
Total Benefits: 49,874,000; 
Share of Benefits: 1%. 

Program : Lower bound; 
Total Benefits: 41,344,000; 
Share of Benefits: 1%. 

Upper bound; 
Total Benefits: 58,404,000; 
Share of Benefits: 1%. 

Program: Parental exemption for students ages 19-23: $20,001 to 40,000; 

Estimate; 
Total Benefits: 615,251,000; 
Share of Benefits: 12%. 

Lower bound; 
Total Benefits: 580,580,000; 
Share of Benefits: 11%. 

Upper bound; 
Total Benefits: 649,922,000; 
Share of Benefits: 12%. 

Program: Parental exemption for students ages 19-23: $40,001 to 60,000; 

Estimate; 
Total Benefits: 669,819,000; 
Share of Benefits: 13%. 

Lower bound; 
Total Benefits: 629,216,000; 
Share of Benefits: 12%. 

Upper bound; 
Total Benefits: 710,422,000; 
Share of Benefits: 13%. 

Program: Parental exemption for students ages 19-23: $60,001 to 80,000; 

Estimate; 
Total Benefits: 675,441,000; 
Share of Benefits: 13%. 

Lower bound; 
Total Benefits: 631,910,000; 
Share of Benefits: 12%. 

Upper bound; 
Total Benefits: 718,972,000; 
Share of Benefits: 13%. 

Program: Parental exemption for students ages 19-23: $80,001 to 
100,000; 

Estimate; 
Total Benefits: 662,782,000; 
Share of Benefits: 12%. 

Lower bound; 
Total Benefits: 615,339,000; 
Share of Benefits: 12%. 

Upper bound; 
Total Benefits: 710,224,000; 
Share of Benefits: 13%. 

Program: Parental exemption for students ages 19-23: Over $100,000; 

Estimate; 
Total Benefits: 2,664,082,000; 
Share of Benefits: 50%. 

Lower bound; 
Total Benefits: 2,574,733,000; 
Share of Benefits: 49%. 

Upper bound; 
Total Benefits: 2,753,432,000; 
Share of Benefits: 51%. 

Program: American opportunity credit: $0 to 20,000; 

Estimate; 
Total Benefits: 2,410,738,000; 
Share of Benefits: 15%. 

Lower bound; 
Total Benefits: 2,307,901,000; 
Share of Benefits: 14%. 

Upper bound; 
Total Benefits: 2,513,574,000; 
Share of Benefits: 16%. 

Program: American opportunity credit: $20,001 to 40,000; 

Estimate; 
Total Benefits: 3,415,061,000; 
Share of Benefits: 21%. 

Lower bound; 
Total Benefits: 3,252,942,000; 
Share of Benefits: 20%. 

Upper bound; 
Total Benefits: 3,577,180,000; 
Share of Benefits: 22%. 

Program: American opportunity credit: $40,001 to 60,000; 

Estimate; 
Total Benefits: 2,592,059,000; 
Share of Benefits: 16%. 

Lower bound; 
Total Benefits: 2,434,984,000; 
Share of Benefits: 15%. 

Upper bound; 
Total Benefits: 2,749,134,000; 
Share of Benefits: 17%. 

Program: American opportunity credit: $60,001 to 80,000; 

Estimate; 
Total Benefits: 2,228,655,000; 
Share of Benefits: 14%. 

Lower bound; 
Total Benefits: 2,077,074,000; 
Share of Benefits: 13%. 

Upper bound; 
Total Benefits: 2,380,236,000; 
Share of Benefits: 15%. 

Program: American opportunity credit: $80,001 to 100,000; 

Estimate; 
Total Benefits: 1,795,974,000; 
Share of Benefits: 11%. 

Lower bound; 
Total Benefits: 1,653,340,000; 
Share of Benefits: 10%. 

Upper bound; 
Total Benefits: 1,938,607,000; 
Share of Benefits: 12%. 

Program: American opportunity credit: Over $100,000; 
Estimate; 
Total Benefits: 3,526,694,000; 
Share of Benefits: 22%. 

Lower bound; 
Total Benefits: 3,333,288,000; 
Share of Benefits: 21%. 

Upper bound; 
Total Benefits: 3,720,101,000; 
Share of Benefits: 23%. 

Program: Lifetime learning credit: $0 to 20,000; 

Estimate; 
Total Benefits: 177,536,000; 
Share of Benefits: 7%. 

Lower bound; 
Total Benefits: 157,273,000; 
Share of Benefits: 7%. 

Upper bound; 
Total Benefits: 197,800,000; 
Share of Benefits: 8%. 

Program: Lifetime learning credit: $20,001 to 40,000; 

Estimate; 
Total Benefits: 717,486,000; 
Share of Benefits: 30%. 

Lower bound; 
Total Benefits: 657,953,000; 
Share of Benefits: 28%. 

Upper bound; 
Total Benefits: 777,019,000; 
Share of Benefits: 32%. 

Program: Lifetime learning credit: $40,001 to 60,000; 

Estimate; 
Total Benefits: 573,645,000; 
Share of Benefits: 24%. 

Lower bound; 
Total Benefits: 516,394,000; 
Share of Benefits: 22%. 

Upper bound; 
Total Benefits: 630,896,000; 
Share of Benefits: 26%. 

Program: Lifetime learning credit: $60,001 to 80,000; 

Estimate; 
Total Benefits: 453,702,000; 
Share of Benefits: 19%. 

Lower bound; 
Total Benefits: 397,276,000; 
Share of Benefits: 17%. 

Upper bound; 
Total Benefits: 510,129,000; 
Share of Benefits: 21%. 

Program: Lifetime learning credit: $80,001 to 100,000; 

Estimate; 
Total Benefits: 375,959,000; 
Share of Benefits: 16%. 

Lower bound; 
Total Benefits: 324,105,000; 
Share of Benefits: 14%. 

Upper bound; 
Total Benefits: 427,813,000; 
Share of Benefits: 18%. 

Program: Lifetime learning credit: Over $100,000; 

Estimate; 
Total Benefits: 113,646,000; 
Share of Benefits: 5%. 

Lower bound; 
Total Benefits: 88,031,000; 
Share of Benefits: 4%. 

Upper bound; 
Total Benefits: 139,261,000; 
Share of Benefits: 6%. 

Program: Earned Income Tax Credit for students ages 19-23: $0 to 
20,000; 

Estimate; 
Total Benefits: 2,012,304,000; 
Share of Benefits: 61%. 

Program : Lower bound; 
Total Benefits: 1,864,847,000; 
Share of Benefits: 59%. 

Upper bound; 
Total Benefits: 2,159,760,000; 
Share of Benefits: 64%. 

Program: Earned Income Tax Credit for students ages 19-23: $20,001 to 
40,000; 

Estimate; 
Total Benefits: 1,271,618,000; 
Share of Benefits: 39%. 

Lower bound; 
Total Benefits: 1,174,598,000; 
Share of Benefits: 36%. 

Upper bound; 
Total Benefits: 1,368,639,000; 
Share of Benefits: 41%. 

Program: Earned Income Tax Credit for students ages 19-23: $40,001 to 
60,000; 

Estimate; 
Total Benefits: [A]; 
Share of Benefits: 0%. 

Lower bound; 
Total Benefits: [A]; 
Share of Benefits: 0%. 

Upper bound; 
Total Benefits: [A]; 
Share of Benefits: 0%. 

Program: Earned Income Tax Credit for students ages 19-23: $60,001 to 
80,000; 

Estimate; 
Total Benefits: 0; 
Share of Benefits: 0%. 

Lower bound; 
Total Benefits: 0; 
Share of Benefits: 0%. 

Upper bound; 
Total Benefits: 0; 
Share of Benefits: 0%. 

Program: Earned Income Tax Credit for students ages 19-23: $80,001 to 
100,000; 

Estimate; 
Total Benefits: 0; 
Share of Benefits: 0%. 

Lower bound; 
Total Benefits: 0; 
Share of Benefits: 0%. 

Upper bound; 
Total Benefits: 0; 
Share of Benefits: 0%. 

Program: Earned Income Tax Credit for students ages 19-23: Over 
$100,000; 

Estimate; 
Total Benefits: 0; 
Share of Benefits: 0%. 

Lower bound; 
Total Benefits: 0; 
Share of Benefits: 0%. 

Upper bound; 
Total Benefits: 0; 
Share of Benefits: 0%. 

Source: GAO analysis of IRS SOI data. 

Note: Numbers may not add due to rounding. Our estimates for the 
percentage of filers claiming the tuition and fees deduction and the 
student loan interest deduction only include those filers who reduced 
their tax liability by claiming these deductions: 

[A] Cannot provide estimate because of sample size. 

[End of table] 

Table 14: Text to Accompany Interactive Figure 8: Number and 
Percentage of Tax Filers Claiming Higher Education Tax Expenditures 
and Total Benefits, by Income Category, 2009 (Information for Roll-
over): 

Program: Tuition and fees deduction: $0 to 20,000; 

Estimate; 
Number of Filers: 94,000; 
Share of Recipients: 6%. 

Lower bound; 
Number of Filers: 75,000; 
Share of Recipients: 5%. 

Upper bound; 
Number of Filers: 113,000; 
Share of Recipients: 7%. 

Program: Tuition and fees deduction: $20,001 to 40,000; 

Estimate; 
Number of Filers: 233,000; 
Share of Recipients: 14%. 

Lower bound; 
Number of Filers: 203,000; 
Share of Recipients: 12%. 

Upper bound; 
Number of Filers: 264,000; 
Share of Recipients: 16%. 

Program: Tuition and fees deduction: $40,001 to 60,000; 

Estimate; 
Number of Filers: 321,000; 
Share of Recipients: 19%. 

Lower bound; 
Number of Filers: 286,000; 
Share of Recipients: 17%. 

Upper bound; 
Number of Filers: 356,000; 
Share of Recipients: 21%. 

Program: Tuition and fees deduction: $60,001 to 80,000; 

Estimate; 
Number of Filers: 250,000; 
Share of Recipients: 15%. 

Lower bound; 
Number of Filers: 219,000; 
Share of Recipients: 13%. 

Upper bound; 
Number of Filers: 281,000; 
Share of Recipients: 17%. 

Program: Tuition and fees deduction: $80,001 to 100,000; 

Estimate; 
Number of Filers: 139,000; 
Share of Recipients: 8%. 

Lower bound; 
Number of Filers: 115,000; 
Share of Recipients: 7%. 

Upper bound; 
Number of Filers: 162,000; 
Share of Recipients: 10%. 

Program: Tuition and fees deduction: Over $100,000; 

Estimate; 
Number of Filers: 628,000; 
Share of Recipients: 38%. 

Lower bound; 
Number of Filers: 580,000; 
Share of Recipients: 35%. 

Upper bound; 
Number of Filers: 676,000; 
Share of Recipients: 40%. 

Program: Student loan interest deduction: $0 to 20,000; 

Estimate; 
Number of Filers: 692,000; 
Share of Recipients: 8%. 

Lower bound; 
Number of Filers: 641,000; 
Share of Recipients: 7%. 

Upper bound; 
Number of Filers: 744,000; 
Share of Recipients: 8%. 

Program: Student loan interest deduction: $20,001 to 40,000; 

Estimate; 
Number of Filers: 2,335,000; 
Share of Recipients: 26%. 

Lower bound; 
Number of Filers: 2,241,000; 
Share of Recipients: 25%. 

Upper bound; 
Number of Filers: 2,429,000; 
Share of Recipients: 27%. 

Program: Student loan interest deduction: $40,001 to 60,000; 

Estimate; 
Number of Filers: 2,059,000; 
Share of Recipients: 23%. 

Lower bound; 
Number of Filers: 1,971,000; 
Share of Recipients: 22%. 

Upper bound; 
Number of Filers: 2,147,000; 
Share of Recipients: 24%. 

Program: Student loan interest deduction: $60,001 to 80,000; 

Estimate; 
Number of Filers: 1,524,000; 
Share of Recipients: 17%. 

Lower bound; 
Number of Filers: 1,449,000; 
Share of Recipients: 16%. 

Upper bound; 
Number of Filers: 1,600,000; 
Share of Recipients: 18%. 

Program: Student loan interest deduction: $80,001 to 100,000; 

Estimate; 
Number of Filers: 1,042,000; 
Share of Recipients: 12%. 

Lower bound; 
Number of Filers: 979,000; 
Share of Recipients: 11%. 

Upper bound; 
Number of Filers: 1,105,000; 
Share of Recipients: 12%. 

Program: Student loan interest deduction: Over $100,000; 

Estimate; 
Number of Filers: 1,355,000; 
Share of Recipients: 15%. 

Lower bound; 
Number of Filers: 1,286,000; 
Share of Recipients: 14%. 

Upper bound; 
Number of Filers: 1,425,000; 
Share of Recipients: 16%. 

Program: Parental exemption for students ages 19-23: $0 to 20,000; 

Estimate; 
Number of Filers: 135,000; 
Share of Recipients: 2%. 

Lower bound; 
Number of Filers: 112,000; 
Share of Recipients: 2%. 

Upper bound; 
Number of Filers: 158,000; 
Share of Recipients: 2%. 

Program: Parental exemption for students ages 19-23: $20,001 to 40,000; 

Estimate; 
Number of Filers: 1,337,000; 
Share of Recipients: 19%. 

Lower bound; 
Number of Filers: 1,266,000; 
Share of Recipients: 18%. 

Upper bound; 
Number of Filers: 1,409,000; 
Share of Recipients: 20%. 

Program: Parental exemption for students ages 19-23: $40,001 to 60,000; 

Estimate; 
Number of Filers: 1,144,000; 
Share of Recipients: 16%. 

Lower bound; 
Number of Filers: 1,078,000; 
Share of Recipients: 16%. 

Upper bound; 
Number of Filers: 1,210,000; 
Share of Recipients: 17%. 

Program: Parental exemption for students ages 19-23: $60,001 to 80,000; 

Estimate; 
Number of Filers: 1,026,000; 
Share of Recipients: 15%. 

Lower bound; 
Number of Filers: 964,000; 
Share of Recipients: 14%. 

Upper bound; 
Number of Filers: 1,088,000; 
Share of Recipients: 16%. 

Program: Parental exemption for students ages 19-23: $80,001 to 
100,000; 

Estimate; 
Number of Filers: 870,000; 
Share of Recipients: 12%. 

Lower bound; 
Number of Filers: 812,000; 
Share of Recipients: 12%. 

Upper bound; 
Number of Filers: 927,000; 
Share of Recipients: 13%. 

Program: Parental exemption for students ages 19-23: Over $100,000; 

Estimate; 
Number of Filers: 2,468,000; 
Share of Recipients: 35%. 

Lower bound; 
Number of Filers: 2,389,000; 
Share of Recipients: 34%. 

Upper bound; 
Number of Filers: 2,547,000; 
Share of Recipients: 36%. 

Program: American opportunity credit: $0 to 20,000; 

Estimate; 
Number of Filers: 2,540,000; 
Share of Recipients: 28%. 

Lower bound; 
Number of Filers: 2,442,000; 
Share of Recipients: 27%. 

Upper bound; 
Number of Filers: 2,637,000; 
Share of Recipients: 29%. 

Program: American opportunity credit: $20,001 to 40,000; 

Estimate; 
Number of Filers: 2,102,000; 
Share of Recipients: 23%. 

Lower bound; 
Number of Filers: 2,013,000; 
Share of Recipients: 22%. 

Upper bound; 
Number of Filers: 2,192,000; 
Share of Recipients: 24%. 

Program: American opportunity credit: $40,001 to 60,000; 

Estimate; 
Number of Filers: 1,262,000; 
Share of Recipients: 14%. 

Lower bound; 
Number of Filers: 1,193,000; 
Share of Recipients: 13%. 

Upper bound; 
Number of Filers: 1,332,000; 
Share of Recipients: 15%. 

Program: American opportunity credit: $60,001 to 80,000; 

Estimate; 
Number of Filers: 978,000; 
Share of Recipients: 11%. 

Lower bound; 
Number of Filers: 917,000; 
Share of Recipients: 10%. 

Upper bound; 
Number of Filers: 1,038,000; 
Share of Recipients: 11%. 

Program: American opportunity credit: $80,001 to 100,000; 

Estimate; 
Number of Filers: 764,000; 
Share of Recipients: 8%. 

Lower bound; 
Number of Filers: 710,000; 
Share of Recipients: 8%. 

Upper bound; 
Number of Filers: 818,000; 
Share of Recipients: 9%. 

Program: American opportunity credit: Over $100,000; 

Estimate; 
Number of Filers: 1,451,000; 
Share of Recipients: 16%. 

Lower bound; 
Number of Filers: 1,381,000; 
Share of Recipients: 15%. 

Upper bound; 
Number of Filers: 1,521,000; 
Share of Recipients: 17%. 

Program: Lifetime learning credit: $0 to 20,000; 

Estimate; 
Number of Filers: 480,000; 
Share of Recipients: 14%. 

Lower bound; 
Number of Filers: 437,000; 
Share of Recipients: 13%. 

Upper bound; 
Number of Filers: 523,000; 
Share of Recipients: 15%. 

Program: Lifetime learning credit: $20,001 to 40,000; 

Estimate; 
Number of Filers: 1,066,000; 
Share of Recipients: 32%. 

Lower bound; 
Number of Filers: 1,001,000; 
Share of Recipients: 30%. 

Upper bound; 
Number of Filers: 1,130,000; 
Share of Recipients: 33%. 

Program: Lifetime learning credit: $40,001 to 60,000; 

Estimate; 
Number of Filers: 727,000; 
Share of Recipients: 22%. 

Lower bound; 
Number of Filers: 674,000; 
Share of Recipients: 20%. 

Upper bound; 
Number of Filers: 780,000; 
Share of Recipients: 23%. 

Program: Lifetime learning credit: $60,001 to 80,000; 

Estimate; 
Number of Filers: 518,000; 
Share of Recipients: 15%. 

Lower bound; 
Number of Filers: 473,000; 
Share of Recipients: 14%. 

Upper bound; 
Number of Filers: 563,000; 
Share of Recipients: 17%. 

Program: Lifetime learning credit: $80,001 to 100,000; 

Estimate; 
Number of Filers: 437,000; 
Share of Recipients: 13%. 

Lower bound; 
Number of Filers: 396,000; 
Share of Recipients: 12%. 

Upper bound; 
Number of Filers: 478,000; 
Share of Recipients: 14%. 

Program: Lifetime learning credit: Over $100,000; 

Estimate; 
Number of Filers: 150,000; 
Share of Recipients: 4%. 

Lower bound; 
Number of Filers: 126,000; 
Share of Recipients: 4%. 

Upper bound; 
Number of Filers: 173,000; 
Share of Recipients: 5%. 

Program: Earned Income Tax Credit for students ages 19-23: $0 to 
20,000; 

Estimate; 
Number of Filers: 878,000; 
Share of Recipients: 49%. 

Program : Lower bound; 
Number of Filers: 820,000; 
Share of Recipients: 47%. 

Upper bound; 
Number of Filers: 936,000; 
Share of Recipients: 52%. 

Program: Earned Income Tax Credit for students ages 19-23: $20,001 to 
40,000; 

Estimate; 
Number of Filers: 875,000; 
Share of Recipients: 49%. 

Lower bound; 
Number of Filers: 817,000; 
Share of Recipients: 47%. 

Upper bound; 
Number of Filers: 933,000; 
Share of Recipients: 51%. 

Program: Earned Income Tax Credit for students ages 19-23: $40,001 to 
60,000; 

Estimate; 
Number of Filers: 27,000; 
Share of Recipients: 2%. 

Lower bound; 
Number of Filers: 17,000; 
Share of Recipients: 1%. 

Upper bound; 
Number of Filers: 38,000; 
Share of Recipients: 2%. 

Program: Earned Income Tax Credit for students ages 19-23: $60,001 to 
80,000; 

Estimate; 
Number of Filers: [A]; 
Share of Recipients: [A]. 

Lower bound; 
Number of Filers: [A]; 
Share of Recipients: [A]. 

Upper bound; 
Number of Filers: [A]; 
Share of Recipients: [A]. 

Program: Earned Income Tax Credit for students ages 19-23: $80,001 to 
100,000; 

Estimate; 
Number of Filers: [A]; 
Share of Recipients: [A]. 

Lower bound; 
Number of Filers: [A]; 
Share of Recipients: [A]. 

Upper bound; 
Number of Filers: [A]; 
Share of Recipients: [A]. 

Program: Earned Income Tax Credit for students ages 19-23: Over 
$100,000; 

Estimate; 
Number of Filers: [A]; 
Share of Recipients: [A]. 

Lower bound; 
Number of Filers: [A]; 
Share of Recipients: [A]. 

Upper bound; 
Number of Filers: [A]; 
Share of Recipients: [A]. 

Source: GAO analysis of IRS SOI data. 

Note: Numbers may not add due to rounding. Our estimates for the 
percentage of filers claiming the tuition and fees deduction and the 
student loan interest deduction only include those filers who reduced 
their tax liability by claiming these deductions. 

[A] Cannot provide estimate because of sample size. 

[End of table] 

Appendix IV: Comments from the Department of Education: 

United States Department of Education: 
Office of Postsecondary Education: 
The Assistant Secretary: 
1990 K St. NW: 
Washington, DC 20006: 
[hyperlink, http://www.ed.gov] 

May 7 2012: 

George A. Scott: 
Director, Education, Workforce, and Income Security Issues: 
United States Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Scott: 

Thank you for providing an opportunity for the U.S. Department of 
Education (Department) to review and comment on the Government 
Accountability Office (GAO) draft report entitled "Higher Education: 
Improved Tax Information Could Help Families Pay for College"
(GAO-12-560; Job Code 450905). The report includes the following 
recommendations for executive action: 

Recommendation 1: To help ensure individuals who are eligible to claim 
a higher education tar expenditure are aware of their eligibility and 
the benefit they may receive, we recommend that the Commissioner of 
Internal Revenue and the Secretary of Education work together to: 

* Identify characteristics of tax filers who are not claiming a higher 
education tax expenditure when they appear to be eligible for one and 
possible reasons for this, and; 

* Use this information to identify strategies to improve information 
provided to eligible students and families. 

Response: The Department is supportive of the goals of this 
recommendation. However, the Department does not currently have 
jurisdiction over or access to tax data to determine which filers may 
be eligible for tax benefits but have not claimed such benefits, or 
their reasons for not claiming such benefits. The Department will 
continue its efforts to work with the IRS to review a number of 
underlying issues relevant to meeting the recommendation as drafted. 
Once individuals are in fact identified by the IRS, we can work with 
the Commissioner to explore how best the Department of Education may 
assist in outreach to those individuals. 

The Department works diligently to disseminate widely information 
about how to finance higher education. In particular, the Department 
provides tools to families to enable them to make informed decisions, 
including College Navigator [hyperlink, 
https://nces.ed.gov/collegenavigator/], and the College Affordability 
and Transparency Center [hyperlink, http://collegecosted.gov/]. We 
currently disseminate information to the public about the availability 
of tax benefits, and, in fact, we include a link to the Internal 
Revenue's Web site and its Publication 970, Tax Benefits for
Education in our relevant publications and Web sites. 

We are happy to work with the Commissioner of Internal Revenue to 
further disseminate information about these important resources to 
students and families. We commit our support and willingness to work 
with the Internal Revenue Service in a way the Commissioner deems 
appropriate and helpful in responding to the recommendation. 

Recommendation 2: To provide federal policy makers information on the 
relative effectiveness of Title IV programs and higher education tax 
expenditures, we recommend the Secretary of Education take advantage 
of opportunities presented by recent and anticipated substantive
program changes to sponsor and conduct evaluative research into the 
effectiveness of Title IV programs and higher education tax 
expenditures at improving student outcomes. 

Response: The Department recognizes the need for additional research, 
and it continues to fund and conduct, with the Institute of Education 
Science (IES), research on the effectiveness of Title IV student aid 
on student success. The Department is committed to a careful 
examination of whether financial aid data can be made available to 
researchers for evaluative research, taking into consideration both 
the benefits of research and concerns of student privacy. We believe 
strongly in data-based decision making and, in turn, making data 
available to policy makers to better inform program policy decisions. 

Again, thank you for the opportunity to review this draft report. You 
will find enclosed some technical issues we found when reviewing the 
report. 

Sincerely, 

Signed by: 

David A. Beyers, for: 

Eduardo M. Ochoa: 

Enclosure: 

[End of section] 

Appendix V: Comments from the Internal Revenue Service: 

Department of The Treasury: 
Internal Revenue Service: 
Deputy Commissioner: 
Washington, D.C. 20224 

May 9, 2012: 

Mr. James R. White: 
Director, Tax Issues: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Mr. White: 

I have reviewed your draft report entitled Higher Education: Improved 
Tax Information Could Help Families Pay for College (GAO-12-560). The 
IRS agrees that improved clarity around higher education tax benefits 
can assist taxpayers in determining which provisions will yield the 
greatest benefit. 

The complexity faced by taxpayers in determining qualification 
requirements for higher education benefits discussed in your report 
also presents challenges to the IRS in assessing whether taxpayers 
have chosen the maximum benefits to which they are entitled. In many 
cases, the nuances of each taxpayer's situation affecting their 
eligibility for education credits or deductions are not evident by 
information reported on their tax return or by information reported by 
educational institutions on Form 1098-T, Tuition Statement. For this 
reason, education and outreach are considered effective means of 
addressing the issue. 

To increase the visibility of benefits available for higher education, 
the IRS has endeavored to educate students, taxpayers, tax 
professionals, and tax return preparation software developers through 
targeted outreach efforts. We have also provided information through 
online and print media. We will continue to look for improvements that 
can be made to our educational strategies and tax products. 

Regarding the GAO's recommendation to identify characteristics of 
taxpayers claiming sub-optimal benefits and devising strategies to 
improve the information available to them, we will continue to work 
with the Department of Education to assist in identifying 
opportunities where additional outreach to taxpayers is appropriate. 

If you have any questions, Finance, Wage and Investment please contact 
Robin L. Canady, Director, Strategy and Division, at (404) 338-8801. 

Sincerely, 

Signed by: 

Steven T. Miller: 
Deputy Commissioner for Services and Enforcement: 

Enclosure: 

[End of letter] 

Enclosure: 

Recommendation: 

To help ensure individuals who are eligible to claim a higher 
education tax expenditure are aware of their eligibility and the 
benefit they may receive, we recommend that the Commissioner of 
Internal Revenue and the Secretary of Education work together to: 

* Identify characteristics of tax filers who are not claiming a higher 
education tax expenditure when they appear to be eligible for one and 
possible reasons for this, and; 

* Use this information to identify strategies to improve information 
provided to eligible students and families. 

Response: 

The IRS agrees that a clear understanding of higher education tax 
benefits is critical for taxpayers to make informed decisions 
affecting the credits and benefits to which they are entitled. We will 
continue to work with the Department of Education to assist in 
identifying opportunities where additional outreach to taxpayers is 
appropriate. 

We are taking steps to simplify the decision-making process faced by 
taxpayers in determining those education credits for which they are 
eligible. Form 8863, Education Credits (American Opportunity and 
Lifetime Learning Credits), is being revised for the 2012 tax year to 
use a series of questions for the taxpayer to ascertain credit 
eligibility on a per-student basis. The revised form will also assist 
taxpayers in better understanding and using the information reported 
to them by educational institutions on Form 1098-T, Tuition Statement. 

[End of section] 

Appendix VI: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

James R. White, Director, Tax Issues, Strategic Issues Team, (202) 512-
9110 or whitej@gao.gov. 

George A. Scott, Director, Education, Workforce, and Income Security 
Issues, (202) 512-7215 or scottg@gao.gov. 

Staff Acknowledgments: 

In addition to the contacts named above, Michael Brostek (Director), 
David Lewis and Tranchau (Kris) Nguyen (Assistant Directors), Patrick 
Dudley, Shannon Finnegan, John Mingus, Amy Moran Lowe, Tom Moscovitch, 
Erika Navarro, and Mark Ramage made key contributions to this report. 
Also contributing to this report were JoAnna Berry, Jessica Botsford, 
Amy Bowser, Andrew Ching, Susannah Compton, Michele Fejfar, Donna 
Miller, Edward Nannenhorn, Mimi Nguyen, and Melanie Papasian. 

[End of section] 

Bibliography: 

To identify available academic research on the effects of Title IV aid 
programs and higher education tax expenditures within our research 
scope, we reviewed studies published since 2005 that examined whether 
the programs or tax expenditures affect college choice, attendance, 
persistence, and completion. Of the over 300 studies we identified, we 
included in our review only 12 studies that met the following 
criteria: (1) provide original empirical data analyses according to 
professional standards of econometric analysis for methodological 
rigor, (2) contain acceptably identified statistical estimates, or (3) 
are cited in studies by other researchers. We used the results of the 
studies that we judged to contain acceptably identified statistical 
estimates to form the basis of the findings about the availability of 
information concerning the relative effectiveness of major federal 
financial assistance programs. See appendix I for a detailed 
description of our methodology. 

Studies Meeting GAO's Search Criteria: 

Akers, Beth. Excess Sensitivity of Labor Supply and Educational 
Attainment: Evidence from Variation in Student Loan Debt. New York 
City, NY: Columbia University Job Market Paper, 2011. Accessed March 
20, 2012. http://www.columbia.edu/~eja2105/research.html. 

Cellini, Stephanie R. "Financial Aid and For-Profit Colleges: Does Aid 
Encourage Entry?" Journal of Policy Analysis and Management, vol. 29, 
no. 3 (2010): 526-552. 

Curs, Bradley R., Larry D. Singell, and Glen R.Waddell. "Money for 
Nothing? The Impact of Changes in the Pell Grant Program on 
Institutional Revenues and the Placement of Needy Students." Education 
Finance and Policy, vol. 2, no. 3 (2007): 228-261. 

Dowd, Alicia and Tarek Coury. "The Effect of Loans on the Persistence 
and Attainment of Community College Students." Research in Higher 
Education vol. 47, no. 1 (2006): 33-62. 

Dunlop, Erin R.. "What do Stafford Loans Actually Buy You? -The Effect 
of Stafford Loan Access on Community College Students." 
Charlottesville, VA: University of Virginia Job Market Paper, 2011. 
Accessed March 12, 2012. 
people.virginia.edu/~erd2r/Dunlop_job_market_paper_11.9.pdf. 

Herzog, Serge. "Measuring Determinants of Student Return vs. Dropout/ 
Stopout vs. Transfer: A First-to-Second Year Analysis of New 
Freshmen." Research in Higher Education vol. 46, no. 8, (2005): 883-
928. 

Kitmitto, Sami Tayseer. The Pell Grant Puzzle: An Inquiry into the 
Program's Effects on College Enrollment and One Explanatory 
Hypothesis. PhD diss., University of California Davis, 2006. ProQuest 
Dissertation Publishing. Accessed December 8, 2011. 

LaLumia, Sara. "Tax Preferences for Higher Education and Adult College 
Enrollment." National Tax Journal, vol. 65, no. 1 (2012): 59-89. 

Long, Bridget Terry. Do Loans Increase College Access and Choice? 
Examining the Introduction of Universal Student Loans. Boston, MA: New 
England Public Policy Center at the Federal Reserve Bank of Boston, 
2007 (NEPPC Working Paper 07-1). 

Mendez, Jessie P., Pilar Mendoza, and Zaria Malcolm. "The Impact of 
Financial Aid on Native American Students." Journal of Diversity in 
Higher Education, vol. 4, no. 1 (2011): 12-25. 

Scott-Clayton, Judith. "The Causal Effect of Federal Work-Study 
Participation: Quasi-Experimental Evidence from West Virginia." 
Educational Evaluation and Policy Analysis, vol. 33, no. 4 (2011): 506-
527. 

Turner, Nicholas. "The Effect of Tax-Based Federal Student Aid on 
College Enrollment." National Tax Journal vol. 64, no. 3 (2011): 839-
862. 

Other Relevant Studies: 

Although evaluative research linking federal assistance to student 
college choice, attendance, persistence, and completion is limited, we 
found examples of studies on the effects of nonfederal student-aid 
programs, including regional and institutional financial aid programs. 
Our selection of non-federal studies is not exhaustive. We also found 
related research, including studies on the responses of institutions 
of higher education to federal assistance. Examples of these studies 
are listed below. 

Avery, Christopher, and Sarah E. Turner. "Playing the College 
Application Game: Critical Moves and the Link to Socio-Economic 
Circumstances." Paper presented at the National Bureau of Economic 
Research Education Program, California, November 2009. 

Avery, Christopher, Caroline Hoxby, Clement Jackson, Kaitlin Burek, 
Glenn Poppe, and Mridula Raman. "Cost Should Be No Barrier: An 
Evaluation of the First Year of Harvard's Financial Aid Initiative." 
National Bureau of Economic Research Working Paper 12029, Cambridge, 
MA, 2006. 

Bettinger, Eric P., Bridget Terry Long, Philip Oreopoulos, and Lisa 
Sanbonmatsu. The Role of Simplification and Information in College 
Decisions: Results from the H&R Block FAFSA Experiment. Cambridge, MA: 
National Bureau of Economic Research Working Paper 15361, 2009. 

Bowen, William G., Matthew M. Chingos, and Michael S. McPherson. 
Crossing the Finish Line: Completing College at America's Public 
Universities. Princeton, NJ: Princeton University Press, 2009. 

Cellini, Stephanie R., and Claudia Goldin. "Does Federal Student Aid 
Raise Tuition? New Evidence on For-Profit Colleges." National Bureau 
of Economic Research Working Paper 17827, Cambridge, MA, 2012. 

Goldrick-Rab, Sara, Douglas N. Harris, James Benson, and Robert 
Kelchen. "Conditional Cash Transfers and College Persistence: Evidence 
from a Randomized Need-Based Grant Program." Institute for Research on 
Poverty Discussion Paper no. 1393-11, Madison, WI, 2011. 

Patel, Reshma. and Lashawn Richburg-Hayes. "Performance-Based 
Scholarships: Emerging Findings from a National Demonstration." New 
York, NY: MDRC Testimony Submitted to the Advisory Committee on 
Student Financial Assistance, 2011. 

Roderick, Melissa, Jenny Nagaoka, Vanessa Coca, and Eliza Moeller. 
From High School to the Future: Making Hard Work Pay Off. Chicago, IL: 
Consortium on Chicago School Research at the University of Chicago 
Urban Education Institute, 2009. 

Singell, Larry D. Jr. and Joe A. Stone. "For Whom the Pell Tolls: The 
Response of University Tuition to Federal Grants-in-Aid." Economics of 
Education Review, vol. 26, (2007): 285-295. 

Scott-Clayton, Judith. "On Money and Motivation: A Quasi-Experimental 
Analysis of Financial Incentives for College Achievement." The Journal 
of Human Resources, vol. 46, no. 3 (2011): 614-646. 

Turner, Lesley J. "The Incidence of Student Financial Aid: Evidence 
from the Pell Grant Program." New York, NY: Columbia University Job 
Market Paper, 2012. Accessed March 15, 2012. 

Turner, Nicholas. "Who Benefits from Student Aid? The Economic 
Incidence of Tax-Based Federal Student Aid." Economics of Education 
Review (forthcoming). 

[End of section] 

Related GAO Products: 

Federal Statistical System: Agencies Can Make Greater Use of Existing 
Data, but Continued Progress Is Needed on Access and Quality Issues. 
[hyperlink, http://www.gao.gov/products/GAO-12-54]. Washington, D.C.: 
February 24, 2012. 

Opportunities to Reduce Potential Duplication in Government Programs, 
Save Tax Dollars, and Enhance Revenue. [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP]. Washington, D.C.: March 1, 
2011. 

Postsecondary Education: Many States Collect Graduates' Employment 
Information, but Clearer Guidance on Student Privacy Requirements Is 
Needed. [hyperlink, http://www.gao.gov/products/GAO-10-927]. 
Washington, D.C.: September 27, 2010. 

Federal Student Aid: Highlights of a Study Group on Simplifying the 
Free Application for Federal Student Aid. [hyperlink, 
http://www.gao.gov/products/GAO-10-29]. Washington, D.C.: October 29, 
2009. 

Higher Education: Multiple Higher Education Tax Incentives Create 
Opportunities for Taxpayers to Make Costly Mistakes. [hyperlink, 
http://www.gao.gov/products/GAO-08-717T]. Washington, D.C.: May 1, 
2008. 

Postsecondary Education: Multiple Tax Preferences and Title IV Student 
Aid Programs Create a Complex Education Financing Environment. 
[hyperlink, http://www.gao.gov/products/GAO-07-262T]. Washington, 
D.C.: December 5, 2006. 

Government Performance and Accountability: Tax Expenditures Represent 
a Substantial Federal Commitment and Need to Be Reexamined. 
[hyperlink, http://www.gao.gov/products/GAO-05-690]. Washington, D.C.: 
September 23, 2005. 

Understanding the Tax Reform Debate: Background, Criteria, & 
Questions. [hyperlink, http://www.gao.gov/products/GAO-05-1009SP]. 
Washington, D.C.: September 1, 2005. 

Student Aid and Postsecondary Tax Preferences: Limited Research Exists 
on Effectiveness of Tools to Assist Students and Families through 
Title IV Student Aid and Tax Preferences. [hyperlink, 
http://www.gao.gov/products/GAO-05-684]. Washington, D.C.: July 29, 
2005. 

Means-Tested Programs: Information on Program Access Can Be an 
Important Management Tool. [hyperlink, 
http://www.gao.gov/products/GAO-05-221]. Washington, D.C.: March 11, 
2005. 

Student Aid and Tax Benefits: Better Research and Guidance will 
Facilitate Comparison of Effectiveness and Student Use. [hyperlink, 
http://www.gao.gov/products/GAO-02-751]. Washington, D.C.: September 
13, 2002. 

[End of section] 

Footnotes: 

[1] GAO, Higher Education: Multiple Higher Education Tax Incentives 
Create Opportunities for Taxpayers to Make Costly Mistakes, 
[hyperlink, http://www.gao.gov/products/GAO-08-717T] (Washington, 
D.C.: May 1, 2008) and Student Aid and Postsecondary Tax Preferences: 
Limited Research Exists on Effectiveness of Tools to Assist Students 
and Families through Title IV Student Aid and Tax Preferences, 
[hyperlink, http://www.gao.gov/products/GAO-05-684] (Washington, D.C.: 
July 29, 2005). 

[2] Pub. L. No. 111-352, 124 Stat. 3866 (Jan. 4, 2011). 

[3] Persistence is the likelihood that students will continue their 
education. 

[4] See appendix I for details on our research scope. In total, we 
examined seven Title IV programs and eight tax expenditures. Program 
descriptions for each are provided in appendix II. 

[5] See appendix I for a full discussion of our methodology and its 
limitations. 

[6] All taxpayers subject to regular tax are also subject to the 
alternative minimum tax, regardless of the income tax bracket or 
whether they claim certain exclusions, deductions, or credits. 
Taxpayers may be limited in the credits they can claim based on their 
alternative minimum tax calculations. 

[7] [hyperlink, http://www.gao.gov/products/GAO-05-684]. These student 
outcomes are used in higher education research and have been the focus 
of congressional concern as expressed in requests for our work from 
Congress and a statutorily established study committee report. While 
researchers have studied other metrics to measure student outcomes, 
such as labor market outcomes, these are outside the scope of this 
review. 

[8] These totals do not include all Title IV programs or higher 
education provisions listed in the Publication 970 Tax Benefits for 
Education. For details on which programs and tax expenditures we 
excluded from this review, see appendix II. 

[9] This total does not include consolidation loans--which allow 
borrowers to combine one or more of their federal education loans into 
a new loan--because these loans are outside the scope of this report. 
Throughout this report, we present the face value of Title IV loans 
awarded to students, rather than their economic subsidy value to the 
student or the credit subsidy cost--the estimated long-term cost to 
the government of a direct loan or loan guarantee. Although Title IV 
loans must be repaid, they can provide a subsidy by offering funds to 
students who could not otherwise find lenders and by offering lower 
interest rates than are available in the non-Title IV private loan 
market. 

[10] This is the net sum of estimates from the Fiscal Year 2012 
Analytical Perspectives, Budget of the U.S. Government for the 
following tax expenditures: American opportunity credit, lifetime 
learning credit, tuition and fees deduction, student loan interest 
deduction, state prepaid tuition plans (a type of qualified tuition 
program), Coverdell education savings accounts, and the parental 
exemption for students aged 19 to 23. Sums of tax expenditure 
estimates must be interpreted carefully. While summing the individual 
tax expenditure estimates is useful for gauging the general magnitude 
of the federal revenue involved, it does not take into account 
possible interactions between the individual tax code provisions. 

[11] Specifically, these programs are Federal Work-Study, Federal 
Perkins Loan programs, and Federal Supplemental Education Opportunity 
Grants (FSEOG). Work-study is employment in on-campus and certain off-
campus jobs that pay students at least the current federal minimum 
wage. The college or off-campus employer pays a portion of the 
student's wages, while the federal government pays the remainder. 

[12] For details on each tax provision, including the tax benefits and 
eligibility requirements, see appendix II. 

[13] The tuition deduction expired December 31, 2011, and as of May 
10, 2012, has not been extended. Tax legislation can influence this 
and other tax expenditures by repealing or limiting tax expenditures, 
enacting new ones, or extending the life of expiring tax expenditures. 

[14] The amount of tax relief per dollar that a taxpayer receives 
using a deduction depends on the taxpayer's marginal tax rate. 
Generally, the higher the taxpayer's marginal tax rate, the greater 
the tax savings from these tax expenditure types. 

[15] Adjusted gross income is defined as gross income minus 
adjustments to income. 

[16] The Higher Education Opportunity Act required all institutions 
receiving Title IV funds to provide net price calculators on their Web 
sites. Pub. L. No. 110-315, § 111, 122 Stat. 3078, 3098 (Aug. 14, 
2008), codified at 20 U.S.C. § 1015a. Schools were required to publish 
a net price calculator by October 29, 2011. 

[17] See also GAO, Federal Student Aid: Highlights of a Study Group on 
Simplifying the Free Application for Federal Student Aid, [hyperlink, 
http://www.gao.gov/products/GAO-10-29] (Washington, D.C.: Oct. 29, 
2009) and Susan Dynarski and Mark Wiederspan, Student Aid 
Simplification: Looking Back and Looking Ahead, NBER Working Paper No. 
17834 (Cambridge, MA: National Bureau of Economic Research, 2012). In 
addition, a 2009 study found that families that received information 
about aid and assistance in completing the FAFSA were substantially 
more likely to submit the aid application and enroll in college; Eric 
Bettinger et. al, The Role of Simplification and Information in 
College Decisions: Results from the H&R Block FAFSA Experiment, NBER 
Working Paper No. 15361 (Cambridge, MA: National Bureau of Economic 
Research, 2009). 

[18] In this and following sections, we estimate the tax benefit that 
tax filers receive when claiming a higher education-related tax 
provision using SOI data for tax year 2009. Our estimates only include 
those filers that have a benefit after claiming other tax benefits. 
These estimates are not equivalent to revenue loss estimates presented 
previously in the background section of this report. For example, our 
SOI estimates include the tax benefit a filer receives from claiming 
the EITC for a student ages 19-23. Revenue loss estimates for this 
specific tax expenditure are not available in Analytical Perspectives, 
Budget of the U.S. Government. Also, revenue loss estimates presented 
in the background section are for fiscal year 2010, whereas our 
analysis uses SOI data for tax year 2009. 

[19] Student loans and work-study have different terms, including 
repayment and employment, which require different methods of 
estimating costs and benefits. In contrast to Title IV grants and tax 
expenditures, the dollar value of student loans provided through Title 
IV decreased between fiscal years 2006 and 2009. The amount of loan 
assistance (face value) through the Title IV programs decreased by 
over $40 billion from $152.5 billion in 2006 to $110.4 billion in 
2009, although borrowing limits increased for Stafford and Perkins 
loans during this time. 

[20] These figures are in constant 2012 dollars. 

[21] See Julian R. Betts and Laurel L. McFarland, "Safe Port in a 
Storm: The Impact of Labor Market Conditions on Community College 
Enrollments," Journal of Human Resources 30(4), Autumn 1995, 741-765; 
Harris Dellas and Vally Koubi, "Business Cycles and Schooling," 
European Journal of Political Economy 19 (2003), 843-859; and Harris 
Dellas and Plutarchos Sakellaris, "On the Cyclicality of Schooling: 
Theory and Evidence," Oxford Economic Papers 55, January 2003, 148-172. 

[22] The maximum Pell Grant has subsequently increased to $5,550. See 
appendix II. 

[23] At the same time, the number of Pell recipients increased by 26 
percent from 6.1 million in 2008 to 7.7 million in 2009. 

[24] Dollar values in this paragraph are presented in 2012 constant 
dollars in accordance with the multiyear comparison in figure 5. 

[25] While the AOC replaced the Hope credit for most filers in 2009, 
students attending an eligible institution in a Midwestern disaster 
area were eligible for a larger Hope credit ($3,600 maximum) if they 
met eligibility requirements. 

[26] In the case of dependent students, we refer to family income. 

[27] Overall, more independent students received Title IV aid than 
dependent students in the 2007-2008 school year (12.8 million and 10.5 
million, respectively) and independent students received more benefits 
than dependent students ($52.4 billion and $36.5 billion, 
respectively). Dollar figures in this section are not adjusted for 
inflation. 

[28] A proportional 60 percent of dependent students receiving 
subsidized Stafford funds were from families with incomes $60,000 and 
below. 

[29] In 2007-2008, $4.3 billion of campus-based aid was distributed to 
dependent students compared with $2.1 billion for independent students. 

[30] The 91 percent of all FSEOG recipients with incomes $40,000 and 
under received nearly 90 percent of FSEOG funds. 

[31] Similarly, the share of work-study recipients from families with 
incomes over $100,000 grew from 8 percent in 2003-2004 to 15 percent 
in 2007-2008. 

[32] Specifically, 67 percent of tax benefits from the tuition and 
fees deduction ($419.5 million) and 75 percent of the exemption for 
dependent students ($4 billion) went to tax filers with incomes above 
$60,000 in 2009. 

[33] We are 95 percent confident that the median income of households 
with a 529 account or Coverdell ESA is between $106,460 and $138,340. 
For households without these accounts, the median income is between 
$41,439 and $45,361. 

[34] We are 95 percent confident the percentage of households with 
these accounts ranged from: 10.2 percent to 14.3 percent for 
households with incomes greater than $100,000; 2.7 percent to 5.2 
percent for households with incomes between $50,001 and $100,000; 0.37 
percent to 1.1 percent for households with incomes less than $50,000. 

[35] We use the term "suboptimal" only to describe a filer's failure 
to minimize his or her federal tax liability. Because understanding 
tax provisions' eligibility rules and calculating the optimal choice 
can be complex, filers may conclude that investing the time needed to 
maximize their benefit is not worth the effort. 

[36] [hyperlink, http://www.gao.gov/products/GAO-05-684] and 
[hyperlink, http://www.gao.gov/products/GAO-08-717T]. 

[37] For perspective, entitlement programs, which are those programs 
that provide benefits to all applicants who meet program eligibility 
criteria, have lower take-up rates than higher education tax benefits 
we reviewed in this study. We reported in 2005 that of the selected 
entitlement programs we reviewed, the proportion of those eligible for 
the program who were enrolled ranged from about 50 percent to more 
than 70 percent. While it may not be feasible for programs to serve 
100 percent of those eligible for benefits, information on take-up 
rates and on particular recipient groups can help program managers 
more effectively address issues related to program access. GAO, Means-
Tested Programs: Information on Program Access Can Be an Important 
Management Tool, [hyperlink, http://www.gao.gov/products/GAO-05-221] 
(Washington, D.C.: Mar. 11, 2005). 

[38] GAO, Understanding the Tax Reform Debate: Background, Criteria, & 
Questions, [hyperlink, http://www.gao.gov/products/GAO-05-1009SP] 
(Washington, D.C.: Sept. 1, 2005). 

[39] [hyperlink, http://www.gao.gov/products/GAO-05-684] and 
[hyperlink, http://www.gao.gov/products/GAO-08-717T]. 

[40] 26 U.S.C. § 25A(i)(2). See appendix II for a description of the 
AOC's other eligibility requirements. 

[41] In a review of individual tax returns claiming the tuition 
deduction or LLC in 2002-2008, Turner (2011) finds that roughly one 
out of four returns fail to select a provision that minimizes federal 
and state tax liabilities. One reason for this is that taxpayers, paid 
preparers, and tax software are more aware of federal tax effects than 
state tax effects, since federal tax effects are the result of an 
active choice, whereas state tax effects are not explicitly selected 
on state tax forms. See Nicholas Turner, "Why Don't Taxpayers Maximize 
their Tax-Based Student Aid? Salience and Inertia in Program 
Selection," The B.E. Journal of Economic Analysis & Policy, vol. 11, 
no. 1 (2011). 

[42] See [hyperlink, http://www.gao.gov/products/GAO-05-684]. 

[43] A bibliography of the studies we reviewed is included at the end 
of this report. 

[44] Steele, P. (2011). Suggestions for Improvements to the Collection 
and Dissemination of Federal Financial Aid Data (NPEC 2012-834). U.S. 
Department of Education. Washington, D.C.: National Postsecondary 
Education Cooperative. Available from [hyperlink, 
http://nces.ed.gov/pubsearch] (accessed Dec. 19, 2011). 

[45] We have previously reported that sharing data from a student's 
records must be done in accordance with the Family Educational Rights 
and Privacy Act (FERPA), 20 U.S.C. § 1232g, which limits the 
disclosure of those records to third parties. See [hyperlink, 
http://www.gao.gov/products/GAO-10-927], Postsecondary Education: Many 
States Collect Graduates' Employment Information, but Clearer Guidance 
on Student Privacy Requirements Is Needed (Washington, D.C.: Sept. 27, 
2010). For more information on key constraints agencies face in using 
administrative data for research, see GAO, Federal Statistical System: 
Agencies Can Make Greater Use of Existing Data, but Continued Progress 
Is Needed on Access and Quality Issues [hyperlink, 
http://www.gao.gov/products/GAO-12-54] (Washington, D.C.: Feb. 24, 
2012). 

[46] Section 529(b)(6) of the Internal Revenue Code states that a 
program shall not be treated as a qualified tuition program unless it 
provides adequate safeguards to prevent contributions on behalf of a 
designated beneficiary in excess of those necessary to provide for the 
qualified higher education expenses of the beneficiary. 

[47] In addition, Education used the introduction of two new grant 
programs under Title IV--the Academic Competitiveness Grant and 
National Science and Mathematics Access to Retain Talent Grant 
programs--to conduct evaluative research, but Education officials told 
us these programs expired prior to learning the results of their 
evaluation. Funding for these programs expired at the end of fiscal 
year 2011. 

[48] Both the National Center for Postsecondary Research and the 
Center for Postsecondary Education and Employment are research 
partnerships housed within Columbia University. The centers 
collaborate with other entities such as nonprofit organizations and 
academic institutions, as well as state partners. 

[49] See Bettinger, Long, Oreopolous, and Sanbonmatsu (2009). 

[50] Education sponsors an ongoing experiment in the use of College 
529 savings plans by families of high school students in Ohio. 

[51] Education funds such research on the basis of a competitive peer 
review of research proposals by experts in the higher education 
research community. Proposals are selected based on the strength and 
feasibility of the research design and a consideration of the 
importance of the programs being studied. For example, Education funds 
ongoing studies of a state-based student aid program in Florida, a 
state with a large population, and a local student aid program in 
Michigan that may yield lessons for similar programs used around the 
country. In some cases, this type of research might also produce 
insights that can be applied to federal student aid programs. 

[52] 20 U.S.C. § 1094a(b)(3). 

[53] The Secretary's authority to waive Title IV requirements is 
limited. For example, the Secretary can modify eligibility provisions, 
but may not generally waive provisions with respect to award rules, 
see 20 U.S.C. § 1094a(b)(3)(B). 

[54] Congress has directed Education to provide reliable information 
about the effectiveness of federal programs by conducting and 
sponsoring evaluative research. See Education Sciences Reform Act of 
2002, Pub. L. No. 107-279, 116 Stat. 1940, (Nov. 5, 2002). Standards 
for internal control in the federal government cite a number of roles 
for evaluations including control activities such as top level 
performance reviews to support goals, plans, and objectives, as well 
as reviews at the functional or activity level. Evaluations are also a 
component of relevant, reliable, and timely communications necessary 
for an agency to achieve its objectives. Evaluations conducted by 
program officials and external parties improve the agency's ability to 
assess the quality of performance over time. See GAO, Standards for 
Internal Control in the Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.: 
Nov. 1, 1999). 

[55] GAO, Government Performance and Accountability: Tax Expenditures 
Represent a Substantial Federal Commitment and Need to Be Reexamined, 
[hyperlink, http://www.gao.gov/products/GAO-05-690] (Washington, D.C.: 
Sept. 23, 2005) and Tax Policy: Tax Expenditures Deserve More 
Scrutiny, [hyperlink, http://www.gao.gov/products/GAO/GGD/AIMD-94-122] 
(Washington, D.C.: June 3, 1994). 

[56] We consulted subject-matter experts and our prior work as we 
identified these factors. See appendix I for more information on our 
methodology. 

[57] First-professional students are students pursuing degrees in 
fields such as pharmacy, dentistry, medicine, or law. 

[58] Eligible higher educational institutions must file Form 1098-T. 
An eligible educational institution that is a government unit, or an 
agency or instrumentality of a government unit, is subject to the 
reporting requirements of Form 1098-T. 

[59] All taxpayers subject to regular tax are also subject to the 
alternative minimum tax, regardless of the income tax bracket or 
whether they claim certain exclusions, deductions, or credits. 
Taxpayers may be limited in the credits they can claim based on their 
alternative minimum tax calculations. 

[60] See Daniel Feenberg and Elisabeth Coutts, "An Introduction to the 
TAXSIM Model," Journal of Policy Analysis and Management, vol. 12, no. 
1, (1993): 189-194. 

[61] [hyperlink, http://www.gao.gov/products/GAO-05-684]. 

[62] Under the Working Condition Fringe Benefit Exclusion, employer-
provided educational assistance that exceeds $5,250 in 2010 does not 
have to be counted as income, provided it is used to pay for any 
educational expenses that are required by the employer or the law to 
maintain the tax filer's present salary, status, or job and maintain 
or improve skills needed in the tax filer's present work. 

[End of section] 

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