(CNSNews.com) - Democratic Sens. Joseph Biden of Delaware and Charles Schumer of New York have proposed a bill that would increase the tax deductions available either to parents with children enrolled in college, or for individuals sending themselves to school.
The Shumer-Biden amendment under consideration by the Senate Finance Committee would reduce tuition costs by allowing up to $12,000 to be deductible from an individual's tax returns.
"A college education has become a necessity that's priced as a luxury," Shumer said.
Tuition costs have skyrocketed over the past 20 years from an average of $3,600 a year in 1980 to over $16,000 in 2000. Tuition costs have risen at a rate of nearly eight times the rate of income during the same time period.
Deductions will be available to taxpayers filing singly with an income of up to $65,550, to single heads of households with a maximum income of $93,650, and for joint filers with a maximum income of $109,250.
"We are talking about an extra $300 per month - real money that could help a hard working family make ends meet and help parents realize the dream of sending their kids to college," Biden said.
The plan is similar to one the two senators proposed during the 106th Congress, which was endorsed by then President Bill Clinton. The previous bill capped the deduction at $10,000 for individuals making $60,000 or less, or couples with $120,000 or less.
The Biden-Shumer plan would have the biggest impact on families with students enrolled in public universities. The senators maintain the credit would save the average family about $3,000 per year.
"It would be a fairly appreciable amount, especially for students going to a state school or a public university, as opposed to a private school, where $3,000 out of $30,000 might not be all that much," said Justin Heet, education analyst for the independent Hudson Institute.
"But for those who are going to a state-supported school in the $15,000 range, that's a significant amount," he added.
Members of the middle class with incomes of over $50,000 would experience the greatest amount of tax relief.
But the Biden-Shumer plan could have the unintended consequence of further increasing the costs of tuition.
"Whenever the government gives largess to colleges, it increases the demand," said Heet. "When more students can go to college, it drives up the costs of college."
The bill currently is bottled up in the Senate Finance Committee, but Democratic insiders expect the Jeffords defection to possibly speed the bill's progress to the Senate floor.