Tuition Credits to Ease College Burden

Image by Caleb Woods via Unsplash

Changes in the state’s tax law, under S.C. Tuition Tax Credit that went into effect this year could reduce college tuition bills for many South Carolina families this tax year, irrespective of income or student GPA.   The significance of this change lies in the fact that college costs in South Carolina rank the highest in the Southeast.  Carrying a lower debt load upon graduation may allow graduate school to re-enter one’s future in our state.

A new tax credit, worth up to half the tuition bill for a maximum of $1,500 is available to families of students who graduated high school in 2012 or later and entered a South Carolina college within 12 months of graduating high school as a degree-seeking undergraduate or be enrolled in a certificate or diploma program. Students must have taken at least 15 academic credits for at least one semester unless the school operates on a non-semester system, like Erskine, Wofford, and Converse.

There are a host of limitations – e.g., students in loan default, or already receiving a Life scholarship, or attending some for-profit institutions like Miller-Motte Technical College, and Virginia College are not eligible. Credits cannot be used for online studies through out-of-state institutions.

As a refundable credit, rather than a tax deduction, families don’t have to itemize to receive money back. They can even get the credit if they don’t owe any taxes. The change is thus of particular benefit to technical college students or their tuition-paying parents.

The credit was increased from one-quarter of tuition with a maximum of $350 for two-year colleges and $850 for four-year schools.

Former State Representative Seth Whipper of North Charleston was a sponsor of the legislation, one of his last acts before leaving the chamber to become a judge. The bill passed overwhelmingly, with enough votes to override a veto by Governor Henry McMaster.

In addition to the increased tuition income tax credit, other federal and state tax breaks are available for South Carolina students. The American Opportunity Tax Credit offers families paying tuition for an undergraduate with income under $90,000 (or $180,000 for a married couple filing jointly) a maximum credit of $2,500. A Lifetime Learning Credit is available for undergraduate, graduate and professional degree courses, worth up to $2,000. Income limits are $66,000 or $132,000 for married couples filing jointly.