Total Education Tax Credits and Deductions over Time

In 2016, students and parents saved about $16.6 billion on their federal income taxes through tax credits and deductions for higher education expenses. This form of subsidy was $8.8 billion (in 2016 dollars) in 2006 and $22.9 billion in 2010.

Figure 26B: Total Education Tax Credits and Savings from Tuition Deductions in Billions of 2016 Dollars, 1998 to 2016, Selected Years

Notes & Sources 

NOTES: The total and average values of tax credits and deductions are best estimates based on data from the Internal Revenue Service. A portion of nonrefundable dollars claimed on nontaxable returns is excluded to account for credits and deductions that do not reduce tax liability. The value of tax deductions is estimated based on applicable marginal tax rates. Percentages may not sum to 100 because of rounding.

SOURCES: Internal Revenue Service, Statistics of Income 1998 to 2016, Tables 1.3, 1.4, 3.3; calculations by the authors.