Tax credits and incentives have proliferated over the past several decades to help families build wealth or access higher education, but rarely at the same time. The 1990s saw the creation of the Hope and Lifetime Learning Credits to help struggling families meet the rising cost of post-secondary education, but due to complexity and access issues, they have not achieved the desired effect.
The Obama Administration and Congress improved the Hope Credit in the form of the American Opportunity Tax Credit (AOTC) last year, but much more can be done to help low-income students afford college. Likewise for the Saver's Credit. Designed as a tool to help low- and middle-income families save for retirement, the Saver's Credit has been overly complex and underutilized, and neglects other long-term savings needs to help low-income families move up the income ladder.
Today, I published a paper detailing suggestions on improving these credits in particular -- by delivering the AOTC earlier into 529 college savings plans and by better targeting of the Saver's Credit and allowing college savings vehicles like 529s to be eligible products for the credit.
You can read the paper here.