Income (Qualified education expenses)

"Income (Qualified education expenses)" submitted by SchoolGrantsfor Editorial Team and last updated on Friday 22nd July 2011

Money that an individual earns or receives, typically on a monthly basis. Sources may be salary, gifts, financial aid, etc. The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as profit from financial investments.

In some situations a taxpayer's wealth directly increases through income that is not included in the determination of income tax. For example, gifts and inheritances are excluded from income in order to encourage the Transfer of Assets within families. However, any income realized from a gift or inheritance is considered income to the beneficiary—most notably rents, interest, and dividends. In addition, most scholarships, fellowships, student loans, and other forms of financial aid for education are not included in gross income, perhaps to equalize the status of students whose education is funded by a gift or inheritance and of students who do not have the benefit of such assistance. Cash rebates to consumers from product manufacturers and most state Unemployment Compensation benefits are also not included in gross income.

Qualified education expenses paid by a taxpayer for himself, his spouse or dependent can be used to reduce the amount of tax liability. There are two education credits offered by the IRS, the Hope Credit and Lifetime Learning Credit. Each credit has restrictions on what are considered qualified expenses.

According to the U.S. Department of Education the purpose of Title 1 funding, “is to ensure that all children have a fair, equal, and significant opportunity to obtain a high quality education and reach, at minimum, proficiency on challenging state academic achievement standards and state academic assessments.”

The basic principles of Title 1 state that schools with large concentrations of low-income students will receive supplemental funds to assist in meeting student’s educational goals. Low-income students are determined by the number of students enrolled in the free and reduced lunch program. For an entire school to qualify for Title 1 funds, at least 40% of students must enroll in the free and reduced lunch program.

Educational attainment is one of the most prominent determinants of class status. As educational attainment represents expertise, which is a necessary component of the capitalistic market system, its ownership may be seen as the ownership of one of the factors of production. In other words, those with advanced degrees already own one of the essential buttresses of the economy: expertise. Additionally educational attainment is basis for occupational selection. Those with higher educational attainment tend to be positioned in occupations with greater autonomy, influence over the organizational process, and better financial compensation. While economic compensation is merely the result of scarcity, educational attainment may be related to that very economic principle as well. The attainment of a graduate degree represents the acquisition of expertise, a factor of production, that in itself may be scarce; thus leading to better financial compensation for the owner. As stated above, the upper middle class features a strong reliance on educational attainment (the ownership of expertise) for much of its social and economic well-being.

Income percentile
Income percentile indicates income percentiles for all students. It is equal to the proportion of the sample who has an income lower than recorded for the student. It uses parents’ income if the student is dependent. If the student is independent, his or her income is used.
1st-25th percentile
26th -50th percentile
51st -75th percentile
76th -100th percentile

Income and dependency level
This is the income level and dependency status of the student. Parents’ or guardians’ income is the income source for dependent students; the source of independent students' income combines their own earnings and those of their spouse, if married.

Dependent student:
Less than $20,000 Income of less than $20,000 in 1995.
$20,000 to $29,999 Income between $20,000 and $29,999 in 1995.
$30,000 to $39,999 Income between $30,000 and $39,999 in 1995.
$40,000 to $49,999 Income between $40,000 and $49,999 in 1995.
$50,000 to $59,999 Income between $50,000 and $59,999 in 1995.
$60,000 to $69,999 Income between $60,000 and $69,999 in 1995.
$70,000 or more Income of $70,000 or higher in 1995.

Independent student:
Less than $10,000 Income of less than $10,000 in 1995.
$10,000 to $19,999 Income between $10,000 and $19,999 in 1995.
$20,000 to $29,999 Income between $20,000 and $29,999 in 1995.
$30,000 or more Income of $30,000 or higher in 1995.