Harvard professor Bridget Terry Long "has completed several studies recently that look at government programs intended to help students attend college [...]. "She found that, unlike earlier federal initiatives such as the need-based Pell Grant, these newer programs, initiated in the 1990s, are [...] benefiting students who are already college-bound. [...] "Long found that the 1997 federal tax credits for higher education - the largest public financial package in 40 years - were uniquely unsuited to benefit families with low incomes and, thus, low tax liability. Almost no one with an income below $30,000 qualifies for the nonrefundable credits, she says. [...] 'I find no evidence of an enrollment effect' from the tax credits, she says, a further indication that they're going to students who would have gone to college anyway". -- http://www.news.harvard.edu/gazette/2003/09.25/13-terrylong.html
Uh, can someone correct me if I'm wrong here? According to my calculations, the reason the families in question might not qualify for federal tax credits is that they have no federal tax liability. Take, for example, a family of four; husband, wife, two kids (one under 17 and another, 17 or older, who might be college-bound) with a combined AGI of $30k. After the standard deduction, exemptions, child tax credit, and EIC, their federal tax liability is ZERO. What would any (additional) federal tax credit be applied against?
