State Rep. Tim Derickson (R-Hanover Twp.) today announced that House Bill 167, a bipartisan bill that makes obtaining a college degree more affordable to students throughout the state, has passed from the Ohio House of Representatives.

Currently, students who qualify for a Pell grant (federally funded-needs based) or an Ohio College Opportunity Grant (state funded-needs based) are able to pay for many of their education-related expenses from these federal and/or state grant funds. Furthermore, these expenses are not subject to federal or state taxes. For example, tuition, fees, and books are allowable expenses and are exempt from federal and state income taxes.

However, the portion of these grants used for the purposes of room, board, and meal plans offered through the college are subject to federal and state income taxes. For students living away from home, the expenses associated with room, board, and meal plans are just as real and relative to obtaining a college degree as the cost of tuition itself.

H.B. 167 broadens the “tax exempt” status of allowable expenses to include room, board and meal plans offered through the college.

“Encouraging high school students to pursue a college degree has been and continues to be a goal of this state,” said Derickson. “This legislation reflects our state’s desire and goal to encourage Ohioans to continue their education in a post-secondary program. All of this can be done with minimum impact to the State of Ohio’s budget.”

Data from the U.S. Department of Education indicates that Ohio’s four-year institutions were awarded $511.4 million in Pell Grant monies for the 2009-2010 academic years. The average award for a four-year institution, both public and private, was $3,714. This was offered to 99,663 students from the state.

House Bill 167 passed with unanimous, bipartisan support from the House and will now move to the Ohio Senate for further consideration.


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