Obama Plan Could Ease Child, Elder Costs
College tuition: The taskforce proposes a cap on payments to federal student loans at 10% of a borrower's discretionary income. The monthly payment for a single borrower earning $30,000 who owes $20,000 in loans would be $115 a month, compared to $228 a month under the standard 10-year repayment plan. The administration would also make a push to forgive all remaining debt after 10 years of payments for those in public service work and 20 years for all others.
Child care: The task force calls for a near doubling of the Child Care Tax Credit for families making less than $85,000 a year.
Two-thirds of families with children are headed by two working parents or a single working parent. Child care costs have grown twice as fast as the median income of families with children since 2000. Full-time care for an infant often costs more than $10,000, and monthly child care fees for two children at any age are higher than the median cost of rent, according to the taskforce. The Child and Dependent Care Tax Credit, however, has only increased once in 28 years and is not indexed for inflation.
The taskforce seeks to increase the credit rate from 20% to 35% of child care expenses for eligible families, allowing them to claim up to $3,000 in expenses for one child or $6,000 for two children. The maximum credit for a family with two children making $80,000 a year would increase by $900 from $1,200 to $2,100.
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