Young Invincibles released a report, “Economy Hammers Already Vulnerable Young Adults”, as Congress debates whether to maintain the American Opportunity Tax Credit (AOTC) and provide funding to avoid a shortfall for the Pell Grant Program.
The report shows how dire the economy is for young Americans while also highlighting the need to protect one of the few mechanisms for creating jobs – higher education. According to the report, a staggering 18 percent of 16 to 24 year-olds are unemployed.
Young men and minorities have been the hardest hit, the report says. Over 51 percent of young black men ages 16 to 19 who are looking for a job cannot find one. If Congress does not act during the 2010 lame-duck session, these supports will be cut, meaning fewer young adults will gain the education and skills they need to succeed in the modern economy.
Workers with college degrees had the lowest rates of unemployment over the past three years – about half the rate of the rest of the population. Yet the level of education and training of America’s current workforce do not match the type of new jobs that will be created over the next decade. According to a recent study from The Georgetown University Center on Education and the Workforce, at current graduation rates, the American economy will still be 3 million postsecondary degrees short over the next decade.
AOTC improved upon the prior educational tax credit (the “Hope and American Opportunity Credits”) by expanding the maximum credit to $2,500, making it 40 percent refundable, and expanding the number of years and income range of those who qualify for the full benefit. About 12.5 million young adults and families received the credit last year, but this program is set to expire at the end of 2010.
In addition, Pell grants, aid relied upon by low-income students attending college, face a shortfall of $5.7 billion for the 2011-12 academic year. Without additional funding, nearly 9 million students would face a 15 percent cut in their funding level.
“The unemployment rate for our generation is staggering,” says Aaron Smith, Executive Director of Young Invincibles. “One of the most immediate and direct ways that the jobs situation can be addressed is through aggressive support of tax credits and grants that improve educational opportunity,” continues Smith. “However, if Congress does not act now, the cuts to student funding for the 2011-12 will be devastating.”
Young Invincibles, along with other youth advocacy groups, released this letter to Congress, encouraging them to renew the American Opportunity Tax Credit. We also released this fact sheet, detailing the impact of the credit on young Americans and their families.