Class of 2023: How Permanent Expansion of the CTC Boosts Educational Achievement

Nandini Singh

As summer winds down, kids and their families are getting ready for back-to-school season. That means saying goodbye to the last vestiges of summer – the burst of fireworks, sour scent of chlorine, and bustle of barbecues– and saying hello to fresh pencils, untouched notebooks, new peers, newer classes, and a school year full of lessons and growth.

However, for low-income households, this season may present itself as a challenge. As stated in Forbes, “Since raising a child costs roughly $14,846 per year, while the annual salary of a full-time minimum-wage worker receiving the federal minimum wage ($7.25) is only $15,080, it’s nearly impossible for low-income families to stretch their budgets even further to include books, let alone child care.” Families need easy access to resources and tools needed to set their children up for academic success.

Raising awareness of the Child Tax Credit (CTC) and permanently expanding it would give low-income families greater opportunity to invest in their children’s education this school year and beyond.

According to the Center for Budget and Policy Priorities (CBPP), “Prior to [the] enactment of the American Rescue Plan in March [2021], 27 million children received less than the full Child Tax Credit or no credit at all because their families’ incomes were too low…” When more low-income households received the  Child Tax Credit in 2021 thanks to the American Rescue Plan, the maximum credit amount increased to $3,000 per qualifying child between ages 6 and 17 and $3,600 per qualifying child under age 6.

This expansion helped cut child poverty roughly in half that year, according to the Institute on Taxation and Economic Policy (ITEP). The temporary expansion was so successful that Democrats in the House have recently introduced a proposal to make the changes permanent. If the proposed plan were to come into effect next year, it would benefit nearly 60 million children across the nation.

But let’s dig further into the ‘how’: how, exactly, would expanding the CTC impact academic outcomes for low-income students and households?

According to CBPP, “40 percent of families with low incomes used their Child Tax Credit payments to cover education costs such as school books and supplies, tuition, after-school programs, and transportation to and from school.”

This use of funds supports students and families in two ways:

  1. More parents would have time to support their children’s academic journey. As reported by The Century Foundation, “Economically disadvantaged parents are more likely to have less time to invest in their children because they are struggling with the challenges that come with higher rates of single parenthood, nonstandard work hours, and less flexible work schedules.”

    If parents have the funds to meet basic needs and support aspects of their child’s education, they don’t have to take on additional work to make ends meet, which can make it easier for them to balance competing needs of work and family. And, according to a study published by Purdue University, “children of involved parents have better attendance records, drop out less often, have higher aspirations, and more positive attitudes toward school and homework.”

  2. More families could afford educational experiences that lead to a path of higher education. As illustrated by CBPP, not only is the CTC used to help families purchase tangible goods needed to support their children’s learning, but it also helps them invest in experiences that could fundamentally transform their children’s education at large. Let’s take after-school programs as an example. If a family can invest in these programs, especially if their child is struggling, that student now has resources to stay on par with the rest of their class. Conversely, if a child is learning beyond their grade-level, having access to after-school programs or tuition costs grants them opportunities to be more intellectually stimulated, enabling them to skip a grade or attend a school that meets their needs effectively.

    Additionally, according to the Brookings Institution, “students in households with income greater than $200,000 outscore students whose household income is less than $20,000 by almost 300 points on the SAT.” But, a study out of Washington University in St. Louis confirmed that households that had $50,000 or less in income were four times more likely than households that had $100,000 or more to report using the CTC to spend more on tutors for their children (12 percent vs. 3 percent).” Permanent expansion of the CTC would make resources like college prep courses, tutors, and books more affordable for children of low-income families, effectively giving them opportunities to attend college, opening doors to any number of career opportunities in the future.

Permanent expansion of the CTC is just one of many important steps we must take to afford students from low-income households the opportunities, options, and autonomy to shape their future in whatever way they see fit.