Incentives for Post-Secondary Education

The act creates a refundable state income tax credit (incentive) to encourage enrollment in institutions of higher education. For income tax years commencing on or after January 1, 2025, but prior to January 1, 2033, the incentive is available to an eligible student who has matriculated at any public Colorado institution of higher education, including an area technical college, Colorado mountain college, or AIMS community college (institution), in the amount equal to the amount paid by or for the benefit of the eligible student in tuition and fees minus any scholarships or grants with respect to the qualifying semesters, during which up to the first 65 academic credit hours or equivalent are accumulated at an institution, excluding credits earned through concurrent enrollment, advanced placement, the international baccalaureate program, military credits, and any other credits accumulated prior to matriculation at an institution. To qualify, an eligible student must:

• Matriculate at the institution within 2 years of completion of high school graduation or an equivalent in Colorado;
• Be designated as a degree or credential seeking student for the semester or term for which an incentive is claimed;
• Qualify for in-state tuition for the semester or term for which the incentive is claimed;
• Complete a free application for federal student aid (FAFSA) or Colorado application for state financial aid (CASFA) for the semester or term for which an incentive is claimed that indicates the student's household has an adjusted gross income that is $90,000 or less; and
• Earn at least 6 credit hours or equivalent with a grade point average of 2.5 or higher for the semester or term for which the incentive is claimed.

The act requires an institution, by January 15, 2026, and every January 15 thereafter through 2033, to electronically report each eligible student for any qualifying semester or term completed during the academic year completed during the prior calendar year in a format prescribed by the department of higher education (department) with the student's tax identification number or social security number and the amount of tuition and fees paid minus any scholarship or grants for that prior calendar year. The act requires an institution to provide each eligible student with a statement containing the student's eligibility and incentive amount. The department is required to electronically report the information received from the institutions, with any corrections and additions, to the department of revenue to allow administration of the incentive.

The department, in consultation with institutions, is required to determine each institution's average percentage of state and institutional financial aid allocated to the resident student population who have a family income of $90,000 or less in each year of the 3 years prior to 2025, and each Colorado public institution of higher education is required to maintain a percentage of state and institutional financial aid to resident students who have an adjusted gross household income of $90,000 or less that is equal to or greater than the average percentage calculated. An institution that does not maintain the percentage is required to notify the department and must include in the notification a description of changes to institutional finances or the student population that prevented the institution from maintaining the percentage. On or before June 30, 2027, and each year thereafter until 2037, the department is required to submit a report to the joint budget committee and the house of representatives and senate education committees, that includes among other data, for each institution, the average percentage of state and institutional financial aid allocated to the resident student population who have a family income of $90,000 or less in the academic years 2021-2022 through 2033-34.

For the 2024-25 state fiscal year, $101,756 is appropriated from the general fund to the department of higher education for use by the Colorado commission on higher education and higher education special purpose programs to implement the act.

APPROVED by Governor May 30, 2024

EFFECTIVE August 7, 2024
(Note: This summary applies to this bill as enacted.)