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Congressman Jason Smith

Representing the 8th District of Missouri

Congressman Jason Smith Leads Bipartisan Bill to Promote College Affordability

Jul 30, 2015
Press Release
Bill would allow students to earn tax-free scholarships at Work Colleges, graduating with little to no student loan debt

WASHINGTON – Congressman Jason Smith introduced a bill to help make college more affordable for students on Wednesday. The bipartisan bill, H.R. 3409, would allow students to earn tax-free, work-based scholarships at Work Colleges across the country.

At a time when students graduating college average $35,000 in student loan debt, work colleges offer an alternative by allowing students to achieve a four-year degree with little to no student loan debt in exchange for participation in a work-learning program. Work Colleges differ from federal work-study programs, offering scholarships through work regardless of need.

“It only makes sense that we encourage the hard work of responsible students,” said Congressman Jason Smith, a member of the House Ways and Means Committee which handles tax issues. “Work Colleges, including College of the Ozarks in southern Missouri, start students on the right track. This bill makes it easier for those students to earn the scholarships they need to pay for college.”

Currently, compensation students earn at Work Colleges is taxed as income, rather than a tax-free scholarship. Congressman Smith’s bill would clarify the tax treatment of these scholarships and restore the specific tax protection that was erroneously eliminated by Congress in 1986.

America’s seven Work Colleges are unique, four-year liberal arts institutions. In addition to graduating with little or no student loan debt, Work College students finish school with four years of work experience. Typical entry level jobs in the program include landscaping and administration, and students typically work about eight to 15 hours per week in addition to their education and service requirements.

“At the work colleges, all students are required to work,” said Jerry C. Davis, President of College of the Ozarks, a Work College in Point Lookout, Missouri.  “This is a part of their educational program and is, in essence, a scholarship.  Students earn while they learn.  Work colleges encourage students to serve others while learning valuable lessons.”

The seven American Work Colleges are Alice Lloyd College in Pippa Passes, Kentucky; Berea College in Berea, Kentucky; Blackburn College in Carlinville, Illinois; College of the Ozarks in Point Lookout, Missouri; Ecclesia College in Springdale, Arkansas; Sterling College in Craftsbury Common, Vermont; and Warren Wilson College in Asheville, North Carolina.