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Celebrating service, education & tax breaks on MLK Day

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The birth of the Rev. Dr. Martin Luther King, Jr. has been officially celebrated as a federal holiday on the third Monday of January for more than three decades.

For 25 of those years, it's also been a Day of Service, during which we're all challenged to transform the King Holiday into a day of citizen action volunteer service in honor of the slain civil rights leader.

There are various ways to honor Dr. King on his holiday. One recommended by the Corporation for National and Community Service is to volunteer on #MLKDay and beyond as a tutor or mentor with an after-school program

Dr. King would approve.

Importance of education: As child he attended segregated public schools in Atlanta. At just age 15, he entered Atlanta's Morehouse College and later attended Crozer Theological Seminary in Chester, Pennsylvania, and Boston University, where he earned his Ph.D.

His school experiences helped shape his view of the importance of education in advancing the condition of minorities and in eliminating long-standing societal prejudices.

Those views were evident when a teenage King wrote a column for the Maroon Tiger, Morehouse' campus newspaper on "The Purpose of Education."

Among the points the future social activist made is the value of education in allowing us "to sift and weigh evidence, to discern the true from the false, the real from the unreal, and the facts from the fiction."

He also argued that a broad education has a moral component.

His full column, from The Martin Luther King, Jr. Research and Education Institute at Stanford University, is below:

As I engage in the so-called "bull sessions" around and about the school, I too often find that most college men have a misconception of the purpose of education. Most of the "brethren" think that education should equip them with the proper instruments of exploitation so that they can forever trample over the masses. Still others think that education should furnish them with noble ends rather than means to an end.

It seems to me that education has a two-fold function to perform in the life of man and in society: the one is utility and the other is culture. Education must enable a man to become more efficient, to achieve with increasing facility the legitimate goals of his life.

Education must also train one for quick, resolute and effective thinking. To think incisively and to think for one’s self is very difficult. We are prone to let our mental life become invaded by legions of half-truths, prejudices, and propaganda. At this point, I often wonder whether or not education is fulfilling its purpose. A great majority of the so-called educated people do not think logically and scientifically. Even the press, the classroom, the platform, and the pulpit in many instances do not give us objective and unbiased truths. To save man from the morass of propaganda, in my opinion, is one of the chief aims of education. Education must enable one to sift and weigh evidence, to discern the true from the false, the real from the unreal, and the facts from the fiction.

The function of education, therefore, is to teach one to think intensively and to think critically. But education which stops with efficiency may prove the greatest menace to society. The most dangerous criminal may be the man gifted with reason, but with no morals.

The late [former Georgia governor] Eugene Talmadge, in my opinion, possessed one of the better minds of Georgia, or even America. Moreover, he wore the Phi Beta Kappa key. By all measuring rods, Mr. Talmadge could think critically and intensively; yet he contends that I am an inferior being. Are those the types of men we call educated?

We must remember that intelligence is not enough. Intelligence plus character — that is the goal of true education. The complete education gives one not only power of concentration, but worthy objectives upon which to concentrate. The broad education will, therefore, transmit to one not only the accumulated knowledge of the race but also the accumulated experience of social living.

If we are not careful, our colleges will produce a group of close-minded, unscientific, illogical propagandists, consumed with immoral acts. Be careful, "brethren!" Be careful, teachers!

While Dr. King was addressing challenges he personally was facing in the 1940s, his observations and conclusions are still relevant as America continues to confront significant societal, cultural and technological change.

More educational opportunities: Since Dr. King's days at university, the educational outlook for African Americans has followed an upward trajectory, as evidenced in the U.S. Census Bureau graphic below.

Black-education-data_US-Census

Much of those gains can be attributed to the work of Dr. King and others to ensure that educational doors are wide open to all students.

New tax relief for student debtors: College costs, however, are threatening the educational goals of many students and their families.

Millions have gone into serious debt to attend college. Outstanding student loans in the U.S. now total more than $1.6 trillion, an amount that's more than doubled in the past decade and tripled since 2006. And 51 percent of students who took out loans from 2010-2012 haven't made any progress in paying them off.

Some owing students, however, got some good news last week when

The Internal Revenue Service issued a ruling last week that expands the pool of people who will not have to pay taxes on the balance of their forgiven loans.

Usually when a lender agrees to no longer demand repayment of loan, that forgiven amount is considered taxable income. So while it's nice to no longer have to come up with, say, $50,000 due on a loan, the relieved former debtor would owe income tax on that amount.

That tax law often is a surprise that creates its own often devastating financial complications at tax time.

Now, however, the IRS says it will provide "appropriate" relief to borrowers by waiving taxes on both federal and private loans that are forgiven because their schools misled them or closed abruptly.

Congress steps in to help on loan relief: The IRS decision applies the tax exemption that earlier was granted to borrowers at Corinthian Colleges and the American Career Institute (ACI). Students at these two failed for-profit schools were left with incomplete degrees and credits that were hard to transfer and, before the IRS stepped in, tax bills on loans for classes that were no longer available.

In the Corinthian, ACI and subsequent similar situations, the Education Department allows borrowers to eliminate their federal loan amounts through the Department's Closed School Discharge program.

The IRS' decision now covers borrowers who have their loans eliminated through a program known as Borrower Defense to Repayment, which allows loans to be forgiven when schools act fraudulently, such as through deceptive recruiting practices.

Education Secretary Betsy DeVos has tried to end that program, but is facing not only a deluge of lawsuits, but also Congress. Also last week, The House voted 231-180 to overturn DeVos' regulations.

Tax help in paying for school: Meanwhile, in addition to loans, student also should check out the tax breaks that could help cover some school costs, both for K-12 classes and college.

And don't forget to check out scholarships. There's more good news here.

Unintended consequence of the Tax Cuts and Jobs Act (TCJA) changes to the kiddie tax — that's investment earnings by young people — also affected scholarships. The tax reform law enacted in late 2017 made scholarship money subject to new kiddie tax compressed tax brackets, resulting in higher tax rates for those who had received this help to attend university.

However, the federal funding bill signed on Dec. 20, 2019, included changes to the kiddie tax. Basically, the pre-TCJA kiddie tax rules are back.

The change is effective not on for 2020 and going forward, but taxpayers who were hit with a higher kiddie tax bill for the 2018 and 2019 tax years can choose to use the old-now-new-again kiddie tax rules for those tax years.

That's a great lesson for anyone looking for help in paying for college.

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