A bipartisan trio of lawmakers have introduced a bill that would update the existing tax law to allow formerly homeless young people to pursue a four-year college education and still qualify for housing built with Low Income Housing Tax Credits.

Jim McDermott

Homeless youth currently cannot do both under existing tax law and must make the difficult decision to pursue an education or remain homeless. Congressman Jim McDermott, D-Wash., Erik Paulsen, R-Minn., and Keith Ellison, D-Minn., introduced the legislation on Tuesday to amend the tax laws.

“Education remains the best hope for homeless youth to escape poverty as adults,” said McDermott, a senior member of the House Ways and Means Committee. “Today, our homeless youth must choose between being homeless or pursuing a full-time education. That is wrong, and this simple fix would have a significant impact in ensuring these youth can reach their educational goals.”

The bill would change the “student rule” in the LIHTC program, which currently prohibits low-income tenants from being full-time students. The original intent of this “student rule” was to prohibit LIHTC funds from being used to construct dormitories and prevent college students with temporarily low incomes from benefiting from resources meant for individuals and families with even more serious housing needs.

“Young people grappling with homelessness shouldn’t have to choose between going to school full-time and having a roof over their head,” said Ellison, who co-chairs the Congressional Progressive Caucus. “Affordable housing units built using Low Income Housing Tax Credits should be available to full-time students who were homeless before they moved to the tax credit unit. This bill is a common-sense fix to the Low Income Housing Tax Credit program and I urge my colleagues to pass it into law as soon as possible.”

A number of individuals are currently exempt from the “student rule,” including former foster youth, single parents, and parents receiving public assistance. The bill would add homeless youth to this exemption, allowing these individuals to pursue a full-time education while living in low-income housing.

The Joint Committee on Taxation estimates the bill would cost less than $1 million over 10 years. Despite the negligible cost, the bill would have significant impacts in the lives of homeless youth, according to the lawmakers.