President Obama Calls for Extension of Tax Credit for College Students
President Obama Calls
for Extension of Tax Credit for College Students
President Barack Obama is pressuring Congress to extend the American Opportunity Tax Credit, which helped more than 12 million students pay for their college tuition last year. The credit is scheduled to expire at year's end.
Several of Obama's top advisers spoke to reporters Tuesday about why they believe the credit should be kept around.
"(The President) believes that it is important for this to be extended and for families to have the certainty and confidence that this (credit) will be there when they are making the choices about sending their children to college," remarked Gene Sperling, a counselor to the Treasury Secretary.
The tax break was first introduced as part of the government's 2009 Recovery Act and students were able to apply it to tuition payments for either 2009 or 2010. It essentially expanded the existing Hope Credit to include dependents of more lower and higher income Americans.
In contrast to the Hope Credit, the AOTC is partially refundable and can be used to cover more epenses associated with sending a child to college, like textbooks or computers. It is also available for all four years of a Bachelors-level education, whereas the Hope Credit could only be applied to the first two years of college.
There is also more available money under the AOTC. Where the Hope Credit allowed for a maximum of $1,800 per year in tax credits, the AOTC allows for as much as $2,500 per year. Last year, according to a Treasury Dept. analysis, students received an average credit of over $1,700, 75 percent above the average amount received under the Hope Credit.
President Barack Obama is pressuring Congress to extend the American Opportunity Tax Credit, which helped more than 12 million students pay for their college tuition last year. The credit is scheduled to expire at year's end.
Several of Obama's top advisers spoke to reporters Tuesday about why they believe the credit should be kept around.
"(The President) believes that it is important for this to be extended and for families to have the certainty and confidence that this (credit) will be there when they are making the choices about sending their children to college," remarked Gene Sperling, a counselor to the Treasury Secretary.
The tax break was first introduced as part of the government's 2009 Recovery Act and students were able to apply it to tuition payments for either 2009 or 2010. It essentially expanded the existing Hope Credit to include dependents of more lower and higher income Americans.
In contrast to the Hope Credit, the AOTC is partially refundable and can be used to cover more epenses associated with sending a child to college, like textbooks or computers. It is also available for all four years of a Bachelors-level education, whereas the Hope Credit could only be applied to the first two years of college.
There is also more available money under the AOTC. Where the Hope Credit allowed for a maximum of $1,800 per year in tax credits, the AOTC allows for as much as $2,500 per year. Last year, according to a Treasury Dept. analysis, students received an average credit of over $1,700, 75 percent above the average amount received under the Hope Credit.
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