• Individuals that want to apply for the tax credit must be an eligible citizen or legal resident of the United States
• The program is available to eligible students through 2010
• Students must be enrolled in an accredited and approved university or college which includes those that are eligible to participate in Title IV Federal Student Aid
• Students must be enrolled in a program leading to an undergraduate degree or other approved education credential
• Students must be enrolled full time in order to receive the $2,500 but it phases out for part-time students
• However, if students or their families do not earn enough to pay income taxes then they can receive a $1,000 refund
• Students who use other federal aid may not be eligible for the Tax Credit
• Students are allowed to apply for all four years of undergraduate education
• Single tax filers must earn less than $80,000 on their modified adjusted gross income needs to be eligible to claim the credit. Joint tax filers must have a modified adjusted gross income less than $160,000 per year. If incomes are above the preceding amounts then students may be eligible for partial tuition tax credits but they phase out with income level
• The costs of tuition also include qualifying expenses like required course materials
• 40% of the credit is refundable
• If parents want to claim the credit it must be for their dependent child’s college expenses and listed as that way the other person’s tax form
• File your tax form and see a qualified tax accountant

Amount

The American Opportunity Tax Credit is the way to claim your stimulus cash. The maximum tuition tax credit is $2,500 which is 100 percent reimbursement for the first $2,000 spent on higher education and 25 percent of the next $2,000 spent on educational expenses. So this tax credit makes college more affordable by reducing the amount of money individuals pay in taxes.

A major part of the bill is a $13.8 billion tuition tax credit boost called the American Opportunity Tax Credit. This tax credit reimburses 100 percent of the first $2,000 of educational expenses for lower income students. For the next $2,000, students will receive a 25 percent reimbursement. In short, lower income students will receive $2,500 in education reimbursements per year.

The bill also features other benefits for low-income students. Families that do not earn enough to pay income taxes can receive a $1,000 education refund.

“These kinds of incentives from the government don’t come along very often,” says Janet Hill, financial aid and education counselor at ClassesandCareers.com, a free online education service. “If people have been thinking of going back to school, now would be the time to do it. If they are hurting financially, they can easily get the money they need to get a degree.” These benefits are set to expire after the 2010-2011 school year.

Fortunately, thanks to a growing number of online education options, degree-seekers can take advantage of President Barack Obama’s stimulus bill without leaving their jobs. Sites like Classes and Careers.com have helped nearly 500,000 degree-seekers get their stimulus money and enroll in online universities.

“We help people learn how to take advantage of this bill,” says Hill. “All they have to do is visit our form and fill it out. We guide them through the rest.”

Have you been putting off a college education because of lack of money? Now is the time to get the money you need. Visit ClassesandCareers.com and fill out their form. An education advisor will help you get your share of the stimulus money and find the best degree program for you.

Arne Duncan, Education Secretary announced the changes last Wednesday.  They are trying new avenues, in order to boost college enrollment among low and middle income students.  Duncan said "We need to educate our way to a better economy."  The new form will make the process easier for students and families applying for federal financial aid.

Due to the economic downturn, many students and their families are seeking financial aid.  After the recession the number of applications increased 12 percent to more than 16 million.  In 2007, 58 percent of college undergraduates applied for aid, and 47 percent received it.

Due to the high demand and the fact President Obama wants more people applying; the administration is trying to shorten the online Free Application for Federal Student Aid (FAFSA).  There will be two-thirds fewer screens to fill out.  There will also be a Web application where families can access their tax data already sent to the IRS. 

This tax information will help families answer the questions on the form.  Paperwork shouldn't stand between students and a college degree.  The administration has a goal set and that is to increase the Pell Grants for low-income students by 75 percent over the next ten years.

There is money out there for education and it just got easier.  Because of the stimulus, over $17 billion has been designated for Pell Grants.  The Federal Perkins Loan Program will also increase to $6 billion in loans every year over the next decade.  There has never been a better time to get an education so sign up today and improve your life.