Tax Cut Deal Benefits College Students

Congress has acted and the president has signed legislation extending tax cuts dating back to the Bush presidency. Tucked in with that bill is the American Opportunity Tax Credit, an initiative that provides significant tax credits for students and their families.

Tax Credits for Students

Pennsylvania Congressman Chaka Fattah (D) spearheaded an effort to see to it that eligible college students receive $2,500 in higher education tax credits. That credit covers tuition, fees, books and related expenses for low and middle income students and their families and is part of the broader Middle Class Tax Relief Act of 2010.

Commenting on the passage of the bill, Rep. Fattah said, “The American Opportunity Tax Credit has helped put college education within the reach of millions of students who would otherwise face significant financial hardship. I am pleased that the strides we have made toward increasing college affordability will continue.”

Rep. Fattah was behind the original AOTC, part of the American Recovery and Reinvestment Act of 2009, which will expire on December 31, 2010. The representative introduced legislation in October 2010 which made the AOTC permanent.

Millions Helped

To date, more than 12.5 million students and their families have received a tax credit for their college expenses, including 4.5 million low-income students. Initially known as the Hope Scholarship Tax Credit, the AOTC increases the original tax credit from $1,800 to $2,500, expanding it to help more families.

Source: Office of Congressman Chaka Fattah