President Obama announced his proposal for community college to be free for two years for responsible students. “Higher education should not be a Democratic or Republican issue. It’s an American issue,” Obama said. If the plan becomes fully implemented in the future, full-time community college students would save an average of $3,800 per year. Students would be eligible for free tuition if they attend the community college at least half-time, maintain a 2.5 GPA, and make progress toward their degree, according to White House officials. Obama’s proposal could benefit up about 9 million students across the nation, each year. The federal government would cover three-quarters of the average cost of community college and participating states would be expected to contribute the rest. “Students who started at community college during those two years and then go on to a four year institution, they essentially get half of their bachelors degree free,” Obama said, “It can be a game changer.” The White House stated that this plan would cost $60 billion over a span of 10 years. President Obama pitched his plan during his speech at Pellissippi State Community College in Knoxville, Tenn.
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Along with the harsh realities facing today’s college students, there is an opportunity. The American Opportunity Tax Credit was created to help us get through the most expensive part of our lives. President Obama proposed this Tax Credit, which was meant to take the place of the “Hope Credit.” The Hope Credit offered an $1,800 tax credit for each semester to college students living in homes with an annual income below $50,000 per year, or less than $100,000 for married families who file their taxes together. This credit was fairly limited, however, only being available to students in their first two years of undergraduate school, and only covering money spent on tuition and books required by the school. The Hope Credit did give hope to those it helped, but it just wasn’t enough for students facing huge student loan debts.
The American Opportunity Tax Credit was created as an extended version of the Hope credit, going quite a bit further to help struggling students. The American Opportunity Tax Credit raises the maximum credit available to $2,500, for four years of undergraduate school. It was intended to cover the years 2009-2010, which was extended to 2011-2012 with a possibility of an extension beyond 2012 if congress chooses. It was also extended to cover course materials, like lab supplies and required software whereas the Hope credit only covered tuition and books. The American Opportunity Tax Credit goes even further than that, allowing students to receive the maximum tax credit of $2,500 if they live in a household with an income below $80,000, or married, jointly filed households bringing in $160,000 per year.
So the question is: How can I apply for it? You will need to fill out a 8863 form through the IRS website. Those who need additional instructions on filling out this paperwork can get that here. The 8863 form should be sent in along with your 1040 Tax return form. Remember, taxes are due on April 17, 2012. Make sure to have everything in by that date and you should be on your way to getting help with the costs of school.
For further information regarding the American Opportunity Tax Credit, check out President Barack Obama’s website, or the IRS website.
Our designers are at it again. This time they compiled a list of the top ten events of the past 10 years that shaped your lives and our country and threw it all into an awesome infographic for your viewing pleasure. From Harry Potter, to iPods, to Obama, its all there.
Top 10 Events that Shaped the Past 10 Years
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