Federal Stimulus Package

Inquiries about student financial aid regarding the American Reinvestment and Recovery Act of 2009 (Federal Stimulus Package) should be directed to the institution of choice or to the student financial aid officer at the institution of choice. All requirements for eligibility for the federal work-study program remain the same.

American Opportunity Credit

Under the American Recovery and Reinvestment Act (ARRA), more parents and students will qualify over the next two years for a tax credit, the American Opportunity Credit, to pay for college expenses.

The new credit modifies the existing Hope Credit for tax years 2009 and 2010, making the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax.

It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years instead of two. Many of those eligible will qualify for the maximum annual credit of $2,500 per student, an increase of $700 over the Hope Credit's maximum.

If the amount of the American Opportunity Tax Credit for which you're eligible is more than your tax liability, the excess credit is refundable to you, up to a maximum of 40 percent ($1,000) of the amount of the credit for which you’re eligible.

The full credit is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above these levels. These income limits are higher than under the existing Hope and Lifetime Learning Credits.

Also new: Qualified, nontaxable distributions from a Section 529 plan during 2009 or 2010 can now be used to pay the cost of any computer technology or equipment or Internet access and related services, if such technology, equipment or services are to be used by the beneficiary of the plan and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution.

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