Federal government extends $2,500 tax credit

The federal government will continue to help families ease the sting of tuition cost  — at… The federal government will continue to help families ease the sting of tuition cost  — at least for another two years.

The American Opportunity Tax Credit, a $2,500 tax credit for most working families, will extend until 2012 as a result of a deal reached between President Barack Obama and Republican leaders on the Bush era tax cuts, according to the White House blog.

None of the tenets of the program will change, according to White House spokesman Shin Inouye.

Elaine Maag, a research associate with the nonpartisan Tax Policy Center, said the tax credit will continue unchanged for students already in college, and new families will be able to apply next year.

Neither Inouye nor the White House blog mentioned whether the extension of the cuts was part of the White House’s larger plans to reform higher education.

Although students who had heard about the program — and many hadn’t — applauded it, some thought it wasn’t necessarily enough.

“It seems like a good idea,” said Emily Cohen, a junior Studio Arts and Psychology major. “But I don’t know if giving tax credits is the best way to go about that. There are scholarships and financial aid that they can use.”

She also said that she wasn’t sure that the parents of students who pay their own way through college should get the tax credit.

John Coyle, a sophomore Nursing major, said that the government should take into account previous children as well.

Coyle is the fourth child, and though the previous three have gone through college, he’s now his parents’ only dependent.

“I seem like an only child to them,” he said.

Coyle didn’t have a suggestion to improve the tax credit, or higher education in general, though.

“I really don’t know what I would recommend,” he said.

The tax credit came about as part of the American Recovery and Reinvestment Act of 2009. It was originally meant to last until the end of 2010. The Obama administration has been pushing for an extension for the last few months.

Maag said that the tax credit goes in full to individuals making up to $80,000 in adjusted income a year, or up to $160,000 for a married couple.

She said that the tax credit is not a factor in financial aid decisions, and each qualifying student in a family will receive the credit.