This afternoon, President Obama will hold a Rose Garden news conference where he will call on Congress to extend a tax break for college students that was included in last year’s economic stimulus package. The President’s rationale is that the tax break provides assistance to middle-class families struggling with rising college tuition costs.
Orange County tax attorneys point out that the tax cut is known as the American Opportunity Tax Credit. This credit provides as much as $2,500 a year in benefits to the families of students pursuing a college education. The Department of the Treasury says the tax credit has significantly expanded aid to the 12.5 million students who took advantage of the program last year. The average annual benefit was $1,736 – a seventy-five percent increase over previous programs like the Hope Credit or the Lifetime Learning Credit.
It would cost an estimated $58 billion to extend the credit over the next decade, which is why some members of Congress are reluctant to discuss the credit, scheduled to expire in January.
Since having a college degree is a critical steppingstone to financial success, the White House has said they are hopeful that the credit could become part of the legislative discussion when Congress reconvenes after the Nov. 2 elections.
Gene Sperling, special counselor to Treasury Secretary Timothy F. Geithner, said, “What the President wants to express is the importance of continuing this tax cut and sending that important signal of support for families seeking to send their children to four years of college. Our hope is to get this extended in a way that’s practical and timely, but we’re not going to try to prejudge the congressional strategy for doing so.”
Source: Washington Post “Obama to push for extending tax break that benefits college students” 10/13/2010