Stimulus tax break to ease college costs

[Soylent Brice]

Stimulus tax break to ease college costs

Friday, February 20, 2009, 11:38am EST | Modified: Friday, February 20, 2009, 11:50am

Families with college students could benefit from a new tax break passed with the federal economic stimulus package signed this week by President Barack Obama.

The massive funding measure includes a provision to more than double the current college tuition tax break to $2,500 per student per year.

Officials are hoping the tax break provision will help alleviate the costs of sending students through higher education, as well as some of the debt students face after graduation.

Nationwide, private, four-year college tuition rose 6.3 percent last year while public four-year school tuition rose 6.6 percent, according to figures from the College Board. In Ohio, about 67 percent of students graduating faced an average debt of about $22,000, ranking the state No. 14 nationally for the amount of debt, according to the Institute for College Access and Success.

The new tax credit:

• Can be used for more than one student in the household;

• Is partially refundable, meaning that families with incomes too low to owe federal income taxes can still claim a partial benefit;

• Has income limits that are slightly higher than current law, reaching zero at $90,000 for singles (up from $80,000 previously) and $180,000 for married couples (up from $160,000 previously).

http://dayton.bizjournals.com/dayton/stories/2009/02/16/daily65.html?ana=e_du_pap