In addition to help people who are unemployed, the Obama stimulus package also gives debt relief for students. While the student loan limits will not change and therefore may prevent students from going to college, there are some positives in the stimulus plan. Here are the details:
$2,500 in Scholarship Tax Credit
You can claim up to $2,000 as a tax credit from qualified tuition and related expenses. This results in a total tax credit of $2,500 which can be claimed during your first 4 years in college. Before, it was only first 2 years. If you owe only very little in taxes, you can receive a tax refund for up to 40% of the credit.
Items You Can Claim as Tax Credit
Tuition and fees & now course materials for tuition and fees are the things that you can claim as tax credit.
Who is Eligible?
If you are single – phased out if your adjusted gross income (AGI) is greater than $80,000
If you are married – phased out if your adjusted gross income (AGI) is greater than $160,000
Increased Pell Grant Funding
Funding for Pell Grants has been increased to $5,350 in 2009-10 and $5,550 in 2010/11 from $4,731. These Federal Government grants are specifically designed for the lowest income students and do not need to be repaid.
The 529 Savings Plans
If you don’t already know, a 529 savings plan is a tax-free college savings account sponsored by a particular state or group of states and is only allowed to be used for college expenses. This savings plans have now more options where you can use it to buy computers and other technology related items for your college education.
Federal Stafford & Perkins Loan Limited
The request to increase the loan limits for student loans was not included in the final bill. As student loan lenders continue to reduce their private student loan programs, it is now difficult for students to obtain credit for college.
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4 Responses
I am a working mother, who took out student loans to get off public welfare and earn a degree. I been working in the human servivces field and not able to pay back my loans. How can you help me.
Posted on August 25th, 2009 at 4:43 pm
With the costs of college rising further and further, these extra options for financial aid are definitely a reflief. If you didn’t know, I believe the 529 plan also has more flexibility now than it did previously. What we really need is more in the form of grants and low-interest student loans.
Posted on December 16th, 2009 at 6:57 pm
I went back to school to earn a degree in Business Management and a Master’s in Business Adm. Do to my disability I cannot fine a job. I thank the education system for allowing me to struggle at the ge of 50 to do this. My delima now is how am i going to pay this back. I have no job, that could accomadate me. I tried to submit forms to the departmentof education to see if this loan ca be forgiven. I cannnot fine what I am looking for whild searching for this informatin. Please advixe me on what to do
Posted on April 1st, 2010 at 5:04 pm
@Maria, there is currently a new program that can help you cap your monthly payment to 15 percent of your income. This repayment program will give you a relief as your monthly payment will be more affordable. If you are working in public services field, your loan will be forgiven after 25 years. Please refer to this post http://www.myloansconsolidated.com/2009/07/30/student-loans-repayment-relief/
@Patricia You can either try and get your student loans discharge… here is how http://www.ehow.com/how_4768294_student-loans-disability-discharged-forgiven.html or you can try and get a government grant which you do not have to repay ever. But make sure that if you get the grant, you really use it to repay your student loan. Here is more about government grant http://www.myloansconsolidated.com/2008/12/19/applying-for-student-government-grant/ or directly go to the government website http://www.grants.gov/applicants/find_grant_opportunities.jsp
Posted on April 1st, 2010 at 8:48 pm
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