As the school year begins, many parents and students start to think about saving for college. As part of the American Recovery and Reinvestment Act (ARRA) President Obama signed in May, a number of student tax laws were altered to benefit students more directly. These credits can be a big help.
• For 2009 and 2010, the Hope credit is renamed the American Opportunity tax credit and can be worth $2,500 per student per year, up from $1,800. Also, the income limits for qualifying have been increased; click here to learn
more about these changes.
• ARRA has expanded the definition of "qualified higher education expenses" for 529 plans to include expenses paid or incurred in 2009 or 2010 for computer technology, equipment and Internet access, provided they are used by the 529 plan beneficiary and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution.
• The maximum Pell Grant amount has increased to $5,350 for 2009/2010 and to $5,550 for 2010/2011
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