Today, as hardworking Americans across the country file their taxes or await their return, middle class families and students paying for college loans will find a larger refund coming their way. The American Opportunity Tax Credit alleviates up to $2,500 of federal income tax owed for individuals paying for college loans and making up to $90,000 a year or for couples making up to $180,000.
This is just one of the many ways this Administration is giving back to students. When President Obama signed into law historic healthcare legislation, he not only improved the availability and quality of health care services for thousands of uninsured and under-insured Americans, he made a tremendous investment in our nation’s students. The Health Care and Education Reconciliation Act of 2010 ended wasteful subsidies to banks and freed up nearly $68 billion dollars for college affordability and deficit reduction. Over the next 10 years, the Act will make important investments in higher education, help make college more affordable for hardworking Americans and give back to the American tax payer by:
- Expanding the Pell Grant program by $36 billion.
- Investing $2 billion in community colleges.
- Increasing support for minority servicing institutions by $2.55 billion.
- Investing $750 million to bolster college access for students over the next 5 years.
- Reducing monthly payments under the Income-Based Repayment Program—capping monthly student loan payments to 10 percent of the borrower’s discretionary income. For graduates entering public service (such as teachers), remaining loans will be forgiven after 10 years.
Without this legislation, as many as eight million students could have seen their current aid cut by 50 percent. That would’ve been absolutely devastating, especially at a time of economic rebuilding when education can mean better jobs and a better future for families and the nation. By making college more accessible and affordable, we can educate our way to a better economy.
I encourage you to take full advantage of these opportunities for higher education and career training. For more information on these programs, go to http://studentaid.ed.gov and http://www.irs.gov/newsroom/article/0,,id=211309,00.html.
Arne Duncan is the Secretary of Education.