Obama Wants to Extend College Tax Credit

president obamaOn Wednesday, Oct. 13, President Obama met with Congress to propose keeping a tax break for college students that was a part of last year’s economic stimulus package.

In hopes of making college more affordable, Obama wants to keep the American Opportunity Tax Credit, which allows families to receive as much as $2,500 per student. Though last year’s economic stimulus legislation is set to expire at the end of the year, Obama proposed that the credit be permanent in his budget. The permanent credit will cost roughly $58 billion over 10 years.

“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,” Gene Sperling said, special counselor to Treasury Secretary Timothy F. Geithner. “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.”

A Treasury Department analysis, which Obama highlighted at the Wednesday meeting, reported that 12.5 million students used the credit to help pay for their higher education last year. According to the analysis, the average credit was $1,700. That’s roughly 75 percent more than other similar college-aid programs.

Congressional leaders are showing little enthusiasm towards the permanent tax credit or the $58 billion it will cost to extend the credit over the next decade, but Obama said the credit is valued at $10,000 over four years and will give families a chance to invest in their children’s future.

At a time when a college degree is an effectual stepping stone towards the American dream, administration officials said they are hoping that the credit will be up for discussion after the Nov. 2 congressional elections, when Congress goes back to Washington.

Via The Washington Post

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