Along with helping the unemployed, the stimulus package offers some additional relief for students.  However, student loan limits will remain the same which could end up hurting a lot students looking to apply to college.  However, there were some bright spots in the plan.

Hope Scholarship Tax Credit – Now up to $2,500
100% of qualified tuition and related expenses of up to $2,000 can be claimed as a tax credit.  After that, 25% of  the next $2,000 can be claimed as a tax credit, bringing the total tax credit to $2,500.  This credit can now be claimed during the first four years of college; it use to be the first two years.

What Can I Claim as a Tax Credit?
Tuition and fees, and NOW course materials for tuition and fees

Who Qualifies?
Single – phased out if your adjusted gross income (AGI) exceeds $80,000
Married – phased out if your adjusted gross income (AGI) exceeds $160,000

What if I don’t owe any or owe very little taxes because my income is so low? You can receive a tax refund for up to 40% of the credit

Pell Grants
The federal government decided to increase the funding for Pell Grants to $5,350 in 2009-10 and $5,550 in 2010/11 from $4,731. The grants which don’t have to be repaid are designed for the lowest income students.

529 Savings Plans
For those of you that don’t know, a 529 savings plan is a tax-free college savings account sponsored by a particular state or groups of states that is used strictly for college expenses. You can now use money from your 529 savings plan to purchase computers and other technology related goods for your college education.

Federal Stafford or Perkins Loan Limits are NOT Increased
Despite the House of Representatives and the Senate requesting loan limits to be increased, the final bill contains no such perk.  With lenders continuing to reduce or scrap their private student loan programs, students are left with few options.