Student Loan Tax Credits

The government supports a majority of students, mainly through special, low-interest loans. There is also the opportunity, however, for students and parents to receive extra tax credits, which can be deducted from yearly taxes owed.

One of these special tax breaks is the Hope Scholarship Tax Credit. This provides students, parents, guardians and families with a tax credit claim for up to $1,500 a year; the money is spent on college tuition, whether it be for themselves or for a child. This credit can be used during the first two years of any undergraduate study, and is limited to households making less than $100,000 a year.

There is also the Lifetime Learning Tax Credit. This allows students and families to claim and deduct up to 20 percent of the money they spend on tuition every year. There is no time limitation for the Lifetime Learning Tax Credit and it can be used for tuition paid to an undergraduate or a graduate program. Like the Hope Scholarship Tax Credit, the Lifetime Learning Tax Credit is limited to only those with a household income less than $100,000.