College

College Aid Gets Fresh Funding

By Jane Bennett Clark, Senior Associate Editor

From Kiplinger's Personal Finance magazine, May 2009

Rather than introduce big new ideas, the bill mostly replenishes underfunded programs and increases amounts available to families.

For instance, the maximum award for Pell grants, for students who qualify, jumps to $5,350 in 2009 and 2010. The bill adds $17 billion to the program, eliminating the shortfall that has kept awards below the max in recent years.

Students who qualify for financial aid will also have better luck landing work on campus. The federal work-study program, which subsidizes student jobs, gets a $200-million infusion. The money helps create part-time work for up to 181,000 students, according to FinAid.org.

Families get a break with the new American Opportunity Tax Credit, which replaces the Hope Scholarship tax credit for 2009 and 2010. The bill increases the maximum credit to $2,500 for qualified education expenses and raises the income ceiling to $90,000 ($180,000 for married couples filing jointly).

Finally, the bill lets families make a tax-free withdrawal from their 529 account to buy their student a computer.

See More From the Stimulus Guide

The New Stimulus Tax Credit

This tax break puts up to $400 in your pocket.

New Car Sales-Tax Deduction

Car buyers have till the end of the year to grab this above-the-line deduction.

Better Benefits for the Unemployed

Qualified filers get an extra $25 a week.

New Homebuyer Credit

Take up to 10% off your purchase price.

Health-Care Subsidy for the Unemployed

Now there's extra help for paying COBRA coverage.

AMT Tax Relief

Taxpayers get a one-year fix on the alternative minimum tax.

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