Credit for military service
The College-Level Examination Program® (CLEP®), sponsored by the College Board, gives military personnel the opportunity to bypass introductory courses and receive college credit for their knowledge by demonstrating mastery of knowledge in introductory college-level courses. CLEP exams are administered on computer at 1,300 college test centers. 2,900 colleges and universities grant credit for passing scores on CLEP.
Federal tax credits for college tuition
There are two tuition tax credit programs offered by the federal government. The Hope and Lifetime Learning programs are designed to help parents and students pay higher education costs. Within certain earnings criteria, you may qualify for a reduction in federal tax liability of up to $1,500. Because they are tax credits, you are allowed to subtract on a dollar-for-dollar basis the amount of the credit from your total federal income tax bill.
The Hope tax credit
• This tax credit applies only to tuition and fee expenses for the first two years of post-secondary education
• The student must be enrolled at least 1/2 time for at least one academic period
• The maximum yearly credit per eligible student is $1,500
• There is no limit on how many family members can receive the credit
• To claim a Hope credit for your expenses, your parents must also claim an exemption for you; if your parents do not claim you as an exemption, you can claim the Hope credit for yourself
The Lifetime Learning tax credit
• Available for all years of post-secondary education and for courses (even a single course) to acquire or improve job skills
• The Lifetime Learning credit can only be used for tuition and fees; the credit can be claimed for 20 percent of the amount you pay
• The amount of qualified tuition and related expenses you may take into account in figuring your Lifetime Learning credit is $10,000 per tax return and the maximum yearly credit is $2,000.
Consult IRS Publication 970 for specific rules on these tax credits. Also, consult your tax preparer or financial adviser prior to claiming either of these credits.
NOTE: We encourage students to thoroughly research the availability of Federal Aid and other low or no-cost education funds before considering a private loan. Private loans are designed to help you pay the difference between available financial aid and your college's actual cost of attendance.