Financial Aid=HUH??

sgc914
Tue, 14 Apr 2009 23:47:03 +0000

hey guys, for anybody who is considering some loans, I was reading Money magazine recently (April 2009 issue) and they reported that the recently passed economic stimulus legislation had a provision for tuition-paying parents in the 2009 and 2010 tax years. It’s called the American Opportunity Tax Credit, a tax credit that ranges from $1500 to $2500 a year. Unlike the old Hope Credit it can be claimed all 4 years. It also expands the range of people who qualify for this credit. If your family makes $180,000 or less ($90,000 for single parents) you’ll get at least a partial credit (unlike the Hope which excludes those making more than $120,000). There are also other credits like the Lifetime Learning credit, which they didn’t go into specifics on (they did mention it’s up to a $2000 credit), and a tuition deduction of $4000 but the writer of the article opined that the American Opportunity credit is “the best of the bunch”. However, you might want to look those other ones up, just in case.

Also, and this is the biggie for me at least, you can deduct all or part of the interest you pay on college loans, up to $2500, if your parents make $150,000 or less ($75,000 for single parents). I’m not sure if this includes interest earned on federal loans, but if it is, the highest interest rate on a federal loan is 8.5% and if you divide 2500 by .085 it comes to around a 29k loan. Taxes are always tricky though and I don’t pretend to be an expert, so definitely check me on some of those facts, especially if they’re requiring private loans; those are so much riskier.

Also, after browsing through this thread I’m a little confused. My EFC is around 32k and I have a Stern scholarship of 20k and a 1k national merit scholarship. My parents can probably shoulder some of the cost before I graduate. Did I get a pretty good aid package? I saw someone with the same aid package as me, also going to Stern, and they were shot down about how they have to make a very high salary in order to pay off their loans when they come out. I always assumed I could just pay everything back once I graduated because of my getting a business degree. A large part of my decision really is financial aid; like someone else on the board I got into Barnard, which is a very different track (I would probably do like…English rofl. I love it though), but I have no aid so it’s almost a non-consideration.