Apr 07, 2017 08:31 AM EDT
Tax Credits and Deductions College Students Should Take Advantage Of [Video]
The continuous rise in the cost of college education, many students just find it more difficult to pay for their tuition and college fees. Most of them won't just have a choice but to taka on student loans.
According to Forbes, 71 percent of students who graduate from a four year college leave with student loan debt, and that means only very few of all the college students across the country can afford higher education. In fact, an average graduate will have to carry an amount of roughly $37,000 to pay off after finishing college.
While post-secondary education can be very challenging when it comes to finances, there are ways to make the burden a little lighter. There are ways by which college grads can boost their tax refund and here are some of those, according to USA Today College.
American Opportunity Tax Credit
This is one of the most valuable tax credits available because the credit is worth up to $2,500 for the money that students will have to pay for tuition and fees and other expenses related to education. Students can be eligible if they are at least enrolled half time. They can also claim the credit for four years per student.
Lifetime Learning Credit
With Lifetime Learning Credit, students can claim $2,000 every year when they are in school. It will not matter if they take longer than four years to finish their college education. The only drawback here is that the it will not be refundable so students cannot take their money back.
Student Loan Interest Deduction
Students also have the option to deduct their student loan interest up to $2,500. They just need to come from a qualified lender in order to qualify for this option. Example is a private bank or the federal government. However, if their family members took loans to pay for school, these are not considered eligible.
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