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Congressman Brad Sherman

Representing the 30th District of CALIFORNIA

Help with College


On February 13, 2009, Congressman Brad Sherman voted for the American Recovery and Reinvestment Act (also known as the Economic Stimulus Bill). President Obama signed this bill into law on February 17, 2009.

The Economic Stimulus Bill has important provisions to help families deal with college costs. Below are descriptions of the provisions concerning Pell Grants and the American Opportunity Tax Credit.

Pell Grants

The Economic Stimulus Bill increases the maximum Pell Grant to $5,350 for the 2009-2010 school year and $5,550 for the 2010-2011 school year. The Pell Grant program is the largest source of federal aid granted to post-high school students by the federal government. Pell Grants are available to low-income, undergraduate students to help offset the costs associated with obtaining a college or trade school education.

Visit the web page of the Department of Education,, to determine if you will be eligible for a Pell Grant for the school year that starts in September. The deadline for the next school year is June 30, 2010.

American Opportunity Tax Credit

For 2009 and 2010, the Bill will also provide taxpayers with a new "American Opportunity" tax credit of up to $2,500 of the cost of tuition and related school expenses paid during the year. This credit replaces the Hope Scholarship Tax Credit for the next two years. Under the new American Opportunity Tax Credit, taxpayers will receive a tax credit based on 100% of the first $2,000 of tuition and related expenses (including books and lab equipment) paid during the taxable year and 25% of the next $2,000 of tuition and related expenses paid during the taxable year.

Under the previous Hope Scholarship tax credit, only tuition was eligible. Because tuition at the Valley's community colleges (Pierce, Mission, and L.A. Valley College) is less than $1,000, many Valley students were not able to fully take advantage of the Hope Scholarship. I worked hard so that the now-applicable American Opportunity Tax Credit, will also include the cost of required books and lab equipment, thus providing community college students with a greater credit. I am now working to try to include student health fees and transportation costs, but currently, these do not yet count as eligible expenses.

If the student is claimed as a dependent on the parents' tax return, then the parents claim the credit on their tax return. If the parents are divorced or separated, whichever parent claims the student as a dependent is the one that can claim the credit. If the student is not claimed as a dependent by either parent, then the student can claim the credit on the student’s tax return. If the person claiming the credit (whether it is the student or the parent) has an adjusted gross income more than $160,000 for married couples ($80,000 for someone who is single), then the amount of the credit is reduced. If the person claiming the credit has an adjusted gross income of $90,000 ($180,000 for single taxpayers), then the entire credit is lost.