Tax-Based Student Aid Overview
When you are thinking about ways to
pay for college,
don't overlook tax-based student aid programs. Although you don't receive the money
from these programs until you file your income taxes the following calendar year,
the money you get back can help fund expenses the next academic year. Families receive
$14.8 billion of student aid in the form of education tax benefits on an
annual basis. Surprisingly, 27% of eligible students don't take advantage of tax-deferred
Tax-based student aid for college comes in the following forms:
- Credits: A credit reduces your tax liability (the amount of tax that you pay to
the government) dollar for dollar.
- Deductions: A deduction reduces your amount of taxable income.
- Savings Incentive Programs: A savings incentive program, such as a
allows you or your family to save and invest money tax-free for certain education
Some examples of tax-based student aid programs you may be eligible for include: