Obama Plan Improves Financial Aid.......

Carlita
Staff Reporter

         Finally! On Jan. 6 the House of Representatives introduced a bill containing the American Opportunity Tax Credit Act (H.R. 106). The bill “allows individuals a refundable creditor for higher education expenses.” The Internal Revenue Code has been revised to give individuals refundable tax credits—up to $4,000. Thus, eligible students will receive the stated amount for their education, precluding them from paying out of pocket. What does this mean for NOVA students? Affordable education costs, plus a simplified application process for financial aid.
         In his “American Dream” speech, given in 2007 at Bettendoff, IA, then-Senator Barack Obama said, “we need to put a college education within reach of every American.” He continued and clarified his goal: “I [will[ create a new and fully refundable tax credit worth $4,000 for tuition and fees each year, which will cover two-thirds of the tuition at a average public college or university.” Soon, when H.R. 106 goes into effect, students will not have to worry as much abut rising costs of classes and books. The difference is drastic, considering the price of one or two NOVA classes—over $500, in-state—an the hundreds of dollars spent on text books in comparison to the tax credit relief. Full-time students would pay about as much as part-time students do now. Pell Grants (need-based scholarships for low-income students) are also helping out. They used to be capped at $4,050, but the new maximum under the Act is $5,100. The grant's increase will enable an increase in attendance of lower-income students.
Applying for financial aid is a complicated process for most students. NOVA's financial aid process requires students to fill out over five pages of online forms before they are considered for aid. There are no shortcuts to determine eligibility, which depends mainly on income. President Obama plans to change the financial aid process. According to Obama's campaign website, he will seek to eliminate bureaucratic FAFSAs in favor for a simple tax-based system. When families fill out their tax forms, they'll just check a box authorizing the government to calculate their financial aid eligibility using the tax data. Additional forms, applications, FAFSAs and red tape will be eliminated.
         The catch: 100 hours of annual community service (which may be performed during the school year or over the summer months) is required to receive the credit.
         Students wishing to take advantage of American Opportunity Tax Credit Act may check section 484(a)(1) of the Higher Education Act of 1965 (20 U.S.C.1091(a)(1) and the Taxpayer Relief Act of 1997. So far, H.R. 106 has not been confirmed in the senate. President Barrack Obama intends to have the bill in effect by Dec. 31, 2009.

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