Obama highlight benefits of college tax credit

AP News
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Posted: Oct 13, 2010 5:42 PM
Obama highlight benefits of college tax credit

Calling education an "economic imperative," President Barack Obama on Wednesday asked Congress to make permanent a $2,500 college tuition tax credit that is scheduled to expire at the end of the year.

Obama earlier this year asked Congress to make the American Opportunity Tax Credit permanent. The request was part of the budget plan Obama sent to Capitol Hill, but lawmakers took no action on it.

Obama said Wednesday that this new tax credit _ it was part of the $814 billion economic stimulus bill he signed shortly after taking office in 2009 _ would help middle-class families afford to invest in their children's future.

"I am calling on Congress to make this tax credit permanent so it's worth up to $10,000 for four years of college because we've got to make sure that in good times or bad, our families can invest in their children's future and in the future of our country," Obama said in the White House Rose Garden.

He was joined there by three families that are using the tax credit to help send their children to college.

The tax credit is available only for the 2009 and 2010 tax years. Making it permanent means families could claim it during all four years of college, for a maximum of $10,000 per student.

The pitch was Obama's latest election-season appeal to college students, a voting bloc he has been courting in the run-up to the Nov. 2 elections, where Democrats are expected to fare poorly. A new Associated Press-mtvU poll finds that college students have cooled in their support for Obama.

Obama has appeared at campus rallies in Wisconsin and Maryland, and planned a third such appearance at Ohio State University on Sunday. He also answered questions during a webcast town hall Tuesday night at George Washington University and was scheduled to take part Thursday in a youth town hall being broadcast live on MTV, BET and other cable networks.

In his Rose Garden remarks, Obama highlighted steps his administration is taking to improve education "from the cradle to the classroom" and charged that providing a quality education would be more difficult under spending cuts proposed by Republicans.

"There's an educational arms race taking place around the world right now," Obama said, naming China, Germany, India and South Korea. "Cutting back on education would amount to unilateral disarmament. We can't afford to do that."

He also said "offering our children a world-class education isn't just a moral obligation, it's an economic imperative."

A new Treasury Department analysis says 12.5 million students and families used the credit last year, receiving an average credit of about $1,700. The tax credit is also refundable, and some 4.5 million people collected an average tax refund of $800 last year, the report said.