For many current and prospective students, paying for college is one of the main challenges to obtaining higher education. Fortunately, new tax provisions may provide relief to millions of people and help set them on the path to a better future.
Financial experts say that educational deductions covering up to $4,000 in tuition and fees are still in effect, but there is a new tax credit that may offer a better value. That is because - unlike a deduction - it reduces one's tax bill dollar for dollar, rather than reducing the amount of taxable income.
Specifically, the American Opportunity Credit, which was introduced as part of the stimulus package and is an enhanced version of the old Hope credit, offers a higher income limit and bigger tax breaks, according to Kimberly Lankford, writing for Kiplinger's Personal Finance website.
Students may qualify for this credit of up to $2,500 when they spend at least $4,000 in tuition and qualified expenses, and the credit - which will be available for both 2009 and 2010 - now covers four years of college rather than just the first two, Lankford further explains.
Given these financial incentives, individuals seeking to switch careers or to increase their salaries may consider enrolling in bachelors programs in fast-growing fields such as healthcare or IT to take advantage of new employment opportunities. 
