NEW YORK (CNNMoney.com) -- The American Opportunity Tax Credit helped soften the blow of college tuition for more than 12 million students last year, but it's due to expire at the end of this year unless President Obama gets his way.
To remind Congress of the importance of extending the credit, top government advisers spoke to reporters Wednesday about why they believe the break is worth keeping around.
"[Obama] believes that it is important for this to be extended and for families to have the certainty and confidence that this [credit] will be there when they are making the choices about sending their children to college," said Gene Sperling, Counselor to the Treasury Secretary.
The tax break, introduced under the government's 2009 Recovery Act and applicable to 2009 or 2010 college tuition, expands the existing Hope Credit to include more lower- and higher-income Americans.
Unlike the Hope Credit, the AOTC is also partially refundable and covers more of the expenses associated with sending a child to college, like textbooks and computers. It is available for the first four years of post-secondary education, up from two years under the Hope Credit.
More money is also doled out to students and parents under the AOTC. Students with incomes of $80,000 or less qualify for a credit of up to $2,500 a year, an increase of $700 from the previous Hope Credit.
If the tax break is made permanent, a student would be able to receive a credit of up to $10,000 over four years.
Last year, students and families received an average credit of more than $1,700, which is 75% more than the average amount dished out under the Hope Credit, according to a Treasury Department analysis.
The AOTC boosted tax benefits for education expenses by more than 90% and helped 12.5 million students pay for college last year. And because the tax break is refundable, 4.5 million students and their families received an average tax refund of $800 from the credit last year.
But with the cost of making the AOTC permanent running at an estimated $58 billion over a 10-year period, Congress hasn't signaled that it plans to keep the credit around.
Obama and government officials, however, think this particular credit is worth the cost.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.80%||3.88%|
|15 yr fixed||3.20%||3.23%|
|30 yr refi||3.82%||3.93%|
|15 yr refi||3.20%||3.23%|
Today's featured rates:
Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More
Honda and General Motors are creating a new generation of fully autonomous vehicles. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Whether you hedge inflation or look for a return that outpaces inflation, here's how to prepare. More