More Information About the HOPE Scholarship
The federal government offers several incentives to assist you as you further your education. The HOPE Scholarship is not really a scholarship, but is a tax credit that helps families who have students attending certain colleges and universities and who meet certain criteria. If you are eligible, it can be a fantastic way to make college a bit more affordable.
After awhile, real college savings comes from “a little bit here and a little bit there.” Getting a large grant, a scholarship, or even a loan is a great lump sum that can cut a huge chunk out of your tuition costs. But what about the smaller expenses? You know, that hundred bucks or two that you need to spend on books, fees, food and the like? That sort of financial aid can come from smaller sources. But, you have to do some searching to find them. Keep reading to learn more about the HOPE Scholarship and if you are eligible to receive it.
What is the HOPE Scholarship?
It’s called a scholarship, but it’s really a tax credit. To get this credit, your family has to actually owe taxes. You cannot get a refund for the HOPE Scholarship if you do not owe any money in taxes. If your family owes less in taxes than the maximum HOPE amount, you can only take the credit up to the amount of taxes that you owe. To clarify, let’s look at the actual credit amounts you can receive. If you’re filing your 2006 returns, you may claim up to $1,650 for each eligible dependent for up to two years. The HOPE credit is only available for the first two years of post-secondary education, so make sure you claim it in your freshmen and sophomore years.
Who Can Receive the HOPE Scholarship?
Again, you have to file and owe taxes to get this type of credit. The person filing the taxes has to claim an eligible student as a dependent. And there are income restrictions that apply. For singles, your income cannot exceed $55,000 if you plan to utilize the credit; for couples who file joint returns the limit is $110,000.
An “eligible” student is one who is enrolled in school at least half-time at an eligible program leading to a degree or certificate. And you have to be in your first two years of study, so don’t wait around. If no one else claims you as a dependent, you can use the credit yourself.
How Do I Apply for the HOPE Scholarship?
It’s pretty simple to apply for the HOPE Scholarship. Simply report your tuition and fees paid out and any scholarships and grants you used to pay for expenses. Your school is required to send you and the IRS this information on a form called the 1098-T. Fill out form 8863 to claim the HOPE Scholarship credit. It might be a good idea to check with your tax advisor, too, if you have additional questions.
You see, it’s not about “cheating the system” or trying to manipulate anything. Tax credits are there for a reason—to save hard working people money on the college education they have worked hard to obtain. In the long run, you are rewarded for your immediate sacrifices as a college student with such tax credits and various other assistance programs.
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