American Opportunity Tax Credit and Other Educational Tax Benefits
There are a variety of tax credits, deductions and savings plans available to taxpayers to assist with the expense of higher education.
- A tax credit reduces the amount of income tax you may have to pay.
- A deduction reduces the amount of your income that is subject to tax, thus generally reducing the amount of tax you may have to pay.
- Certain savings plans allow the accumulated interest to grow tax-free until money is taken out (known as a distribution), or allow the distribution to be tax-free, or both
- An exclusion from income means that you won't have to pay income tax on the benefit you're receiving, but you also won't be able to use that same tax-free benefit for a deduction or credit.
The American Opportunity Tax Credit is available to eligible students during four years of post-secondary education. The maximum credit is $2,500. The full credit is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above these levels.
Other tax benefits include the Lifetime Learning Credit, Exemption of Employer-Provided Assistance, Exemption of Scholarships and Tuition Remission, and Deduction of Student Loan Interest.
Major Financial Aid Programs
Parkland administers a variety of federal and state programs, along with many special scholarships just for Parkland students.Monetary Award Program (MAP)
. The MAP is awarded by the Illinois Student Assistance Commission (ISAC) and is designed to pay tuition and basic fees at Parkland for Illinois students. MAP EligibilityFederal Pell Grant.
This grant is designed to help pay college-related expenses. The exact dollar award is determined by the student’s class load and the Expected Family Contribution (EFC) as calculated by the federal government.Federal Work-Study (FWS).
As a campus-based program, FWS is awarded through the Office of Financial Aid in the form of part-time employment. Students who participate generally work from 10-20 hours per week and are paid twice a month. The actual FWS award is based on demonstrated financial need.Federal Supplemental Educational Opportunity Grant (FSEOG)
. As a campus-based program, the SEOG is awarded to students who have exceptional financial need. SEOG awards depend on the amount of funds available.William D. Ford Direct Loan Program.
Students enrolled in either college transfer or vocational/technical programs may apply for this loan. Depending upon demonstrated financial need and academic program length, dependent/independent freshman students may borrow up to $5,500/$9,500. Dependent/independent sophomores may borrow up to $6,500/$10,500 with demonstrated financial need. Repayment begins six months after the student drops below half-time student status, but there are deferment provisions. Monthly repayment varies with the total amount borrowed.
Application for the Direct Loan at Parkland begins when applying for financial aid on the Free Application for Federal Student Aid. All applicants must have a Federal Pell Grant eligibility determination made before loan processing can be completed. First-time Parkland borrowers must complete loan entrance counseling and a master promissory note before receiving their first check. Direct loans are made through the U.S. government.Direct Parental Loan for Undergraduate Students (PLUS).
PLUS loans are available to parents of dependent students who are enrolled at least half-time. Repayment begins within 60 days of signing a promissory note unless the parent opts to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time.. Application for the Direct PLUS begins when completing a PLUS Application, which is available from the Office of Financial Aid. Direct PLUS loans are made through the U.S. government.Perkins Grant
The Carl D. Perkins Vocational and Technical Education Grant, funded by the U.S. Department of Education, provides assistance to students in career and technical education programs. Intended to increase the competitiveness of the U.S. in the world economy by improving workers’ technical skills nationwide, the Perkins Grant provides financial assistance for reimbursement of additional course fees and lab fees; purchase of class supplies, required tools, instructional materials, and uniforms.
All Perkins Grant recipients must be enrolled in one of the career programs at Parkland College. These include all Associate of Applied Science degree and Certificate programs. Call career programs at 217/351-2218 for application information.Parkland College Foundation Scholarships/Special Scholarships
. Students may also apply for special scholarships and scholarships available through the Parkland College Foundation.