Eligible students may claim educational tax credit, lower their college expenses

High school seniors may be interested to learn that the government is offering educational credits that can reduce undergraduate students' or their families' tax liabilities.

This kind of financial aid is typically available only to U.S. citizens, but under certain circumstances international students pursuing courses in the U.S. who have taxable income under the Internal Revenue Code may also be able to take advantage of it.

The office of congressman Chaka Fattah, a Pennsylvania lawmaker who was instrumental in passing the relevant legislation, says students who gather official documents and receipts can claim the new $2,500 American Opportunity Tax Credit for higher education expenses in 2009.

"We need to raise the bar of expectation for all young people and other aspiring students - and the American Opportunity Tax Credit is a significant step toward making college affordable to all," Fattah said.

The AOTC will allow students to take a credit on their 2009 federal income tax return for up to $2,500 for eligible expenses - including tuition, books and fees - for higher education paid out of pocket in 2009. However, tuition and other expenses covered by scholarships and grants are not eligible for the credit.

The credit will also be available next year, and President Obama's stated goal of increasing educational opportunities and college enrollment in the U.S. suggests students may count on a range of other financial incentives and relief in the coming years.