New tax law gives break to students

By Perry Swanson
The Metropolitan

Changes to the Federal Tax Code could save freshmen and sophomores at Metro up to $1,500, but only if they wait until January to pay for spring classes.

President Bill Clinton signed the Taxpayer Relief Act of 1997 into law in August. Two parts of the plan immediately affect college students nationwide.

Freshmen and sophomores can get a Hope Scholarship, a tax credit of up to $1,500 for tuition and fees. They must attend college at least half time and must be seeking a specific degree or certificate.

The act also allows a $1,000 deduction for interest paid on student loans in 1998. Students who want the credit should pay tuition after Dec. 31 so the transaction will appear on their 1998 taxes. The credit does not apply to tuition and fees that  are paid by grants or scholarships.

A third part of the act goes into effect later this year. The Lifetime Learning Tax Credit gives up to $1,000 to students past their sophomore year in college or to those who are not seeking a degree or certificate. The credit applies to tuition and fee charges paid after July 1, 1998.

Metro officials have posted a message on the online registration page (http://www.mscd.edu) and have included an alert on the telephone registration system. The college will also distribute a fact sheet about the tax changes to different offices, said Tim Greene, Metroâs associate vice president of Human Resources.

Figures from the Federal Department of Education estimated that 101,000 Colorado students will use the Hope Scholarship tax credit over the next year. The Department of Education expects 123,000 Colorado college students will use the Lifetime Learning Tax Credit.

Students should consult a tax advisor or call the IRS at 1-800-829-1040 for details.