February 17, 2009 14:35 ET

NACS: Textbook Tax Credit to Benefit NY Students

OBERLIN, OH--(Marketwire - February 17, 2009) - New York middle- and low-income students and families who have struggled to purchase college textbooks and other course materials will receive major direct financial relief for their expenses thanks to the inclusion of the new American Opportunity Tax Credit in the federal stimulus package signed into law today by President Barack Obama.

"Needy college students and their families are faced with a variety of costs in paying for college," said Richard Hershman, director of government relations for the National Association of College Stores (NACS). "While textbooks and other course materials are both required and vital to a student's academic success, they are rarely covered by traditional financial aid."

Under the new tax credit, many students this year will be able to write off a significant portion, if not all, of the cost of their textbooks. The new American Opportunity Tax Credit contained in the stimulus marks the first time course material purchases are included as an allowable expense under the higher education tax credits. Previously, the Hope and Lifetime Learning Credits could only be used to offset tuition and related fees. As a result, few students are able to take advantage of the tax credits for out-of-pocket required expenses such as textbooks. The inclusion of course materials in the stimulus package is the culmination of strong bipartisan consensus achieved over several years and included the strong leadership of Sen. Charles Schumer who lead the call for such relief in the Senate.

The new tax credit -- worth up to $2,500 -- is an increase of $700 from the current Hope credit and is available for four years of education, not just the first two. Up to $1,000 of the tax credit is "refundable," meaning even students and families who do not earn enough to owe federal income taxes still qualify for a partial refund check.

The independent Center for Budget and Policy Priorities estimates that approximately 295,000 additional New York students will qualify for a refundable check than now do so. Further, because of the inclusion of course materials, students who have not been able to fully take advantage of the Hope tax credit, will qualify.

"Combined with proactive campus-based efforts already underway across the state of New York to make course materials more affordable, the new tax credits will go a long way to help students succeed in school and in the economy," Hershman said. "The American Opportunity Tax Credit means real financial relief for New York students and families struggling to pay for their education."

About NACS

Headquartered in Oberlin, Ohio, the National Association of College Stores (NACS) is the professional trade association representing the collegiate retailing industry. NACS represents more than 3,100 member stores that serve America's college students while supporting the academic missions of higher education institutions. Additional information on the college store industry can be found online at www.nacs.org.