During his State of the Union Address, President Obama, wisely urged Congress to make permanent the American Opportunity Tax Credit (AOTC). Doing so will help prevent college tuition from rising beyond the reach of millions of American students.

Introduced in the Recovery Act, the AOTC improves upon the less effective Hope credit by expanding the maximum deduction, increasing the years of eligibility, extending the benefit to additional families, applying the credit to more expenses, and making it partially refundable.

Under the old regime, students and their parents could claim up to $1,800 against yearly tuition expenses for up to 2 years. Now, those same families can claim up to $2,500 against tuition and school supplies for up to four years ($10,000).