Secretaries Duncan and Geithner Host Student and Parent Town Hall on Paying for College

Secretary Arne Duncan, U.S. Secretary of the Treasury Tim Geithner, and D.C.'s Wilson High School Assistant Principal Charlette Butler

Secretary Arne Duncan, U.S. Secretary of the Treasury Tim Geithner, and D.C.'s Wilson High School Assistant Principal Charlette Butler

We cannot underestimate the impact of the American Opportunity Tax Credit on 9.4 million students nationwide. This tax credit will make college more affordable for our future business leaders, scientists and teachers and help families struggling with rising tuition bills and growing student loans.

—Secretary of Education Arne Duncan

Expanded tuition tax credits for working class families, larger Pell Grants for low-income students, and making student loans more affordable for all college graduates were on the docket today as U.S. Secretary of Education Arne Duncan joined U.S. Secretary of the Treasury Tim Geithner, D.C.’s Wilson High School Assistant Principal Charlette Butler, nearly 50 Wilson seniors, their teachers, parents and community leaders at the University of the District of Columbia for a town-hall style forum on the Administration’s efforts to ensure all Americans reach their college dreams. (See photos.) Wilson High School, the District’s largest comprehensive high school and boasting an impressive 90% college-going rate among graduates, is currently housed on the UDC campus while a $100 million renovation is being completed at the high school campus.

The town hall forum commenced with Secretaries Duncan and Geithner extolling the benefits of the recently extended and enhanced American Opportunity Tax Credit (AOTC). The credit, initially created under the American Recovery and Reinvestment Act and extended through 2012 as part of the Tax Relief, Unemployment Reauthorization and Job Creation Act of 2010, provides families with college tuition expenses the opportunity to claim a tax credit of up to $2,500 each year for up to four years per student. For students claiming the maximum credit for these four years, the AOTC will provide up to $10,000 to help pay for the cost of college.

The credit equals 100 percent of the first $2,000 of expenses, and 25 percent of remaining expenses, up to a total credit of $2,500. The maximum available credit for 2011 would cover about 80 percent of tuition and fees at the average two-year public institution, or about a third of tuition and fees at the average four-year public institution. In addition, the AOTC is partially refundable, meaning that low-income families with no federal income tax liability can receive up to a $1,000 tax refund to help defray college expenses.

Secretary Geithner unveiled a new Treasury Department analysis showing that 9.4 million families with college students across the nation will benefit from over $18.2 billion in tax relief to help make college more affordable and accessible in 2011. He further noted that in the District of Columbia, the Wilson Class of 2011 and nearly 16,000 families of enrolled college students across the city will be eligible to file for the tax credit this year. For parents and students struggling to pay college tuition and fees or budgeting for future student loan debt, this partially-refundable tax credit will make a positive difference in their lives.

Wilson students and parents inquired about the range of federal initiatives to assist low-income families with the rising costs of college and engaged the Secretaries on the Administration’s historic increases in the Pell Grants program as well as access to Federally subsidized student loans and college work-study programs; discussed actions taken to simplify and streamline the FAFSA form and federal financial aid process and pressed the Secretaries for opinions on the future passage of college access legislation for immigrant families like the DREAM Act. Angela Benjamin, a physics teacher at Wilson, and feted at the forum by Secretary Duncan for her recent designation as one of the seven most effective teachers in DC Public Schools, asked about the benefits of the recently expanded income-based repayment program (IBR) and whether its existing loan forgiveness provisions for teachers would be “grandfathered in” for experienced educators like herself. To the delight of the crowd, Duncan replied, “Angela, me and you lose on this one”.

However, for millions of America’s future college graduates and our nation’s future public servants, IBR will make a huge difference in their personal finances and ability to afford their student loan payments. Under IBR, borrowers who assume loans after July 1, 2014 will be able to cap their student loan repayments at 10 percent of their discretionary income. If they make their payments, all borrowers will have loan balances forgiven after 20 years. Teachers, nurses and other public servants will have any remaining student loan debt forgiven after 10 years.

To read more about what Secretary Duncan and Geithner wrote about today’s visit and the benefits of AOTC, see their blog post.


Click here for an accessible version of the video.

Todd May
Office of Communications and Outreach

13 Comments

  1. How will this department benefit the lives of other families? How does this department effect the daily lives of our citizens today? Do you see any improvements or newly accomplished tasks in the future of our country, this department, and our society?

  2. Why is my child’s federal student loan interest rate predominantly higher than the average home mortgage rate? We need to reduce the interest rates for student loans so that our college grads aren’t beginning their careers (if they can even get a job) deep in debt. Tax credits help, but the interest rates need to be adjusted.

  3. I heard there was a program or programs designed to assist future college professors in math and science in repaying their student loans. I can’t find any information on this topic. Do such programs exist and if so are they forgiveness programs or based on years of service?

  4. As I sit here and write this now our online tution is going up by $275.00 a hour. Can someone stop this before it gets out of control. I am a student of a online unversity in Chicago. Il and starting in April the rate of school is now to much for me to complete my education!!!!

  5. I would like to go back and get my degree but i can’t seem to get a job to pay off my student loans so that I can go back to school. I try to find grants but it somehow seems like a wide goose chase. I am a single mother in a small farm community who needs help.

  6. I am using a lot of student loans and already paid one for My associates degree. I am an honer student and last semester made it to deans list .I will be going on for a dual program in Music to finish hoping to bring back music into low income communities. I am worried AI can’t find any jobs and I am hoping there is one out their for Early Childhood as I will only be able to teach up nto third grade but anm hoping to get a music program started for extra income since I am now single and live by myself. Will there be grants to cover me as a half time student because I am struggling and always behind.lost my job in 09 and been doing full time till something turns up. Will there be forgiveness loans. and how will I know how to take advantage.

  7. How will this credit affect someone like me who just graduated with an associates degree in 09 and wants to go back to pursue another associates degree in the same field (Healthcare)?

  8. My spouse is a Army Vetern, I need to know what educational funds are available for children & spouses who want to go back to college?

    Thank you

  9. I and many others could not agree more with Amber’s comment (comment #1). TRiO personnel are the students’ counselors, motivators, and advisors throughout their high school career and beyond. Additionally, personnel of the Upward Bound Math-Science TRiO Program should certainly receive student loan benefits. Math and Science are areas of critical concern, as recognized by President Obama. UBMS is heading up much of the work that is necessary to get America back on track in the areas of Science, Engineering, Technology, and Mathematics.

  10. i want to find out whether you financial aid for non federal students and students outside of the United States of American

  11. What about loan forgiveness for the employees that work with low income students such as TRIO employees. We have lots of debt in our bachelor and master degrees that we get to be able help these students. Our loans are a financial burden on us as well. Do you know if anything will ever come about for us.

    Thanks!

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