Press Release - President Obama Discusses American Opportunity Tax Credit with College Students and Families; New Treasury Report Highlights Impact of Tax Credit on California

In California, American Opportunity Tax Credit has saved 1,012,000 families $1,461 Million

WASHINGTON, DC – Today, President Obama held a meeting with college students and their families on the impact of the American Opportunity Tax Credit (AOTC), which was a key part of the American Recovery and Reinvestment Act and which the President has proposed to make permanent in his FY2011 budget. In California alone, the AOTC has saved 1,012,000 families $1,461 million – an average of $1,444 per family. For more information on how the Recovery Act has impacted California, visit the new interactive map available here.

"When families invest in the future of their children, they're making an investment in our country's economic future," said Treasury Secretary Tim Geithner. "The American Opportunity Tax Credit has significantly reduced the price tag on higher education for millions of middle class families and will pay dividends for our country in higher growth and incomes."

Today, the Treasury Department issued a new report analyzing how the AOTC has made college more affordable for more Americans. The Treasury report found that the AOTC increased overall tax benefits for higher education expenses by more than 90 percent, helping 12.5 million students and their families pay for college in 2009. Recipients of the AOTC received an average tax credit of more than $1,700, which is an increase of about 75 percent over the average Hope Credit or Lifetime Learning Credit recipient in 2008. The report also found that since the AOTC is refundable, 4.5 million students and families received a tax refund from the AOTC in 2009 with an average value of $800, which they would not have been eligible for in 2008.

A copy of the report, which includes state-specific numbers for California, can be found here.