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Minnesota 2nd District
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Education Assistance
Tax Benefits and Incentives
The Federal government has numerous opportunities for you to receive tax deductions for higher education expenses. These include tax incentives, deductions and exclusions of scholarship and grants from gross income.
Tax Credits
Hope Tax Credit: You may be able to claim a federal individual income tax credit
Lifetime Learning Tax Credit: You may be able to claim a federal individual income tax credit of 20 percent of the first $5,000 of qualified and related expenses you pay for your family.
Deduction for Higher Education Expenses: Beginning in 2002, you may be able to deduct qualified tuition and related expenses even if you do not itemize deductions on Schedule A, Form 1040.
Student Loan Interest Deduction: You may be able to deduct up to $2,500 of the interest you paid on student loans on your federal individual income tax return.
Coverdell Education Savings Account (ESA) - Formerly Education IRA: Earnings on a Coverdell ESA grow tax free until withdrawn to pay for qualified expenses.
Withdrawals from Traditional or Roth IRAs: You may be able to avoid the 10 percent additional tax on traditional or Roth IRA withdrawals before age 591/2 if you use it for qualified higher education expenses.
Education Savings Bond Program (United States Savings Bonds): You may be able to cash in qualified U.S. savings bonds without having to include in your income some or all of the interest earned on the bonds if you use it to pay for qualified higher education expenses.
Employer Provided Educational Assistance: You may receive up to $5,250 in tax free education benefits from your employer each year.
Qualified Tuition Program (QTP): Beginning in 2002, earnings in a qualified tuition program are tax free while invested and tax exempt when withdrawn for qualified higher education expenses. Visit www.mnsaves.org to learn more about Minnesota's Qualified Tuition Program, the Minnesota College Savings Plan.
Provided by the Minnesota Higher Education Services Agency
Work Study
Many students take advantage of on campus work at the institutions they attend. There is Federal money available for the individual institutions to employ students.
The requirements to receive work study is the same as all Federal loans and grants.
The individual institutions hire students and set the pay. To take part in work study opportunities, contact your institution’s financial aid office.
Scholarships
The majority of scholarships come from the private sector and state institutions.
In addition to local and organizational scholarships, the State of Minnesota has some scholarship opportunities.
Some of the most notable are:
- The Robert C. Byrd Scholarship: This is given to seniors in High School who have an outstanding academic record.
- Minnesota Indian Scholarship: This is open to all Native American descendants of at least 1/4 Native American ancestry and is based on need.
- Minnesota Academic Excellence Scholarships: For students enrolled full time in a nonsectarian, baccalaureate degree-institution.
For more information on these, contact the MN Dept. of Children, Families and Learning 651-582-8255
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