Bayh: Stimulus gives college tax cut

INDIANAPOLIS (WISH) - Indiana Senator Evan Bayh says there is a lot about the stimulus plan he would have changed if he had written it, such as less spending and more tax cuts, but he says it has a couple of big benefits for Hoosiers.

One is a tax credit for college students, which includes a $2500 tax credit per year for students in undergraduate higher education programs. The credit is for families with combined incomes of $160,000 or less.

It will be a big break for the Evans family. Soon, this family may have four students in college at the same time. Bayh said the family would be able to take $10,000 off its tax bill.

"In addition to that, our family would receive $800 from the making work pay credit for both 2009 and 2010," said Debbie Evans.

Sen. Bayh said that credit is a $400 a year reduction in federal taxes for working Americans.

"What this will do is to keep things from getting as bad as they otherwise would have been if we'd done nothing," said Bayh.

IUPUI Chancellor Charles Bantz said the tax breaks should go a long way in making college more affordable for Hoosiers. IUPUI has had record enrollment for two semesters. Now, Bantz said more students may apply as they retrain or change careers.

Bantz said, "One of the things in Indiana is we have a large number of people who have some college, but not finished and the credit obviously says "you can do that."

"School is so expensive. It's like wow. Well I hadn't expected the cost to be this much, but wow, that's great," said Tiffany Jolly, IUPUI student.

Tiffany and other students can begin claiming the college tax credit on 2009 taxes.