Hope Credit

College is expensive, whether we’re talking about a university, a junior college, or a trade school. Loans help if we can get them, and part-time jobs help if we can work them, but it can still be a financial stretch to make our post-high-school educational dreams come true.

But before we sign up to become a pharmaceutical guinea pig or start selling our plasma, there is another option we can look into: the Hope Scholarship Tax Credit, or Hope Credit for short.

The Hope Credit is a tax credit that we can claim each year for the first two years we attend a post-secondary educational institution part-or-full-time. We can claim 100% of our tuition and other school costs up to $2,000, then we can claim 25% of additional costs up to $4,000. In other words, the max amount we can claim is $2,500 per year for the first two years of our education. If someone claims us as a dependent, like a parent or spouse, then they get to claim the credit.

The Hope Credit can be a huge help, but it comes with a few caveats. First, if we’ve been convicted of any felony drug charges within the last year, we can’t get the credit. Second, we can claim it against tuition and book expenses, but we can’t claim it against, say, fraternity dues or medical insurance costs. Third, our household income has to meet certain restrictions; they tend to change year by year, so it’s best to check to see if we qualify if we’re planning on claiming the credit.