College students have always tried saving as much money as possible. With college being so expensive in every way, students, young and old, have always explored different ways to conserve their cash. Help might be on the way this tax season thanks to American Opportunity Tax Credit.

According to the website, www.textbookaid.org, course materials now qualify for tax credit: “Under the American Recovery and Reinvestment Act’s (ARRA) newly created American Opportunity Tax Credit, textbook and other course material expenses – along with tuition and fees incurred in 2009 and 2010 not covered by scholarships or grants – may be claimed as a tax credit on that year’s tax return!”

The Web site shares information that could turn out to be very helpful to broke students this spring. The American Opportunity Tax Credit is currently being proposed by President Barack Obama. In President Obama’s efforts to make college more affordable, he is directly reducing the amount of money a person owes in taxes by offering students off-setting “tax credits.” The American Recovery and Reinvestment Act was signed into law by President Obama on Feb. 17, 2009.

The American Opportunity Tax Credit is meant to offset two-thirds of the costs of a four-year public college education and would effectively make community college free for most students.

In 2009 and 2010, students can receive a tax credit of up to $2,500 (100% of the first $2,000 and 25% of the next $2,000), which covers the out-of-pocket cost of tuition and related expenses. That also includes all course materials paid during the taxable year. Forty percent of the credit is refundable; maximum refundable amount being $1,000.

The Web site claims that this plan helps an estimated 4 million additional students attend college than the previous tax credit, the “Hope Credit.”

President Obama has proposed to make the tax credit a permanent option for students on a budget.