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Usually, when one thinks of financial aid, they think about getting it on the front end, i.e., toward paying one’s tuition before you start class. Thanks to last year’s stimulus act, one can now get money on the back end, too. In other words, one can get a tax refund for going to college. This could be a few thousand dollars and works for on campus and online college course attendees.

This new program was dubbed the American Opportunity Credit. It’s an expansion of what was previously the Hope Credit. If one attended any kind of college this last year, whether it’s brick and mortar or online, one can even apply for it this April.

There are several key differences between the Hope and the Opportunity credits. According to the IRS, the Opportunity Credit entitles more students (and their parents) to qualify over the next two years for a tax credit to pay for college expenses, including many with higher incomes and those who owe no tax. It also adds required course materials, possibly including laptops and PCs, to the list of qualifying expenses.

Originally the limits on this credit were for individuals who made less than $48,000 and married couples who filed joint returns less than $96,000. The credit is now open to $80,000 and $160,000 or less. If one’s income(s) are $90,000 or $180,000 respectively, one can also apply, but they won’t get the maximum amounts. It cuts off when one exceeds those numbers.

One gets a full refund for the first $2,000 in tuition, fees and/or costs related to going for a degree. If the costs go beyond that first $2,000, one can have an additional 25% refunded up to the next $2,000. For example, if a school year costs $6,000, one gets a 100% refund for the first $2000, 25% of the next $2,000 (or $500) and nothing for the last $2,000. That’s a total of $2,500 credit when filing one’s 2009 or 2010 income tax.

One has to be careful about the “cost related” bit though. Buying a computer does not automatically make it refundable. On the other hand, if a class or school forces one to buy a laptop then it’s an item that can be claimed.

Most important is the Opportunity could turn into a refund. One can be entitled even if one gets a tax refund without the credit. Again there are some provisos. The refund has a cap of $1,000 instead of $2,500.

There’s one other important detail, and that’s the Opportunity credit is only good for the first two years of college. For juniors and beyond, one has to apply for what is called a Lifetime Learning credit. No matter how a student looks at it though, it’s the kind of stimulus one certainly can use when advancing their education. For more information, check with a tax expert, a financial aid officer or go to the IRS website and look up American Opportunity Credit.

Your college degrees is something that can change one’s life. Getting there takes a bit of time and, of course, money. This refund, in addition to your grants for college opportunities out there, make good financial sense and good planning as the student takes these benefits and uses them for advancement in their lives. If you are interested and would like more information about your online scholarships, check the internet.