Nearly 100,000 current students at The City University of New York – and many thousands in the future -- are expected to benefit from the permanent extension of the American Opportunity Tax Credit. The credit, worth up to $2,500 a year, eases tuition costs for middle-class students as eligibility for full aid under federal Pell and state Tuition Assistance Program grants decreases with higher income.
   
New York Senator Charles Schumer, who authored the credit in 2009, has said he pushed to make sure the American Opportunity Tax Credit was included in the "must-pass" $1.8 trillion budget package that Congress approved and President Obama signed in mid-December. "With tuition costs continuing to rise, middle-class families should be able to take advantage of any savings they can get, and that is why I pushed to make sure the American Opportunity Tax Credit was included in this must-pass tax package," Schumer has said.
 
CUNY's affordable tuition and high quality academic programs make the federal tax credit an even greater value. Full-time tuition at the four-year colleges is currently $6,330 per year. At the two-year colleges the annual tuition charge is $4,800. More than 66 percent of CUNY's full-time college students attend tuition-free thanks to the availability of federal Pell grants, New York State TAP assistance, tax credits and CUNY aid. More than eight of 10 CUNY graduates leave college with no federal student loan debt.   
 
Schumer reviewed the details of the now-permanent tax credit in a wide-ranging address to the Association for a Better New York on January 7, 2016.
 
CUNY Chancellor James B. Milliken said, "Thanks to Senator Schumer, thousands of our students will continue to qualify for an important benefit that effectively reduces our already low, affordable tuition."
 
Unlike a tax deduction, which reduces the amount of income subject to tax, a tax credit reduces the actual taxes that are owed. The American Opportunity Tax Credit is for families earning less than $180,000, or single-filers earning less than $90,000, a year. At CUNY, in 2014 about 58 percent of undergraduates qualified for Pell grants and 38.5 percent came from families earning less than $20,000 a year, which generally is the cutoff for Pell grants.
 
Schumer estimated that New Yorkers will save more than $1 billion per year with this tax credit, and the U.S. Office of Management and Budget estimated that it provided $15.2 billion in tax relief nationwide in 2015.