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When you look at the education expenses, no doubt you start wondering if it is all worth it. At any four year public colleges, the tuition fee can touch $8000 for instate students. Private four year institutions charge a massive amount of $35,000 or more. These amounts are just the tuition fees and do not include cost of room and other expenses.

Thankfully, opportunity to bring down out of pocket education costs is made possible today by the tax laws. You just need to know how to make the most of them.

The AOC or American Opportunity Credit was last year voted to be extended by the Congress. This opportunity can be used by taxpayers. At least for two years, they can significantly reduce their tax burdens.

For qualified expenses including tuition during post secondary education’s first four years, students could qualify for this credit for up to $2500 per year since 2009. Apart from school fees, this credit covers course materials such as equipment, supplies and note book. In order to qualify for this credit, you must be enrolled for at least half time.

Lifetime learning credit offers up to $2000 worth expense per year for students who qualify. This credit covers any number of years and is also offered for students who attend courses that do not lead to a degree and part time school. This credit again is based on income limits.

Students who are saddled with a heavy debt load to finance their education can benefit from the tax advantages on scholarships and loans. Here it is possible to deduct to the tune of $2500 interest on the student loam.

In order to be eligible for this, proceeds from the loans must have been used for specific expenses like housing and board, tuition, supplies, books, fees and transportation.
 
Another great opportunity for students who receive fellowship or scholarship is the fact that if they are a degree candidate, this amount is not taxable. The money saved can be used towards qualified expenses at the college.

If you are being sponsored by your employer for your education either in part or full, federal income taxes are not applicable for the first $5,250 they ante up each year. The money thus saved can be utilized for either under graduate or graduate courses. Even if the course you opt for is not work related, this money is not taxable. Expenses that qualify include fees, supplies, books and equipment.
 
Another way to save money on taxes is through the US savings bonds. This is one of the most popular gifts that help students offset their college education costs. There are thus numerous ways that can help lower skyrocketing costs of higher education.

In order to take advantage of these opportunities, it is recommended to take the advice of your local CPA who can help address all your related financial concerns. Education is today a most expensive preposition. If you can save a few dollars here and there, why not?