A myriad of tax credits, deductions, and savings plans are available to help college students:

• Students in their first two years of college can take advantage of the Hope credit
  
  
• Upper-division students, graduate students, and professionals can use the lifetime learning credit
  
  
• Parents with children or who are students themselves can use more than one Hope credit, but only one lifetime learning credit
  
  
• Taxpayers can take a deduction, up to $4,000, for expenses related to higher education--but only if they opt not to use the education credits
  
  
• Taxpayers can recoup some of the costs of student loan interest (provided they are below a certain income level)

Using these benefits, however, can be confusing. Each of these benefits comes with its own definition of "higher education expenses;" sometimes fees, room, board, books, supplies, and equipment "count" and other times they don't.

The Treasury Department is considering combining these benefits into two credits: one that would be available to lower-division students and the other (a single tax credit for tution and some student loan interest) available to each student in a family.

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