A number of Internal Revenue Service (IRS) programs provide assistance in reducing the cost of a college education.
American Opportunity Credit
The American Opportunity Credit is a nonrefundable credit against a family's federal income taxes. The credit may be claimed for those payments of tuition and related expenses.
Lifetime Learning Tax Credit
The Lifetime Learning Tax Credit applies to qualified tuition and related expense payments.
Coverdell Education Savings Accounts (CESA)
This incentive applies to education IRA's. A taxpayer may deposit amounts up to $2000 annually in to a (CESA). The contributions must be for a child under age eighteen. Other family members may also contribute to the (CESA), but the total contributions cannot be higher than $2000.