8 Things That May Help You Pay for College
Whether you’re a parent trying to figure out how to pay for college or a student looking for ways to finance your education, figuring out what route to take can be challenging. In reality, most people will use more than one resource to pay for their tuition, books, and other expenses. Let’s look at the options—here are eight things that may help you pay for college:
Research Scholarships and Grants – Applying for scholarships and grants can be a great way to reduce the overall cost of college. These awards do not need to be repaid, so they can really help defray the costs of tuition and other expenses associated with attending school. Some schools even offer merit-based scholarships to prospective students after they’re accepted.
Apply for Loans – Know your loan options. Depending on your situation, you may qualify for federal subsidized or unsubsidized loans, which typically offer lower interest rates than private loans and other perks such as forbearance and income-driven repayment plans. Private lenders also have loan options that can help with tuition expenses. Remember, it’s important to understand the terms and conditions of any loan before committing.
Take Advantage of Tax Benefits – There are several tax credits, deductions, and other incentives that can help with the burden of paying for college. Consult with a tax professional to find out more.
Use tax-advantaged college savings plans – Tax-advantaged college savings plans, like 529 plans and Coverdell Education Savings Accounts, can be used to pay for college-related costs. Both accounts offer tax advantages when the money is used to cover qualifying educational expenses.
Tap into your savings – Many families use a portion of their savings in combination with loans and other sources of funding to pay tuition.
Look into financial aid – Need-based financial aid is available to students who qualify. This funding can help pay for college tuition, fees, books, and other costs associated with attending school. Most schools require that you fill out the Free Application for Federal Student Aid (FAFSA®) form to apply for financial aid. Check specific colleges’ websites or contact their financial aid office for more information.
Participate in work-study programs – Work-study programs provide students with the opportunity to work part-time in exchange for financial assistance. This can help cover some of the costs of tuition, housing, and other school-related expenses while the student also gains work experience.
Consider other sources of funding – Some parents choose to look into other sources of funding. For example, they may sell some investments or use the cash value of an existing permanent life insurance policy, such as whole life insurance or universal life insurance.
The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.