Article By: Laura DiFiore
Founder of FreSch!, a leading free scholarship search and information
website
and respected scholarship expert and judge.
Continued from Part I
4. Check With Your Employer
Many employers offer tuition
reimbursement programs, refunding a portion of tuition costs. Most programs base
the amount they refund on your grades - the better the grade, the more they
refund you. And while most will only pay for classes that directly relate to
your job, they are still a valuable resource.
Some employers offer
scholarships for employees. Ask your human resources department.
Does
your employer offer a "cafeteria" plan of benefits? Negotiate one benefit for
another. Perhaps trade sick days for tuition reimbursement?
Even if your
employer does not offer any educational benefits, ask for help. Emphasize how
your value to the company will increase when you improve your skills and
education. Your employer may never have thought about educational benefits. Ask
and get them thinking about it!
5. Learn About Federal Income Tax
Credits for Education
The Hope Scholarship is a tax credit worth up
to $1,500. The credit is based on how much you spend on education and how much
you earn. The more you earn, the less you get. You can only use the Hope
Scholarship credit for two years. Read more about the Hope Scholarship Tax
Credit from the IRS
website.
The Lifetime Learning Tax Credit is worth up to $2,000, is
also adjusted based on your income, and cannot be claimed in the same year that
the Hope Scholarship Tax Credit is used. Unlike the Hope Scholarship Credit,
there is no limit to the number of years in which a Lifetime Learning Credit may
be claimed for each student. Thus, an individual who enrolls in one
college-level class every year would be able to claim the Lifetime Learning
Credit for an unlimited number of years, provided the individual meets the
income limits and is taking the classes at institutions that meet the
eligibility requirements. Read more about the Lifetime Learning Tax Credit from
the IRS website.
Of course,
both tax credits require that you pay up front for your educational expenses,
then get reimbursed on your taxes for approved educational expenses. Be aware
that you can now claim part of the interest you pay on your student loans on
your tax returns.
6. Consider Home Equity Loans
Interest
paid on home equity loans might be tax deductible. Personally, I would not use a
home equity loan to fund my education because the risk of losing my home is too
high for my comfort level. However, many students have used the equity in their
homes quite successfully, especially at today's low interest rates. This is
something to look into carefully. Weigh all the pros and cons.
7.
Consider A Secured Loan Against Existing Savings or Other Assets
Some
banks and most credit unions will allow you to take out a loan against existing
savings accounts, bonds, CDs, IRAs, money-market accounts, etc. The major
benefits are:
- Very low overall interest rate. For example, you have $3,000 in a
money-market CD account paying 5% interest. Your credit union charges 3% above
the current interest rate for a loan secured by your CD. This means that you
will pay a total of 8% interest on the loan (5% + 3% = 8%). But your CD is still
earning interest while you are paying off the loan! While thanks to the
complexities of compounding interest, it can be hard to figure out your exact
overall rate, you will be actually paying slightly above 3% interest on the loan
despite the 8% rate. Your savings will still be there when you pay off the loan.
With interest. You don't kill your savings.
- Very low risk for the bank means it’s generally easy to have the loan
approved. This could be a particularly good idea to look into if your only
assets are retirement savings or retirement IRAs. By using the retirement
account (such as an IRA) as security, you do not deplete retirement savings that
you have worked so hard for, and you won't have to worry about paying early
withdrawal penalties!
- The one big negative: You have to make payments while in school. And of
course, you need to have assets (savings, CD, etc.) to use as
security.
8. Consider Scholarships
Obviously, I
am a big fan of scholarships. I've spent the last three years of my life devoted
to them. But I am also a realist. Scholarships are highly competitive and
difficult to win even if you are the best of students. The difficulty is
increased when you are an older student. There is a certain belief that older
students should be able to take care of their own educational expenses. While
this belief is quite unrealistic, it does exist.
The bad news: Most
scholarships are for full-time students attending four year colleges, not
part-time students attending two year colleges, which is a large portion of
non-traditional students.
Unfortunately, many scholarship committees have a
bias towards the traditional high school senior. They simply do not know how to
judge a lifetime of experience compared to a really good SAT score!
And,
regardless of your age, 18 or 80, scholarships rarely, if ever, cover 100% of
your costs.
The good news: As an older student, you have one very
distinct advantage: You have real-life, real-world experiences to draw upon, to
find strength from, to write essays about, and to share with other students. You
have earned your confidence and determination the hard way: through your life's
experiences. Draw on your life experiences when applying for scholarships,
college, or even jobs.
Most scholarships don't have restrictions against
older students. Of course, they don't make this obvious on the application form
either. If the application does not say anything about age requirements, go for
it! Just because the application doesn't specifically say they accept
non-traditional students doesn't mean you can't apply.
Many scholarship
organizations are recognizing that more than 30% of students are now older
students and are starting to create scholarships specifically for
non-traditional students.
Many scholarships consider work experience -
look for those! The same is true for community service and essay-based
scholarships. They rarely have any age restrictions, and often welcome older
applicants.
If you have been out of school for more than a couple of
years, you should be able to increase your odds of winning a scholarship if you
wait until after you have already completed a semester or two before you apply.
This way you have recent academic achievement information for your applications
to show how worthy a student you are, despite your age!
Please do not be
discouraged or think that I'm being negative by what I have written above.
Instead, take it as a personal challenge. By being aware of the difficulties up
front, you are better prepared for the challenges that lie ahead of you. Just
remember, you are not alone. Millions of students have found a way to pay for
college; many have won scholarships. Just be prepared for a lot of hard
work.
Cere in Tacoma, Washington shares her experience:
"One thing I
am concerned with is that some students might get the message that if you don't
have a really high grade point average don't bother. I am a single parent going
to school full time and can only manage to hold a 3.45 GPA. I have been lucky so
far though and have received $3,500 in scholarships so I know that not having a
perfect grade point won't hold you back from winning all the time."
Continued in Part III
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