If you are confused about how you pay for college, here are six strategies from AARP, to make a smart plan to navigate the financial decisions needed to get a college degree.
Parents, Keep Your Nest Egg
Parents should not divert contributions that should be going to a 401(k),IRA, or other savings tool to a kid’s education costs. There are no loans available to fund retirement, and you don’t want to risk having to delay or re-plan your retirement or become a financial burden to kids.
There are many resources available to find eligible scholarship opportunities. College financial aid offices can make recommendations, and there is also a slew of websites such as FinAid.org, FastWeb, and CollegeBoard.
Loans can help fill in the funding gap and there are a variety of government-backed and private educational loans available, but the rates and terms can vary greatly so be sure to do your homework so you can get the best deal available. Also be sure to take out the minimum amount you will need to cover costs.
Start at a Community College
Community colleges are less expensive and are more affordable for students to get their core classes completed without paying the hefty price tag of a four-year university. Students will save money and still receive the degree from the traditional four-year school.
Work at the College
Many colleges offer work/study programs that offer flexible work schedules to help students make ends meet. The added responsibly will improve both financial and time management skills.
Take Advantage of Every Tax Break
The IRS allows course materials up to $2,500 on the first $4,000 of educational expenses to be written off under the American Opportunity Tax Credit. The credit can be claimed for four years of undergrad for people with incomes less than 90,000 or less for single tax filers and $180,000 or less for joint filers.
With college tuition steadily on the rise and quickly outpacing inflation, students and their families are faced with the massive and complex task of figuring out how to fund a college education. Here are nine tips to help navigate the financial decisions.