How to Pay for Grad School As a Working Adult

A bachelor's degree isn't what it used to be. More and more, employers are searching for candidates with exemplary qualifications. A 2014 CareerBuilder survey revealed that 20% of employers targeted candidates with master's degrees for jobs that previously required a bachelor's. Earning an advanced degree is crucial within various professions, but that doesn't mean it's affordable. If your career is ready for a shake-up, consider these options. They can help you pursue a graduate degree with affordability in mind.

1. Ask your boss

Employers rely on a skilled workforce to succeed, and many are investing directly into their employees' personal growth. One-third of companies surveyed provide tuition reimbursement according to the same CareerBuilder survey, and 81% of those offer at least partial funding.

Asking your boss about education opportunities isn't a bold request, especially if it's framed in terms that benefit the company. Do some research to learn which course of study will enhance your performance on the job, and create a formal presentation to highlight the program's strengths. Most companies will only sanction education expenses that benefit them directly, and this strategy is a great way to show that your perspective is on point.

2. Earn your degree online

Online learning is a valuable option for working adults who can't commit to a full-time course load, and their popularity is gaining traction. In 2015, online degree programs accounted for about 30% of all higher education enrollment, according to a Babson Survey Research Group report. Distance education programs are often more affordable than their brick-and-mortar counterparts, and you won't need to worry about sacrificing time at work, hiring child care, or commuting to and from campus. Some master's programs may even allow you to test out of certain requirements based on your professional experience, which would lower your tuition bill.

Keep in mind that not all online programs are created equal, and it's important to earn an accredited degree that carries weight and financial reward in the workplace. Do your homework to learn which schools have the greatest return on investment (ROI). Reviewing U.S. News's 2017 national ranking report is a great place to start.

3. Get a tax credit

Reducing your tax liability is an effective way to budget while earning a degree. Unlike deductions that lower your taxable income depending on your income bracket, tax credits provide a dollar-for dollar reduction of your income tax liability.For example, if you owe $1,000 when you file your taxes in April, a $1,000 tax credit would eliminate your debt. When it comes to education, there are a couple tax credit options:

  • The Lifetime Learning Credit allows you to claim up to $2,000 of the first $10,000 in annual tuition and enrollment expenses.There is no required course load to qualify for this credit, which means that you can use it even if you're only taking a single class. This tax credit is non-refundable, which means that it can eliminate your tax burden, but you won't receive a refund for the remaining credit amount. 
  • The American Opportunity Credit (AOC) allows you to claim up to $2,000 a year for education expenses, plus 25% of the next $2,000 for a grand total of $2,500. The AOC is limited to four years of schooling, and students must attend classes at least part-time. Qualified expenses include everything from tuition and fees to books, supplies, and course-related equipment. Perhaps the biggest perk is the AOC's refundable status, which allows you to receive 40% of unused tax credits (up to $1,000). For example, if you owe $1,500 in taxes, your AOC would cancel the debt, and you would receive 40% of the remaining $1,000 credit, amounting to $400. 

It's important to note that you may only claim one tax credit per year, and it's a good idea to consider your education-related expenses and enrollment status to make the right decision.

4. Use your employee stock purchase plan 

Employee stock purchase plans (ESPPs) are used by publicly traded companies to attract and retain talent. ESPPs allow participants to purchase stock through payroll deductions at a discounted rate of up to 15%. For instance, if a share of your company's stock costs $100, you would only pay $85. In addition to savings, one of the many perks of an ESPP is flexibility. According to a Fidelity study, employees use their ESPPs for everything from paying down debt to reinvesting in retirement funds, and education is an option as well. If you currently own ESPP shares, consider funneling a portion of your investment into grad school funding. This will help you avoid dipping into emergency savings or your retirement accounts, and the initial stock purchase discount will reduce your own out-of-pocket expenses.

5. Harness your professional strengths

Grad school isn't usually a budget-friendly expense for adult students and their families, and it's worth it to consider saving before pursuing your degree. The good news is, it's easier than ever to find flexible work. An estimated 44 million Americans have joined the gig economy, taking on side jobs to supplement their income, often remotely. In fact, an search for "work at home" jobs returned more than 2,800 active listings. You might even considering applying for a work-study program or teaching assistant (TA) position within your university to offset the costs. For example, Purdue University's School of Industrial Engineering awards tuition waivers to TAs working 10 to 20 hours a week. Create a list of your professional skills and talk to your advisor about on-campus opportunities. Your work experience may give you a competitive edge.

Education is a valuable asset, and it's possible to finance your degree without sacrificing your savings. Take advantage of these opportunities and work with your academic advisor to find additional funding options. Don't miss the chance to cash in on career advancement.

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