Strategies For Non-Traditional Students Part II
(Continued from 1)
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 upon 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.
The Lifetime Learning Tax Credit is worth up to $2,000, is also adjusted based upon 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, for example, 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.
Of course, both tax credits require that you pay "up front" for your educational expenses, then you 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!!
(Editor's Note: For 2013 the Hope Scholarship Credit is not available. However, you may be able to claim the American Opportunity or Lifetime Learning credit. See American Opportunity Credit and Lifetime Learning Credit in the publication Tax Benefits for Education 2013 on the IRS Web site.)
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 percent interest. Your credit union charges 3 percent above the current interest rate for a loan secured by your CD. This means that you will pay a total of 8 percent interest on the loan (5 percent + 3 percent = 8 percent). 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 percent interest on the loan despite the 8 percent 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 percent 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."