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How To Finance Your Study

Aug 17, 2007
You've decided to go back to college to get your degree - that's great, as more career opportunities will likely open up for you, as well as being able to earn more money.

However, to get that degree, you're going to have to spend some considerable money in order to be able to take the courses you need to take and complete.

First, you need to determine how much the courses and supplies you need to take the courses (such as your computer, Internet connection, printer, etc.) will cost, then you need to see how much of it you can afford to pay out-of-pocket. Obviously, the more you can pay yourself, the better, as you want to try to avoid taking out loans to pay for this as much as possible, since you will need to pay that money back or risk ruining your financial credit history. With other cost-of-living expenses you likely have in your life now, adding another one would only be as a last resort, not as a first option.

Check over your current expenses and see if there is anything you can cut back on and/or eliminate - perhaps eliminating cable channels or cable all together to reduce or eliminate your cable bill, eliminating call waiting to reduce your phone bill, not having your shirts and pants ironed as much to reduce your laundry costs, cutting back on utilities and electricity use to reduce those costs, etc. Any bill you can make less expensive or eliminate all together will give you more money to pay for college costs yourself.

If you are pursuing a higher degree in the same field you obtained your bachelor degree in, see if your employer will reimburse you for all or part of your tuition - after all, his/her company will benefit from your higher degree because of your upgraded skills and knowledge, so they would likely be willing to reimburse you to some extent.

While most scholarships and grants apply to high schoolers about to enter college for the first time, there is free money available for "non-traditional" students as well.

You should file the Free Application for Federal Student Aid (FAFSA) to see what federal aid you can attain to help pay for your education.

However, don't stop there; many colleges and universities offer institutional grants and scholarships, including for "non-traditional" students. Some states also offer grants. Also check with your local department of labour for vocational educational grants and opportunities. Finally, make sure you utilize the many free scholarship search engines on the Internet to see what other forms of aid you can apply for.

Even with these measures, it's possible you may still have to take out at least one loan to pay for your education. Graduate students can borrow up to $18,500/year on federal Stafford loans, which carry a relatively low interest rate of 6.8%. Plus, you normally have 10+ years to pay it off. For those who need extra cash, you can get it through the new Graduate Plus Loans, (which debuted in July 2006,) but the interest rates for these types of loans are higher than 6.8%.

If you can plan ahead, you can take advantage of some of the tax-sheltered savings vehicles that are available to younger students and their parents. Section 529 college-savings programs are one example. These allow for tax-deferred investment growth in mutual funds or other investments, with withdrawals being tax-free if they are used for college costs.

Another option is to open up a Roth IRA if you're currently working. Money reflecting your original contributions can be withdrawn tax-free at any time, while earnings can be withdrawn tax-free if the account has been held at least five years, along with certain other conditions being met.

Another option is to withdraw money from your traditional IRA - the withdrawals are taxable, but you can avoid the 10% penalty that normally applies if you use the money for college costs. Another source of funds can come from the Lifetime Learning Credit, a federal tax break that is worth up to $2000/year.

As you can see, there are many sources of cash you can use to fund your return to college. To find out about every resource you can use, you need to research online, as well as through the documentation the college's financial aid office sends you. This will obviously take time. That's why it is important to not just decide to go to college at the last minute and then try to frantically do research on what monetary resources there are so you can afford the cost.

Instead, plan ahead of time - if you plan on going back to college, do so in 6-12 months if at all possible, planning your budget, cutting back on unnecessary expenses, researching all the monetary resources available to you, and preparing to adjust to coursework again. If you do it in this fashion, it will be less stressful on you and your family and will enable you to perform better in your courses.
About the Author
Bryan Wong is the owner of www.OneStopEducationSearch.com, a website that provides you a unique one-stop-search-service and high quality articles. Visit www.OneStopEducationSearch.com for great tips. Visit our giftshop and get an ebook on Time Management just for stopping by.
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