Three things people look to when they're trying to pony up for tuition are grants, loans and family savings. It's hard to find a lot of money these days in the bank, so that's now always a help for some people. While many scholarships are available, some are actually harder to get than loans (which we'll cover in another article). Finally, as complaints about some for-profit schools illustrate the problem with loans that carry through even if you declare bankruptcy. All is not lost, though, because there are a number of options to help defray costs.
Getting Help from Uncle Sam: Tax Breaks
When you declare your income tax, you get a standard deduction and a personal exemption. You can also use your tax form to deduct the costs of tuition and related fees. This is particularly useful because any courses that you take to improve career prospects can count, meaning that certificate programs and continuing education are open for this savings.
There are a few things to keep in mind. For some of these credits, you may need to have a certain income level. You may also need to supply evidence of work that benefits from the education, such as invoices for resumes if you took a career coach certification course. The other is that the savings may not be as much as you think. You're only deducting the income, so the savings is that amount times your effective tax rate. On the other hand, it can be significant if you move to a lower tax bracket as a result.
Loans Are Forever, but You Can Change the Terms
Banks tend to focus on one thing: getting their money back. Just like you can re-negotiate the ridiculous fees on cable and internet bills, you can also work with your bank to get on track with payments that actually fit your budget. You want to keep a copy of a recent W-2 or income tax return to help justify this.
In addition, there are other, somewhat more common options. One is a deferment program. If you just graduated from school, you'll likely receive a several-month grace period where you don't have to pay any money. You may be able to get this extended, for example, if you have a temp-to-perm job and a note from the employer. The government also provides deferments for members of the Peace Corps and similar programs.
A slightly more expensive proposition is forbearance. It's sort of like some mortgages, where you pay the interest, rather than the principal or money borrowed. Keep in mind that this is the basic equivalent of only paying the minimum monthly payment on a credit card, so you'll want to get back to a normal payment schedule when possible.
Data on U.S. Public High Schools & Private High Schools
Data provided by the National Center for Education Statistics. The data displayed is compiled from the most recent sources available. For public schools this is the 2012-2013 school year. For private schools this is the 2011-2012 school year.
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