How to Pay for Your Education – Part 2 of Returning to School

November 24, 2014

Ages and Stages

moneyPart 1 explored how returning to school can help you advance in the work you already do or launch a new career. Part II will complete the planning cycle and address how to overcome external barriers, mainly financing the education expenses while supporting yourself/your family.

Let’s say that you have already chosen an exciting new career path, and discovered that you need more training or education to qualify. Taking in to account the present circumstances of both you and your family, you have considered the impact of becoming a student again, and identified potential programs of study. Whether you are aiming to complete a certificate, an Associate’s Degree with two years of college, a Bachelor’s Degree with four, or graduate school, a huge step is figuring out how to pay for it. You have to consider more than tuition: books, fees, and enough money to live on (and possibly support others) for at least the length of your program plus time after you graduate while you job search in your new field. Also, in some careers you may need to earn a post-graduation license. It might take a few months after completion, in the case of a Certified Medical Assistant, or more than ten years. In careers like medicine or architecture, graduates earn some pay during years of residency, internships, or the process of Board Certification. All this can be overwhelming. In addition to sound financial advice, this is the time to get relentlessly curious and look for creative ways to piece it all together. Regardless of whether you already have debt or not, first look for ways to avoid borrowing.

HOW TO PAY FOR SCHOOL

  1. Maintain or adapt your present job. A recent U.S. News article about paying for graduate school offers ideas that would work for returning to school at any degree level. Let’s start with your employer. If you are currently working, is your schedule flexible enough to accommodate attending classes, or would you need a different, perhaps part time or home-based job? One of my graduate student clients found that the nature of her on-call job was too stressful to continue while in school. One of her classmates already had a fairly undemanding receptionist job full time, and both of them needed some daytime hours free for their internships. Now they are job sharing at the office, and my client is earning enough to support herself while having a predictable schedule. She has lowered her stress and the total amount she will borrow.
  1. Tuition Reimbursement. Another work-related option is finding out through HR whether your employer has a tuition reimbursement program. There may be some strings attached: you may need to demonstrate that your courses are related to enhancing your skills at your current job. Even if that’s not a requirement, the employer who offers help with tuition may ask for a time commitment from you upon graduation. One Portland area hospital has offered any employee a low interest way to become trained in a variety of medical occupations. In exchange, employees agreed to keep working for the institution in their new roles, and gradually pay back the tuition by small deductions from each paycheck. Some hospital employees studying nursing may qualify for scholarships, which don’t have to be repaid.
  1. Depending on what you study, there may be scholarships awarded directly to your program, which means you should check with the Financial Aid office and a program advisor from your own department. You may have to dig, and applying for early admission may be to your advantage when it comes to scholarships based on merit. A website called FinAid will lead you to other links to match your background and goals with available funds. Also check outhttp://www.fastweb.com/college-scholarships. There are scholarships for average students as well as brilliant and/or athletic students. FinAid offers tips on winning scholarships, how to spot a scam, tax questions, and unusual scholarships. Some involve duct tape, wool, the NRA, mushrooms, certain surnames, community service, twins, and wine. I am not making this up.
  1. Work-Study Jobs. Another source of funds is to work for the school. Options include campus work/study jobs, assisting an instructor in your department, tutoring other students, paid internships, fellowships, bookstore, library, grounds, or food service – check out employment offered only to students. I worked as an academic research assistant in the department where I majored in college, and managed to get paid (sort of) for an on-campus internship in graduate school. That internship gave me much more experience than I would have gained otherwise, plus an important contact for my first post-graduate counseling position.
  1. You may have to consider taking out a loan. It pays to do your homework in order to find the lowest interest rate possible. You will be far better off taking out a federal loan rather than a private loan or living off of your credit card. The first step is to complete a FAFSA, a Free Application for Federal Student Aid, which you can learn about in another recent article from U.S. NewsFinAid can be a place to begin learning the language and acronyms of loans, comparing loans and repayment options and interest, deadlines, and many other factors you should consider now about how this may impact you in the future. Yes, it is scary to take on debt, and you will have to repay loans whether or not you graduate or get a better job. Yet it is very possible that in the long run you will be far ahead by borrowing now and qualifying later for a much better paying job than would have been open to you without the education. As I mentioned in Returning to School, Part One: 4 Myths, earlier this year a report by the Federal Reserve stated that a college education is worth $830,000 more than a high school diploma.
  1. Tax write-offs. A final area to consider, and a good reason to consult a financial advisor, is the federal Lifetime Learning Tax Credit, which allows individuals to subtract up to $2,000 annually from their tax bill. It’s complicated, and there are other tax breaks and refunds to learn about, depending on which way you decide to borrow.

It may be hard to imagine now how many tangible and intangible benefits will unfold in life if you make an informed choice about going ahead with a career that includes more education. Dedicating your time and energy (as well as money) to this goal is investing in enriching your life and your family’s well-being far in to the future.

 

Anne Bryant, MA
abccounseling@pobox.com
503-442-6392

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