Returning to college: How adults can pay for advanced degrees
Thursday, 7 May 2015
Craving a return to college to get an advanced degree? You're not alone.
There are over 4 million college-level students aged 35 and older in the United States today, according to the National Center for Education Statistics. However, paying for an advanced degree at this age can be tricky, and if you're not lucky enough to have access to employer-sponsored assistance programs through your job, your mind could be racing. Where is all the money going to come from?
But don't fret–funding that advanced degree might not so far out of reach. It's time for some myth-busting, and there are plenty of resources to help you get back on track to furthering your career.
Let's look at some of the ways to raise money for your advanced degree.
Federal and state student aid
Do you think that federal student aid is only for kids just out of high school? It's a complete myth–there is actually no age limit on who can receive it. Another common myth about financial aid at the graduate and professional degree level is that you'll need your parents' income information included on your application. Not true–the U.S. Department of Education reports that in nearly all cases, graduate and professional degree students are considered independent adults–which means no reporting of parental income.
And if you think the federal student aid application takes too long complete, that's another misconception. The application clocks in at a modest 17 minutes–which means you'll probably spend more time this week in line for coffee than completing the application.
While true financial need is still a factor, you won't know if you qualify until after you apply. You can learn more about the types of federal financial aid programs available to graduate and professional degree students–such as grants, loans, and where to begin looking–from the U.S. Department of Education's website. If you're curious about state-level grants–which unlike student loans, do not have to be repaid–start searching for programs in your state at the Open Education Database. They have resources for graduate school grants, as well as programs for those pursuing a master's degree.
Non-traditional funding sources
Returning to school as a working adult has its benefits. Namely, you may have a few more financial assets than you did when you were younger. From homes with equity to retirement plans and some simple advanced planning, it's easier than you might think to look around and see where tuition money might be hiding. If federal and state-level financial aid won't get you all the way to financing your advanced degree, here are a few funding ideas you can discuss with your bank or financial planner:
- Using your home equity: Between HELOC (home equity lines of credit) and home equity loans, your house might be a smart source of funding for your degree. A professional can help by reviewing your home's value, and the varying programs that can help you leverage your home's equity to further your education.
- Retirement plans: If you've been diligent about funding your retirement plans as a working adult, there are ways to use them for expenses at accredited colleges and universities. IRAs can often be eligible for penalty-free distributions when they're used to fund higher education–though you will likely have to pay taxes on the withdrawals. Other plans like 401(k)s can have options to take out loans, leaving you borrowing from yourself instead of Uncle Sam. Speak to your financial planner about what it means to tap into your retirement, and any tax obligations these strategies might incur.
- Planning ahead: Before you begin studying for that GMAT, why not get a jump on your advanced degree plans with some old-fashioned planning? Socking a little money away from each paycheck can put you miles ahead even before you've received your first acceptance letter. Contact your bank for automatic savings plan options. This way, you can schedule a regular amount on each payday to be transferred into a savings account earmarked for your tuition and expenses. Before you know it, you just might find yourself able to complete your degree with little to no debt, timing your savings with your course load.
Don't forget school resources
You likely have a shortlist of institutions–whether online or in-residence programs–where you'd like to earn that advanced degree. Don't forget to tap into resources at your schools of choice in order to shop for the best financial aid package. Many schools offer assistance programs ranging from scholarships to work-study to installment plans that make paying for your advanced degree easier than ever. Contact the admissions office at each school you're considering, and ask to speak with someone about financial aid and payment plans for your degree. It'd be a shame to leave money on the table and find out from a fellow executive MBA student that they scored a scholarship you didn't even know existed.
Suddenly that advanced degree is looking more and more feasible, isn't it? Even if your employer doesn't offer assistance, there are plenty of resources to make that degree more possible than ever–the money is out there. And hopefully, you're realizing that the funds you need to launch your career into the stratosphere are well within your reach.
The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial consultant about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.
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