Subsidize College and It Could Be Free
College tuition has skyrocketed over the last couple of decades. While median family income since 2002 has risen only 1.9%, the average annual growth for state college tuition has risen about 8%. For the 2013-2014 academic year, the annual increase dropped to 2.9%. This positive anomaly is good for college students, but it is still higher than the median family income rise by 1%. Families need some way to subsidize college.
Because of this quick rise in college tuition and slow increase in income, a college education is becoming out of reach for many. For those who can still afford college tuition, many are saddled with debt for years after graduation. With youth unemployment hovering around 15%, recent college graduates cannot pay off their student loans as quickly as previous generations. This will make achieving other financial goals, such as marriage, buying a home and having children, more difficult. This is why we want to share ways to have someone or something else subsidize college education.
There are four ways to subsidize college without opening your wallet. Consider these options, along with taking ways to keep college expenses down. We will share ways to keep college expenses down next week.
1. Grants and Scholarships
Grants are usually offered by non-profit organizations and are not always offered for education. Grants are often awarded for medical, sociological and other research. For our purpose, we will talk specifically about education grants.
Scholarships are specifically for education. They typically come with requirements for before and/or after scholarships are issued. These requirements are usually tied to GPAs or taking a specific number of credits each semester.
Grants and scholarships are great options to pursue because rarely do they require repayment by the student. They are offered college and graduate-level education. Sometimes they require an agreement to work for a certain organization or in a certain industry for a specified period of time.
Grants and scholarships offered for education are typically tied to a study or career, such as medicine or teaching, to correct shortages in those fields.
Many different entities offer grants and scholarships and you can apply for and accept as many as you like. It does not hurt to apply for and accept as many grants and scholarships as you can get.
Most grants and scholarships are offered by The Federal Government, State governments, and schools.
Federal grants can be applied for by filling out a FAFSA (Free Application for Federal Student Aid) form. This application covers Pell Grants, Supplemental Educational Opportunity Grants and the Federal TEACH Grant.
Each state offers its own grants and scholarships and has its own requirements and incentives. Information can be found on each state’s Department of Education website.
Institutional grants and scholarships are offered by colleges, corporations and professional groups. The quickest way to learn what is available is to search online. Talking with high school guidance councilors and college admissions offices is another option to learn what is available.
When researching what is available, consider searches outside of your chosen profession or major. Grants and scholarships are offered based on family income, ethnicities, sex and sexual orientation. Grants and scholarships are offered to military families and non-traditional families.
Research thoroughly what is available and ask lots of questions. Apply for and accept as many grants and scholarships as you can. This will go a long way to reducing your out-of-pocket college expenses.
2. Essay Contests
It sounds funny, but there are numerous essay contests that award $500 to $70,000 and more to winners. Essay contests can be for a wide range of topics such as a book or author review, political and social topics, among many other topics. Writing winning essays takes time. The rewards, however, can make the time spent writing an essay worth the investment.
Not only is this a great way to earn money for college, but it is also a great foundation for a future paper and adds to your portfolio.
3. Employer Reimbursement
Many employers offer incentives to their employees and children to cover college tuition. If you or your parent or guardian works for such an employer, contact the human resources or benefits department for details. Reimbursements usually cover up to a certain dollar amount in a given year and do not require repayment. They do typically require meeting certain GPAs, as scholarships do. Both you and the employer receive various tax breaks for this reimbursement. Your employer or an accountant can provide details of the tax impact on you.
4. Tax Credits
Finally, consider applying for education tax credits. These include The American Opportunity Tax Credit, Hope Scholarship Tax Credit, The Lifetime Learning Tax Credit and more. These tax credits offset the taxes you pay in a given year. Requirements to qualify for tax credits are more intricate than the previous recommendations to subsidize college education such as not being considered someone else’s dependent and income limits. Research what is available online and talk with a tax professional about whether you qualify for such credits and how they may impact your taxes.
If you earn or qualify for any of these options to subsidize college, the money you receive can usually be applied to tuition and other qualified higher education expense such as textbooks, room and board, and travel to and from class.
There are numerous ways to get someone or something else to subsidize college. Use the information we provided as a springboard for researching your options and apply for and accept as many options as you can. Who knows? You or your child may end up going to college for free.