Aid Step 5: Financial Aid Options

— Other Aid Options —

 

State529 Plans:

• These programs are often referred to as "529 Plans"
  
  Savings programs established and administered by States for the purpose of setting aside savings for "qualified higher education expenses".
  
  
  
• A family member setups and makes contributions to a fund
  
  with one of the States that sponsors 529 College Prepaid Tuition and/or Savings Plans.
  
  Accumulated funds can be used to pay for qualified college.
  
  see our State529 center at SayPlanning.com for detail information and program benefits
  
  

 

Education IRAs

• EIRAs allow family members to setup an custodial account in the name of a beneficiary
  
  who will withdraw funds for the purposes of paying qualified higher education expenses.
  
  The Education IRAs (EIRA) are investment instruments for higher education. The official name for education IRAs is:
  
  Coverdell Education Savings Accounts (CESA)
  
  see our State529 center at SayPlanning.com for detail information and program benefits
  
  

 

IRA Withdrawals

• you can make withdrawals from your IRAs for qualified higher education expenses
  
  without having to pay the 10% additional tax.
  
  you will owe income tax on at least part of the amount withdrawn, but you will not have to pay the 10% additional tax on early withdrawals.
  
  More information from the IRS web site: http://www.irs.gov/...

Eligible Tax Credits for Higher Education

the IRS allows students and parents who file and owe taxes to claim one of two educational credits

tax credits reduce your overall taxes paid dollar-for-dollar

1: Hope Tax Credit

• Provides for a maximum $1500 per year per dependent student
  
  is available only for the first two years of post secondary education
  
  student must be enrolled at least 1/2 of the full-time workload in a program that leads to a degree, certificate or other educational credential
  
  
• Credit can only be taken for expenses covering tuition, fees, and and books
  
  (if the book expense was paid to the institution on condition of enrollment) minus any scholarships and grants received. Room and board, personal expenses and transportation are non-eligible expenses
  
  some restriction apply — view the IRS topic for more information: www.irs.gov/...pubs
  
  

 

2: Lifetime Learning Tax Credit

• Provides for a maximum $1000 per year per family
  
  is available for any year of post secondary education including graduate work
  
  student must be enrolled at an eligible educational institution
  
  
• Credit can only be taken for expenses covering tuition, fees, and and books
  
  (if the book expense was paid to the institution on condition of enrollment) minus any scholarships and grants received. Room and board, personal expenses and transportation are non-eligible expenses
  
  some restriction apply — view the IRS topic for more information:
  www.irs.gov/...pubs

Other Special Assistance
there may be other education benefits based on your family affiliation with the following agencies:

 

Veterans Benefits:

• Department of Veterans Affairs (VA) offers several programs administered by its Education Services.
  
  aid is available for veterans, reservists, National Guard persons, widows, and orphans.
  
  
• programs detailed on the VA Education Service Web site include the Montgomery GI Bill (for Active and Selected Reserves personnel), Veterans Educational Assistance Program, Survivors' and Dependents' Educational Assistance Program, Work-Study, and Tutorial Assistance:
  
  www.gibill.va.gov/
  
  

Americorps:

• service program administered by the Corporation for National and Community Service.
  
  AmeriCorps allows people of all ages and backgrounds to earn help paying for education in exchange for a year of service:
  
  www.americorps.org
  
  

Loan Forgiveness:

• volunteer for public service after college and have some of your student loan debt forgiven
  
  programs include:
  AmeriCorps
  www.americorps.org
  
  Peace Corps
  www.peacecorps.gov
  
  Volunteers in Service to America (VISTA)
  www.friendsofvista.org
  
  

U.S. Public Health Service:

• variety of loans, scholarships, and faculty loan repayment programs available for students in the health professions.
  
  help in several areas, including dentistry, public health, optometry, and veterinary medicine:
  
  www.hrsa.dhhs.gov
  
  

Job Training Partnership Act:

• Department of Labor program of tuition and free assistance for job training for the economically disadvantaged, dislocated workers, and others facing employment barriers:
  
  www.doleta.gov