How Will You Pay for College?

 With summer more than half over, many families are trying to figure out where they’ll get the money to pay the college tuition bill next month. If you don’t have the money the pay it outright, there are other options to consider.

Scholarships.com
Scholarships.com is the largest free and independent college scholarship search and financial aid information resource on the Internet and is recognized by thousands of high schools, colleges, and universities nationwide. This site assists students and their families in not only finding college scholarships, but helping them explore valuable financial aid opportunities they may not have discovered otherwise.

Student loans
There are two types of government issued student loans. Subsidized loans are for students who demonstrate a financial need. Interest does not accrue while students are in school at least half-time. Unsubsidized loans don’t require student to demonstrate financial need, and interest begins accruing as soon as the loan is issued. The college reviews the loan application and determines the amount the student can borrow. Student loans are a good choice, because they have a low interest rate and are in the student’s name.

Parent loans
Parents may apply for a PLUS loan to help pay for a child’s education if the child is still considered a dependent. These are also low interest loans, but certain eligibility requirements must be met. Click the link for complete details.

Home Equity Loans
If you own your home and have been living there for quite some time, you may have equity that you can borrow against to fund a college education. When you get your loan at Neighborhood, you can choose between a Home Equity Loan and Home Equity Line of Credit.

Retirement Funds
Drawing on retirement funds to pay for education expenses is generally frowned upon because it depletes your retirement income, but it’s doable. When an IRA withdrawal is used to pay for qualified education expenses, the money is exempt from the 10% early distribution penalty usually incurred on withdrawals before age 59½. However, you may be subject to higher income taxes when you withdraw education funds from a traditional IRA, because withdrawals count as income. Withdrawals can be used for tuition and fees, as well as room and board or other supplies.

The prospect of paying a big tuition bill can be frightening. Hopefully these resources will lead you in the right direction.