A college degree has become a necessity for most working Americans aiming for a comfortable lifestyle. In fact, a bachelor's degree is worth close to $3 million in wages over a lifetime, according to a study by the Georgetown University Center on Education and the Workforce. The question is how to get one without being crushed under a mountain of student debt. Here are some ways to find grants, scholarships, and other tuition benefits that will pay you, or at least repay you, for earning a degree.
- Money for college is available from many sources, particularly the federal government's student financial aid programs.
- You may also be eligible for financial assistance from your employer or as a military veteran.
- Scholarships and grants represent "free" money, while loans eventually have to be paid back.
Corporate Tuition Reimbursement
If your employer offers tuition reimbursement as part of its benefits package, taking advantage of this perk can be a straightforward way to get paid to go to school.
Tuition reimbursement policies vary. Some employers pay for any degree, while others pay only for education related to their lines of business. Many place annual limits on how much tuition they will reimburse or require employees to maintain a certain grade point average to qualify.
If you are looking for a job but hope to go to school in the near future, check out prospective employers' education benefits as part of your job search.
As an added benefit, if your employer has an educational assistance program that qualifies under IRS rules, the first $5,250 you receive is not counted as taxable income. Anything beyond that, however, is taxable.
Military Tuition Benefits
Higher education benefits and on-the-job training are among the appeals of service in the U.S. military.
These are some of the benefits available as of 2020:
- Military Tuition Assistance. This program pays up $4,500 per year for eligible recipients. That can include tuition, required fees, books, and course materials. Each branch of the military has its own application form and rules.
- The GI Bill. Since its implementation at the end of World War II, the GI Bill has undergone several revisions. Depending on when they served, service members and veterans may have their choice of either the Montgomery GI Bill [which comes in different forms for active duty military members (MGIB-AD) and reservists (MGIB-SR)] or the Post-9/11 GI Bill. Both provide up to 36 months of educational assistance, but they differ in other respects, including how much they pay. The MGIB-AD, for example, will pay full-time students up to $2,050 a month for the 2020 academic year, while the Post-9/11 GI Bill will cover full tuition and fees for in-state students at public colleges and universities and up to $25,162.14 a year at private ones. These payment rates are set by Congress and can change from year to year. The U.S. Department of Veterans Affairs offers a useful Comparison Chart and Payment Rates on its website.
- Survivors' and Dependents' Educational Assistance. This program, which is administered by the Department of Veterans Affairs, provides college funding and other aid to the dependents of some veterans.
Those are not the only benefits you might be eligible for. The U.S. government website USA.gov has this list of "Education Benefits for Service Members, Veterans, and Their Families."
College Financial Assistance
Most colleges and universities have financial aid programs, and in some instances they may cover up to 100% of your costs.
Although public universities have lower tuition rates, some private and liberal arts schools with hefty endowments offer more generous financial aid packages. Princeton University, for example, is one of a very few schools that pays with grants (not loans) the full need of all admitted undergraduate students who require financial aid. It's worth checking any school you're interested in to see what its policies are.
To qualify for need-based grants and scholarships for college, you'll need to fill out the federal government's Free Application for Federal Student Aid (FAFSA). Based on your income, assets, and other factors, it will compute how much you should be able to pay for college using your own resources.
Colleges will then determine how much aid you'll be eligible for, in the form of grants, scholarships, loans, and paid work-study jobs. Grants and scholarships are money that you will never have to pay back, in most instances. Loans will eventually have to be repaid. State, local, and private scholarship programs may also use the information on your FAFSA in determining your eligibility, although some require that you fill out a separate application.
Community College Education
If you're considering going for a two-year associate degree at a community college, you may be able to get a grant to cover all or much of your tuition simply by submitting a FAFSA form each year.
The most commonly awarded grant is the federal Pell Grant, which provides up to $6,345 to full-time students as of the 2020-2021 school year. While Pell Grants aren't limited to community colleges, they can cover the cost of full-time enrollment in most community college degree programs (while barely making a dent in many four-year programs). Qualifying students who work and attend community college part-time may be eligible to receive Pell Grant money on a prorated basis.
In recent years, some cities and states have made tuition free for local residents at their community colleges, and some politicians have called for extending that nationally. In the meantime, it's worth a call to your nearest community college to find out what, if anything, it currently charges.
Merit and Minority Scholarships and Grants
Many colleges offer merit scholarships to attract desirable students. They may also have scholarships or grants for athletes or other students with special talents. Scholarships and grants may also be awarded to students who are members of minority groups that are underrepresented in college. Full ride scholarships are very rare, but this kind of aid can help defray a good portion of college costs.
The best place to find out about grants and scholarships is through a high school or college counselor or other resources provided by your school.
You can also conduct your own research using websites such as CareerOneStop, sponsored by the U.S. Department of Labor. That site has a wealth of information about professional apprenticeships, certifications, and internships, as well as college aid programs. Your state's higher education agency website could also be useful.
The federal government and many states offer tax credits or deductions to cover a portion of your college costs.
Tax Breaks for College
If you end up having to pay to attend college, you may get at least some of that money back through tax breaks. On the federal level, there is the American Opportunity Tax Credit (AOTC), worth up to $2,500, and the Lifetime Learning Credit (LLC), worth up to $2,000. Student loan interest of up to $2,500 is deductible as an adjustment to income, regardless of whether you itemize your deductions.
Your state may also offer some form of tax deduction or credit.
A Word of Warning
Be skeptical of companies or websites that promise to help you find scholarship money in return for a fee. Many are outright scams, and few can do anything for you that you couldn't do yourself—for free.