About 40 percent of American college students are 25 years of age or older, indicating it is never too late to seek a college degree. In order to pursue that degree as a working adult, you will not only need to find the time, but the financial resources too.

Take heart; where there is a will, there is usually a way. With the help of scholarships, grants, loans and other aid programs working adults can fulfill their dream of earning a college degree, even if they lack the financial means.

Tax Breaks

The American Opportunity Credit covers up to $2,500 of qualified education expenses per year for the first four years of postsecondary education (100 percent of the first $2,000 and 25 percent of the second $2,000).The student must be pursuing an undergraduate degree or some other recognized credential and be enrolled at least half time.

The Lifetime Learning Credit covers up to $2,000 of qualified education expenses (20 percent of the first $10,000). Whereas the American Opportunity Credit is for the first four years of college, the Lifetime Learning Credit, as indicated, can be used through the taxpayer’s lifetime. It is more liberal in its definition of qualified education as it can be used for most education to acquire or improve job skills and is not limited to degree oriented studies.

The Internal Revenue Service (IRS) also offers tax deductions of up to $4,000 for qualified education expenses, and up to $2,500 on student loan interest. Consult a tax adviser or a student aid adviser at the college or institution to which you plan to apply to learn more about eligibility.

Grants and Scholarships

The Federal Pell Grant Program provides need-based grants of up to $5,500 to low-income undergraduates. Pell Grant recipients may also qualify for an Academic Competitiveness Grant and/or a Federal Supplemental Educational Opportunity Grant. Meanwhile, some colleges and universities convert non-federal school loans into non-federal grants if the student remains in school and graduates.

Scholarships “are numerous and can also be quite generous,” said FPA member Joe Pitzl, a financial planner at Intelligent Financial Strategies in Edina, Minn. You can find scholarship information on the Education Department’s website. Also, research scholarships offered by your home state. Additionally, contact the financial aid office at the school you are considering attending for information about specific scholarship and grant programs offered through that school. Some colleges offer bargain tuition rates to older students.


“Seek subsidized loans first because they tend to offer the lowest rates,” said Pitzl. Subsidized and Unsubsidized Stafford Loans are a popular funding vehicle for college students providing up to $12,500 per year at rates ranging from 3.4 to 6.8 percent. Students may also qualify for a low interest Federal Perkins Loan of up to $5,500 per year.

Students who are not eligible for federal funding might qualify for state assistance. Contact the higher education office in your state for information. Keep in mind, some colleges and universities set aside funds for families who do not qualify for federal or state funding. Some employers offer tuition assistance, too.

Private loans, such as a home equity line of credit, are another option for funding college, but should be used judiciously and wisely.

Avoid using credit cards to cover education costs and be cautious about all kinds of student loan debt, advised Pitzl. “Just because they will lend you a certain amount does not mean you should take the full amount, because it could leave you with a pretty hefty debt once you are done with school.”

Using Retirement Funds

The IRS allows individuals to take distributions from an Individual Retirement Account (IRA) for qualified higher education expenses without having to pay the 10 percent tax penalty. However, taking such a distribution is a taxable event and may push you into a higher tax bracket.

Cutting Costs

Your life experiences could earn you college credit at some institutions. Check with that school for further information.

Although the cost of higher education can be daunting, there are several options to help you through the next several years. Knowing where to start is sometime the hardest part. The information above can help you take the correct step towards finding the proper funding for your college dreams.


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