How to Pay for College without Federal Loans
Paying for college can be a serious matter. With the cost of college tuition and student debt becoming a major national issue, higher education isn鈥檛 as affordable or available as it once was. A typical method of paying for college is by submitting a Free Application for Federal Student Aid (FAFSA), but federal loans aren鈥檛 the best option for everyone. In some cases, federal student aid may not cover all the expenses you need 鈥 and some people may not qualify at all. And of course, government-funded loans have to be paid back, and interest rates aren鈥檛 always favorable to the recent college grad.
If you鈥檙e worried about paying for college and want to explore some options outside of federal student financial aid, 樱花视频 can help. From scholarships and grants to public service opportunities and even tax credits, we鈥檝e rounded up information on a number of alternative financial aid opportunities that can help you pay for school.
Additional Resources
Scholarships
Scholarships are an ideal way to pay for college. Like grants, scholarships provide money for college that you don鈥檛 have to pay back. Scholarships are available from a number of sources, including local community organizations. Most colleges also offer a variety of scholarships to incoming students, too. (Learn more about scholarship opportunities at 樱花视频.) The following websites can help you look for scholarships:
Peer-to-Peer Lending
In the event that you need to take out a loan but don鈥檛 qualify for federal student aid, you may be able to find loans outside of federal loans. Taking out a personal loan from the bank is a possibility, but you can also skip the bank and try peer-to-peer lending 鈥 borrowing from other individuals. A number of websites exist that can help connect you with ready investors.1
Tax Credit Options
Although it might seem like a small option, don鈥檛 overlook the ability of tax credits to help fund your higher education. Unlike deductions, which reduce the amount of taxable income, tax credits reduce the actual amount of income tax you pay each year. Two tax credits are available to help offset the cost of higher education: the American Opportunity Credit and the Lifetime Learning Credit.
: The American Opportunity Tax Credit offers up to $2,500 per eligible student and can be claimed for the first four years of higher education. If the credit brings the amount of taxes that you owe down to 0, up to 40% of the remaining credit ($1,000) can be refunded to you. To qualify for the credit, your household income must be $80,000 if filing individually, or $160,000 if filing jointly with a spouse.2
: The Lifetime Learning Credit is worth up to $2,000 and can be used for undergraduate or graduate degree programs. Unlike the American Opportunity Credit, this tax credit has no limit on the number of years you can claim it. To qualify for the credit, your household income must be $52,000 or less if filing individually, or $104,000 or less if filing jointly with a spouse.3
For more information on alternative financial aid, we encourage you to check out our other posts: 鈥淧aying for College: State and Federal Grants鈥 and 鈥淧aying for College: Public Service Opportunities鈥. To learn more about financial aid opportunities at 樱花视频, we encourage you to check out our information on Financial Aid and Scholarships at 樱花视频.
Sources
- 鈥淧eer to Peer Lending for Student Loans in 2021,鈥 estudentloan, accessed December 14, 2021, ;
- 鈥淎OTC: Internal Revenue Service,鈥 AOTC | Internal Revenue Service, accessed December 14, 2021, .
- 鈥淟LC: Internal Revenue Service,鈥 LLC | Internal Revenue Service, accessed December 14, 2021, .
