College Dreaming? Send Yourself Back to School

By Teresa Stewart

You can find scads of information about saving for a child's education, but what if you or your spouse still hold college dreams? Whether completing a degree, seeking graduate school or setting out on a new path, it is possible to plan, save and avoid potential snares—like amassing a huge amount of debt.

College: Not Just for 18-Year-Olds Anymore

While new high school graduates account for the majority of university student bodies, more and more adults are returning to, or starting college for the first time—and the numbers are projected to increase. Reasons range from launching a second career, to having more time in adulthood to study, to finishing what they started. Whatever the motivation, as with any large expense, it pays to investigate options and plan ahead.

Most adults start attending college about a year after they've made the decision to go. However, as with any goal, the earlier you start saving, the more money you could have to cover expenses.

Count the Costs and Payoffs

Start by calculating how much you may need. If you haven't researched college costs for a while, the sticker price may shock you. Listed below are amounts reported by the College Board for full-time tuition and fees for the 2016-2017 school year.

2-Year Public $3,520
4-Year Public In-State $9,650
4-Year Public Out-of-State $24,930
4-Year Private $33,480

You may not need to include room and board when estimating college expenses, but there are others you might need to consider, such as child care. Costs also depend on your student status—full-time, part-time, online, etc.

Even though expensive, the numbers prove that a college education is still a good investment , with potentially higher wages and lower unemployment rates for graduates.

Paying Your Own Way

As an adult, calling on mom and dad to help pay for college is a less likely possibility. Below are some options to review as you consider how to pay for your, or a spouse's, education.

Open a 529 Plan

Set up a 529 college savings plan* for yourself or your spouse and take advantage of potential tax savings and tax-free growth. Many states  also offer income tax deductions for contributions. Plus, you won't pay taxes on withdrawals for qualified education expenses, such as tuition, books and computers. Even if you don't have much time to save, you can continue adding to a 529 plan while you're in school and reap the tax benefits.

If you don't use all the money, you can change the beneficiary to someone one else such as a child or other family member.

Use a Roth IRA

While we believe retirement should be one of your most important savings goals, you can use a Roth IRA* for higher education and not incur the ten percent tax penalty for withdrawals before age 59½. Withdrawals are also tax-free. Money from a Traditional IRA may also be used without the tax penalty, but you will owe taxes on the withdrawals.

Find Free Money

Adult students still have options with grants, scholarships and financial aid. Many scholarships and grants do not have age limits, and there are colleges that offer ones specifically for adult students. Federal financial aid programs also have no age restrictions and all students are encouraged to apply, even if you're not sure you qualify.

Partner with Your Employer

More than 60 percent of employers  offer some form of tuition assistance, with an average reimbursement of $4,000 per year. Find out if yours is one of them. Of course, you will need to continue working and pursue your education part-time, but it also means less tuition expense for you. Trending now are employers who offer student debt loan repayment assistance; while that's only about four percent of employers right now, more companies are expected to follow suit.

Get the "Framily" On Board

Though you may not be asking friends and family members to foot the bill for college, you can ask for their support. Request contributions to your college savings in lieu of birthday and holiday presents.

Teresa Stewart
Teresa Stewart

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      * 529 Plan and IRA assets are reported as student assets when applying for financial aid. Learn more .

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